Sextoy.com

Dave Levine is the owner of SexToy.com, not to be confused with the plural version which you might recall from a previous interview.  In 1994, Dave took a stab at making money on the Internet.  He quickly realized he needed to pick one product niche and focus.  Shortly after that he was one of the first to offer wholesale and dropship for adult products on the internet.   Although the domain “SEXTOY.com“ gets most of the media attention, Sextoy Dave’s company makes over 90% of its money by managing the back-end distribution for other adult product companies.

Mike:  How long have you owned sextoy.com and how did you acquire it?  Can you share what you paid for it?

Dave:  In 1995 I could have bought almost any domain from Internic for $70 (Internic later became Network Solutions which later became Verisign).
Unfortunately, like most people, I didn’t realize the potential of that opportunity. I remember sitting there thinking . . . “should I buy sextoy.com or sextoys.com?”  I just bought sextoy.com because I didn’t want to risk another $70 on my crazy internet ideas.

Mike:  What type of traffic volume does the name receive?  Do you have an idea how much of that is type-in traffic?

Dave:  We get about 250K visitors a month to that domain.  75% is from search engines.  15% is from type in traffic, and 10% is from links.

Mike:  How do you promote the site?  Do you leverage SEO, PPC, or other online and offline strategies?

Dave:  From our search engine traffic 30% is PPC.  The rest comes from our SEO strategies.  SEO is the most profitable.  PPC is break even at best.

We also have an affiliate program (MyFreeWebsite.com).  The affiliate program is effectively another marketing strategy. And sextoy.com is technically just another affiliate.
SextoyFun.com gets 1.2 Million visitors a month (that includes the 250K from sextoy.com).

Mike:  You have the number one position in Google for “sex toy” (wothout quotes).  Was that difficult to achieve?  Are you aware of other key phrases where you have favorable search results?

Dave:  “sex toys” is the biggest word for my market and being in the top 10 for that word is key.  We are currently bouncing around #3-6.  otherwise, “sextoy”, “sextoys”, and “sex toy” are important and we are usually #1 for those.  Otherwise, we do well with a few categories like “anal toys”, “strap ons”, “sex furniture”, and more, and we have many more we are working on.
We also have some affiliates who do well in google as well.

Mike:  I interviewed the plural owner of the same domain name a while back.  Do you think either of you benefits by catching traffic intended for the other?

Dave:  Now that people are used to domains, its not as bad as it used to be.  But in the past, I used to tell people “go to sextoy.com” and they would say “Oh, ok sextoyS.com”.  Also, sextoys.com used to not do marketing so they benefited from my marketing.  But now they do their own marketing and people seem to listen better to domains so the effect is not as bad. But yes, I wish i had bought it for $70!

Mike:  Would you consider selling the name if an offer came in?  Have any offers been made?

Dave:  Everyone has their price, but since sextoy.com is not just a domain and is associated with my whole business, i probably would have to sell it and the business at the same time to get the most value.  or sell the whole business in parts at once
I haven’t had many serious offers.

Mike:  Have you run into any challenges running an adult website?  Are there limitations that you’ve faced?

Dave:  ecommerce on the internet is extremely challenging.  Good profitable ideas are quickly copied.  algorithm changes search engines and competitors popping out of no where have forced us to change direction many times. Often I have foreseen problems before hand and was on to the next best thing before the competitors were able to copy our last best idea.
Over 15 years, many companies have come and gone in our space while we have remained.  Lately for the first time maybe ever, we feel like there is declining competition.  So maybe we have a few years to make some good $$ before the next surprise attack surfaces!

Working in the adult industry can be challenging as well because some companies treat adult companies as if we are criminals.  Whenever i look for a a company to do services for us such as hosting, graphics, or even banking, I have to start the conversation with asking if they have any moral objections to working with an adult company.  And when we hire, that is also always the first question asked.  Sometimes when I ask a company if they mind, when they do mind, they get angry and hang up on me.

Even when working with companies especially banks, it is not uncommon for them to suddenly decide they don’t like adult.   About 5 years ago, Paypal decided they didn’t want adult.  We had never had one problem or charge-back with them, but they suddenly closed our account and told us we could withdraw funds in six months.  After six months, they told me they needed 2 more months to review.  I eventually got my money back.

We had a credit card processor for 8 years with whom we were a great customer with charge-backs always below 1%.  then they had a change in management and one day I was complaining because a close batch error on their end that happened several times had cost me a few thousand dollars.  They said, “actually we are not doing adult anymore.  You have 30 days to find another processor.”  Needless to say, I never got my few thousand dollars in wrongly taken fees.

Living in Hollywood, I am a hero for selling sex toys.  But when I lived in Boston or when I visit many other cities, sometimes, when I tell people what I do, they get angry or turn their back on me.  And sometimes am treated like a carnival act.  “hey, this guy sells sex toys!  OMG,” then then bring friends over and laugh hysterically.  They ask me what the best seller is and I say a “vibrator” and they laugh for like 30 minutes.  I don’t mind it, but prefer Hollywood, where they say “cool” and then move on. 🙂

Mike:  Anything else you’d like to add?

Dave:  Most of what we really do is provide solutions for others to sell adult products on the internet.  wholesale/dropship services from sextoyclub.com and a customizable affiliate program at Myfreewebsite.com is about 75% of our business.  sextoy.com recently has grown significantly to 25% of our business, but most people think 100% of my business is sextoy.com type in traffic which requires no work.  Unfortunately, it hasn’t been that easy.

However, life is good.  I set this business up so that I can work from home.  Not only that, but all of our helpers work from their own home or office as well.

Finally we carry over 100K items from almost 100 different warehouses.  No one has a bigger selection and lately we have focused making it easier for people to find those items or to resell them and make money in this industry.