Tom Nardone is President of PriveCo – The World’s Most Private Company. He’s a huge believer in generic domains. How much so? He paid a cool $1 Million dollars for Vibrators.com and claims “I am not a rich dude. ” Also, in 1999 he paid $64k for Bachelorette.com and have turned it into the world’s largest store for bachelorette party supplies. He is only in the business of selling private items. Tom gives some perspective on generic names, online business and what works.
Mike: Tom, you have some awesome generic domain names. Can you tell be a little bit about yourself before we get into the details?
Tom: Sure, My name is Tom Nardone and I’m the founder of a company called PriveCo. We are in the business of selling items that are embarrassing to buy in person. We sell them online and ship them to customers in the utmost privacy. Then, we hold the customer’s information in the strictest confidence. We’ve been in business since 1998 and have served over 600,000 customers.
Mike: In our first email contact, you told me that you paid a million bucks for Vibrators.com and that your not a rich dude. When did you buy the domain and how did you manage to raise the money?
Tom: We had run the website Vibrators.com since 2002 for the gentleman that owned the name. It was a great site, but our agreement with him took a great deal of the revenue away from the business. We grew the business for a while and then in 2008 we finally were able to buy him out. We paid 200k dollars as a down payment and the rest he financed for us at 8%.
Mike: In that first email contact, you also mentioned that in 1999 you paid $64k for Bachelorette.com and have turned it into the world’s largest store for bachelorette party supplies. Is this how you got started?
Tom: Actually, we started with an online drugstore called ShopInPrivate.com which is still one of our largest websites. The bachelorette party business was an off-shoot of ShopInPrivate.com and has become a great business for us. Professional women want to have fun items for a bachelorette party, but they don’t want to go to an adult store to buy them. It is the perfect online business.
Mike: How is the business of “private items?” Are you doing well? Are you looking to expand into other types of products?
Tom: Business is great! We just made the Inc. 5000 list of America’s fastest growing companies for the fourth straight year.
Mike: Do you do any marketing of these names or do you leverage organic search and type-in traffic exclusively?
Tom: The websites do have a good amount of traffic, but that traffic alone is not enough to make the business work. We definitely market the names. Our company spends about 15% of our revenue on marketing.
Mike: Are you willing to share your traffic volume? Do you have any idea of what percentage of the volume comes from type-in traffic?
Tom: Vibrators.com gets about 3,000 visitors a day. Before we started working with the site, it received about 400 visitors a day.
Mike: Do you own any other domain names?
Tom: We really only buy names for specific projects. I would love to have had the forethought to buy some great ones early-on, but I didn’t. I do feel that generic names are still available at a decent price. A good deal can be made if the buyer has cash and the seller has sanity.
Mike: You’ve paid some serious money for domain names. How do you decide what a fair price for a domain name is?
Tom: For each purchase, I draft a business plan and decide what the value of the name would be based upon that plan. Of course this model only works for really premium domains, because those are the only ones that I would ever predict would make money. If you own ToeNails.com I’m not sure I can help you. If you own TVs.com, we can talk.
Mike: Any advice for those people looking to acquire premium domains like yours and develop a business around it?
Tom: Generic domain names can be very valuable and they are an important piece of the puzzle, but they are only one piece. Make sure the rest of the company is ready to deliver on the promise that your domain name is going to make.