Why The Coffee.Club Deal is Good for Both Parties | DomainInvesting.com

Why The Coffee.Club Deal is Good for Both Parties

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I’ve known Bill McClure for a few years, having met him at several domain conferences, and I admire his business successes. I’ve written about him before, from buying Coffee.org for $100,000 and building a big business on it, to buying Bouquet.com at auction. There has been quite a bit of discussion about the Coffee.Club deal, and I think the deal is good for both parties.

What this deal boils down to is something that all domain investors deal with on a daily basis. The .Club registry had a domain name asset in Coffee.Club that it valued greatly. Bill McClure and his team wanted to own this asset, and they struck a deal to make it happen. Some people probably think $100k is way too much, but the deal seems to be struck in a manner that will make it easier to achieve an ROI more quickly.

I asked Bill about why he chose Coffee.Club rather than any other new gTLD extensions, and he made it clear that this was his top choice. “I believe Coffee.Club has a better chance of success than any other gtld,” he told me.

I think this deal is good for Bill McClure and his family because they were able to secure a domain name that works as a brand for their new business. Bill told me that the plans are for this to be a subscription coffee service, and the goal is to launch this coming Cyber Monday. Yes, this probably could have been done on Coffee.org, but they are building a sister brand on a domain name that makes sense for it. They will also be able to pay off this purchase over time, so there is not a pressure to make money immediately.

Once this new business is launched, I presume they are going to receive publicity from the .Club registry, which will no doubt be excited to tout the newest .Club website. In my opinion, the .Club team has done a good job of marketing and PR, and they will likely give a boost to Coffee.Club once it is launched.

The deal is also good for the .Club registry. Firstly, they can highlight a $100,000 deal for one of their domain names, even though the money is not all up front. They will also be able to share an end user case study once the Coffee.Club brand is launched. Additionally, I assume Bill McClure will market the new Coffee.Club website to his Coffee.org customers, and having more people become aware of the .Club extension is good for them. Finally, they will be earning revenue off of a domain name that would otherwise be unused or possibly parked. This is a longer term play, but I think that is the case for the new gTLDs.

Whether Ron Jackson considers this a done deal or not at this point due to the payment plan does not really matter as far as I am concerned. Perhaps the deal was on the expensive side in terms of today’s dollars, but there are plenty of times an end user needed to pay more for a coveted domain name than others may think it is worth… just look at the $100,000 Coffee.org sale for an example.

When all is said and done, I think this will be a good deal for both parties.


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (5)

    Jason Franklin

    I believe this is a fantastic deal for Bill McClure and the .club registry. I definitely see great potential for Coffee.club. Congratulations to both parties on this awesome .club deal.

    November 6th, 2014 at 11:01 am

    JZ

    He would of been better off buying coffeeclub.com. Probably would of got it for less and not have to worry about traffic leaks and the struggle of consumers recognizing new gtlds. personally i wonder if there is more to it behind closed doors.

    November 6th, 2014 at 12:19 pm

    Jeff

    Good luck! He’s going pull this off!

    Now this is not a domain sale. It’s a “purchase agreement for 100k over 10 years”

    If Ron counts this as a sale it’s not right. Until it’s paid off its not a sale.

    Also I don’t know why some of the popular faces in the industry is referencing this as a sale.

    Go get them and prove the haters wrong!

    November 6th, 2014 at 12:22 pm

    Ron

    As we all know the domain is important, but not essential, Twitter, Uber, Google, Lyft etc… There are many people out there with subscription based models of coffee, have even seen one on shark tank over a year ago.

    If he had started on Coffo.com or something it does not make a difference, it will be the pricing, and product along with word of mouth that move this company forward. Yes, they will lose traffic to the .com, and I am sure they would have tried to secure the .com, but sometimes owners can be in love with their names, or not interested in selling.

    Either way Coffee.Guru, Coffee.Market, Coffee.Tribe, Coffee.Box, Coffee.Month, Coffee.Direct, Coffee.Team, Coffee.Company, Coffee.Global, Coffee.Expert etc…

    Not sure why everyone has their panties in a bunch, anyone with the end user reach as this buyer can use most of the above domains, and the same elbow grease to get the same effect…

    November 6th, 2014 at 12:34 pm

    Quantum Domainer

    When I first learned about this deal, I was shocked. My experience in this industry led me to two assumptions: 1) This is just a marketing ploy by a desperate gTLD or 2) There is more behind the scenes. Sure enough, the most recent Domain Sherpa show (including Bill McClure himself) demystified this sale and brought things back down to reality.

    Two important points not mentioned above:
    1. The $100K is being paid in $10K annual installments — interest free.
    2. .club is providing massive marketing support for this venture, including the promise to get the “first 1,000 customers” — a lofty promise to any startup.

    FWIW – His interview genuinely left me assuming that he wouldn’t have sought this name out if it wasn’t for the third-party marketing support promised by .club. Watch the video and see for yourself.

    Nevertheless, I applaud .club for their relentless and innovative efforts and wish them all the best of luck.

    November 6th, 2014 at 6:10 pm

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