Comments on: Candy.com Sets Up Shop After $3 Million Domain Name Sale

By: Curtis J Neeley Jr.

Curtis J Neeley Jr. — Thu, 06 Aug 2009 00:03:59 +0000

NameMedia sued for cybersquatted my domains.

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By: Website Which Will Make Your Earn Throughout Your Lifetime | Purchase & Register A Domain Names

Fri, 24 Jul 2009 05:29:11 +0000

[...] Candy.com Sets Up Shop After $3 Million Domain Name Sale (techcrunch.com) [...]

By: Red

Red — Fri, 24 Jul 2009 04:26:32 +0000

We do agree on one thing…Rick did quite well. Bought at $108K (think I read this somewhere) and sold for 3 million. In my opinion, these buyers are total and absolute fools!

I believe wholeheartedly that the buyer made a fatal decision and will now be enslaved to paying off Rick (if he financed), a bank (if they financed) or plain wasted 3 million (which could have been earning money in other passive investments virtually risk free). I think they need lots of luck!

Read all my past posts to see why I believe this…

By: Red

Red — Fri, 24 Jul 2009 04:22:25 +0000

We do agree on one thing…Rick did quite well. Bought at $108K (think I read this somewhere) and sold for 3 million. In my opinion, these buyers are total and absolute fools!

“I believe” wholeheartedly that the buyer made a fatal decision and will now be enslaved to paying off Rick (if he financed), a bank (if they financed) or plain wasted 3 million (which could have been earning money in other “passive” investments virtually risk free). I think they need lots of luck!

Read all my past posts to see why I believe this…

By: Red

Red — Fri, 24 Jul 2009 04:21:47 +0000

We do agree on one thing…Rick did quite well. Bought at $108K (think I read this somewhere) and sold for 3 million. In my opinion, these buyers are total and absolute fools.

Read all my past posts to see why I believe this…

By: Toycoon

Toycoon — Fri, 24 Jul 2009 03:29:30 +0000

I don’t think he financed it. That percentage was added on for 15 years in addition to the payout. He has no reason to finance it. I thought I read earlier they went to a bank and then they pay him at extra percentage on top of that for 15 years, but only they know for sure. Either way he did well and hopefully they will too. Best case would be win win for all. Maybe sell the company to Libe

By: Red

Red — Fri, 24 Jul 2009 00:01:42 +0000

Now that I think of it…”if” …I repeat that I do not know the answer…but if Rick sold the domain over 15 years I would think that interest would be charged on the money. This is normal in business sales to finance the purchase… so in essence Rick could finance this rather than a bank…again, I would like clarification, if possible, from the buyer or Rick. I am not holding my breath and it is their right not to answer…

By: Red

Red — Thu, 23 Jul 2009 18:41:26 +0000

Actually, it was 2% to the seller of the gross…ouch…that cuts into margins even more…gross not net

Disclaimer: I am not saying they got a loan – I’m just analyzing what you said…

If they went to a bank and got a loan GOD help them and their banker…

Lets be generous and just say the loan was at 5% over 15 years – used an amortization calculator

Loan Summary
$23,723.81
Monthly Principal & Interest
$4,270,285.58
Total of 180 Payments
$1,270,285.58
Total Interest Paid
Jun, 2024
Pay-off Date

Ouch…”if” they received a loan they had to secure the loan with something (an asset) too which would be put at risk…that would quite a risk.

You say this, “Also, many internet shoppers are not all about price. Selection, ease of site, and speed of delivery are just as important”

Your statement is exactly correct!

You forget to mention that this is par for the course nowadays because customers will let the whole world know if your service stinks…today it’s easier than anytime in the history of retailing to tell the world…

…so…do you not think their competitors are doing the same thing?! I say they are trying just as hard so your statement is null and void…

By: Toycoon

Toycoon — Thu, 23 Jul 2009 15:47:47 +0000

I thought I read somewhere that they went to a bank like every other business does and got a loan. Either way they were able to get the financing. Then they pay out a percent of their gross sales to the seller on top of that 3 million for a number of years. I think 15 years.

They are also driving a ton of traffic to the site in the past week, if you look at their stats. I am sure most just curious, but there will be buyers mixed in there. Whatever the end result, it will be sweat to watch.

Also, many internet shoppers are not all about price. Selection, ease of site, and speed of delivery are just as important.

