20i Reseller Hosting

future selling direction

Discussion in '.UK Domain Name Consultations' started by cav, Nov 22, 2013.

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  1. cav United Kingdom

    cav Active Member

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    What are member's thoughts on the future situation of being approached by an end user to buy the .uk where you own both the .uk and .co.uk.

    Would you feel obliged to sell both the .uk and .co.uk together as a package or would you hold back the .co.uk in hope of selling it in the future to another end user?
     
  2. Domain Forum

    Acorn Domains Elite Member

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    articles.co.uk
     
  3. Edwin

    Edwin Well-Known Member Exclusive Member

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    Obliged? No, it's yours to do with as you please.

    However, I personally feel it would be good form to default to offering "the complete package" and only split the domains if the buyer isn't interested in buying one or the other.

    Depending on how much .uk catches end user imagination, it may actually drive an increasing number of enquiries, so it's probably worth making the effort to present the full package as being the most desirable option.

    While I don't think .uk is going to double the value of the .co.uk+.uk combo, we simply don't know. If it catches fire in a big way, it may end up becoming THE must-have extension in the UK, way ahead of both .co.uk and .com.

    Note: I'm not saying that will happen for one second - I'm just suggesting that it's not beyond the realm of possibility that it might.
     
  4. Skinner

    Skinner Well-Known Member

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    The big choice I feel needs to be made is do you have a singular price for 1 with an additional cost for the other (assuming you're holding it) or do you build the double cost into 1 price and sell as a pair ?

    I think I'll have multiple pricings say domain.ext.uk is 1,000, domain.uk is 1,000 or both for 1,600, where as before domain.ext.uk would have been 1,500, so I've added an inventory cost, I'm selling the package for the same price as the .ext.uk but the buyer gets the choice to get the .co.uk for less than it was previously list..

    I have no idea how I'll work it yet, if I am carrying the .uk cost, there HAS to be a price increase to cover the £1000s of additional renewals.
     
  5. Skinner

    Skinner Well-Known Member

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    Thinking about it again, I own many domains, where I own .co|org|me.uk and I treat them as different but offer the buy the option to buy a package as a lower combined cost.

    I'll probably start off with the above method split pricing then separate them just as me|org|co and gauge prices, gotta see what works :)
     
  6. Edwin

    Edwin Well-Known Member Exclusive Member

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    Or you could just sell "the right to register the .uk domain" alongside the .co.uk, at least for the first 5 years. That way, your additional carrying costs are zero, but you may get a better conversion rate from walk-in enquiries.

    Also, I'd suggest keeping minor extensions off the table to avoid confusing prospects into taking their eye off the prize. By that, I mean that even if you have .org.uk or .me.uk as well, I wouldn't mention them in initial negotiations - the prize is the package that pairs the UK's two key commercial extensions - .co.uk because that's what everyone is familiar with, and .uk because it's new and shorter and shiny* and exciting.

    *Firefly reference
     
    Last edited: Nov 22, 2013
  7. Edwin

    Edwin Well-Known Member Exclusive Member

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    BTW, assuming your annual sell-through rate i.e. the % of your total inventory you sell every year is quite low, you may not need to double prices in order to support the .uk extension since you won't need to spend much to replenish your inventory.

    If you can get 50% more for the pair than you could have for just the .co.uk before .uk came onto the scene, and you can lift your sell-through rate by 50% (e.g. from 1% to 1.5%) then you'll end up making 2.25x as much revenue as before the introduction of .uk and you will lift your profit significantly.

    EXAMPLE

    BEFORE .UK
    - 1,000 name .co.uk portfolio
    - Sell 1% per year = 10 domains
    - Average sale price £500
    - Annual revenue: £5,000
    - Annual renewal costs: £3,000
    - Profit: £2,000

    AFTER .UK
    - 1,000 .uk/.co.uk pairs (2,000 names total) portfolio
    - Sell 1.5% pairs per year = 15 pairs of domains
    - Average sale price £750 per pair of domains
    - Annual revenue: £11,250
    - Annual renewal costs: £6,000
    - Profit: £5,250
     
    Last edited: Nov 22, 2013
  8. Edwin

    Edwin Well-Known Member Exclusive Member

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    Just "brainstorming out loud", you could even hold off registering the .uk, but offer something like the following package as a bonus with every sale:

    - .co.uk (renewed for 10 years)
    - .uk (registered for 10 years)

    Assuming you're currently renewing at the last minute, the above would add £60 in costs to each successful sale, and the math in example 2 would look like this:

    AFTER .UK
    - 1,000 .co.uk portfolio (each of which is "entitled" to the matching .uk)
    - Sell 1.5% of the portfolio in packages like the one I described above per year = 15 pairs of names
    - Average sale price £750 per pair of domains
    - Annual revenue: £11,250
    - Annual renewal costs: £3,000
    - Registration/renewal costs for sold domains: £900
    - Total costs: £3,900
    - Profit: £7,350

    NOTE: 2x 10 years worth of reg/renewals may cost you £60 if you're a Nominet registrar, but the "perceived value" of including that could be >>£60 since the end user you're selling to is almost certainly registering via a third party registrar, so could be paying a lot more for their own registrations than the £3/year you're getting.

    At the end of 5 years, you'd have to register and renew the remaining (i.e. unsold) .uk domains that matched your existing portfolio, but there's a nice opportunity in the meantime to take full advantage of the new extension.
     
    Last edited: Nov 22, 2013
  9. foz

    foz Well-Known Member Exclusive Member

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    Buyers will want both for the next few years, pricing them separately is cobblers. If your .uk is activated then just ask more for the package.
     
  10. Skinner

    Skinner Well-Known Member

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    Depends who is buying if they will understand they NEED both.

    After the kicks in the face I recieved explaining .uk (months ago) to end users, they have exactly ZERO interest in owning additional names, and if you try and push 2 on them, they will decide they only want 1 so they want to pay less.

    Based on the last 6 months, I 100% absolutely without a single doubt in my mind, WILL get people say "So you want £2,000 for foz.uk and foz.co.uk but I only want foz.co.uk so can I have that for £1,000".

    Domainers and people in the know will want both, but average business person, won't understand why, and won't want to pay for 2 when they think they should pay less for 1.
     
  11. bulkcorn

    bulkcorn Active Member

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    I'd explain it would be in their best interests to have the .co.uk alongside the .uk and offer them a discount if they want it; or sell them .uk first and then later offer them the .co.uk at a price they can't resist.
     
  12. websaway United Kingdom

    websaway Well-Known Member

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    Ah yes but the question will be. Will the seller split them ?
     
  13. Edwin

    Edwin Well-Known Member Exclusive Member

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    I think that will depend on their financial circumstances and the strength of their portfolio. If the .uk launch brings a significant uptick in enquiries they may have the luxury of standing firm and insisting on selling both, or neither.
     
  14. Murray

    Murray Well-Known Member

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    Say you owned a geo like london.co.uk

    I wouldn't be put off of developing London.co.uk just because someone else had london.uk

    So geos and informational domains I could see splitting and both holding value individually.
     
  15. websaway United Kingdom

    websaway Well-Known Member

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    It may well be that If you sell one, the other may well only have future value to that buyer.
     
  16. SecNam

    SecNam Moderator Staff Member

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    has there been any say on if you can/can not sell sub domains ie: florists.london.uk
     
  17. Edwin

    Edwin Well-Known Member Exclusive Member

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    No restrictions have been proposed on sub domains.
     
  18. SecNam

    SecNam Moderator Staff Member

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    cheers.
     
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