By: Red

Red — Thu, 23 Jul 2009 03:03:59 +0000

Toycoon – on their own products yes the margins are good…but they are just lollipops mainly and not a major player compared to Hershey, etc. Bulk candy lets say is what – 20% of their business I would guess looking at their web site and their competition…now the problem with bulk candy is it’s a commodity item…and you say they order in large quantities…based on what? How do you know this? They are just starting – just because someone visits their site does not mean they will order – this is not 1996 – customers are no longer uninformed – it’s super easy to compare on shopping engines, Google, etc. Not to mention half of the people typing the domain name in may be looking for other stuff – kids messing around with no cash just checking the name, etc.

Now you say they spent 3 million – has Rick or these candy guys definitively stated that the 3 million was paid all at once or over say 10 years?? I do not know the answer to this and I do not think you know either – only they all know.

By: Toycoon

Toycoon — Thu, 23 Jul 2009 00:38:50 +0000

Red,
Candy margins can be very good (much more than double on bulk candies) if you order in the volumes these guys are likely are ordering in. I am sure they don’t go through a “middle man” for many of the items. Great buy in my opinion. Even higher margins on the items they manufacture themselves.

Candy.com will be easy to remember after people make a purchase. They have the best domain in their field and now they just need to execute. Based on the fact they had 3 million to buy the name I do not see this as a problem. Price is relative to the buyer. Maybe 3 million for them is like $1,000 to you.

By: Jake

Jake — Wed, 22 Jul 2009 23:35:55 +0000

Actually, Bodybuilding.com has a real business and a full site behind it (number one bodybuilding/fitness site based on traffic), and it sold like 80% for over $100m to Liberty Media, as reported by the Wall Street Journal.

By: Red

Red — Wed, 22 Jul 2009 20:24:14 +0000

Ryan – how old are you? Does your Mom & Dad allow you on this board without supervision?

Seriously, are you nuts? Do you know what the margins are for a wholesale business like this selling common products? Even with volume…

You need to get your head examined…

By: Ryan Libson

Ryan Libson — Wed, 22 Jul 2009 20:03:46 +0000

You guys have me cracking up, thinking these guys (candy.com) are looking to sell direct to the consumer exclusively for revenue.

Direct to the consumers…that part of the business is just gravy…the real money is reselling to retailers and affiliates. Once you achieve significant volume, you squeeze your suppliers to increase margins…now you are in the money printing business.

It is possible that these guys are already in this position and this domain is just icing on the cake. Any way you look at it 3 million is peanuts.

By: Blogging Tips and make money

Blogging Tips and make money — Wed, 22 Jul 2009 15:06:07 +0000

this is really great domain name but 3million just to big

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By: Will

Will — Wed, 22 Jul 2009 05:43:30 +0000

Stuff that happened in web 1.0 is immaterial. Pets.com was a story of reckless spending (among many parties), but that’s the story of the bubble in general.

I think a good argument if you really want to attack the sale would be this: if it’s making $100,000 a month, and this is a buyer’s market, then why not wait 5-6 years when you can sell candy.com for say, 6 million at the low end?

If you don’t need 3 million now, then why not wait?

By: Michelle

Michelle — Wed, 22 Jul 2009 05:38:20 +0000

I don’t get why people are focused on how much candy they have to sell – that’s so short sited. It’s about a business plan/model being executed with candy.com being memorable address for the user, and with long term results. Maybe ad model, resellers, franchise, etc…

By: Michelle

Michelle — Wed, 22 Jul 2009 05:30:26 +0000

bodybuilding.com sold 50% for 100 million? um, I don’t think so.

I think it was more like a gazillion – that’s what I heard, anyway…

By: Will

Will — Wed, 22 Jul 2009 05:28:48 +0000

The Pets.com nonsense was a hundred years ago. It failed because, like most people running bubble 1.0 companies, the people running it took big bags of cash and threw them in the fire daily.

This site has nothing in common with Pets.com, save for a 1 word domain.

By: Michelle

Michelle — Wed, 22 Jul 2009 05:26:47 +0000

Why don’t you tell us the name of your site, already?

By: Michelle

Michelle — Wed, 22 Jul 2009 05:25:45 +0000

Craigslist is design simplified. Incredibly usable. Putting it in a category with MySpace is criminal

By: Michelle

Michelle — Wed, 22 Jul 2009 05:23:43 +0000

haha, that’s fucked up.

By: Will

Will — Wed, 22 Jul 2009 05:21:52 +0000

Exactly, this is the equivalent of buying a 30 year mortgage on a moderately priced property. With a thirty window to sell it, you have very little chance of losing money. Worst case scenario, you’ll sell it for what you paid for and break even.

This was a $3 million purchase with almost no risk whatsoever.