Profit Sharing: How Much? How Soon?

We don’t share our clients’ confidential numbers, but we’re willing to share our development history and sales numbers from our proprietary site www.GunSafes.com in order to give you a feel for what you could experience with our Domain Profit Sharing (“DPS”) system. Normally, numbers like these would be held highly confidential, but our experience has been so positive that we want to share some of our results. This is just one site of many.

Development History

ClickShops acquired www.GunSafes.com in May of 2007 after conducting an intense round of market research. Our projections showed that we could make significant money if the market for gun safes could be pried open, since nobody was offering a wide selection of gun safes (our competition is still weak), and since we knew our in-house sales staff and customer service representatives were the best in the industry.

While the domain name had already been registered for several years, unfortunately, it had been used for years as an ad-site and had consequently been penalized by Google. So getting the site “un-banned” was our first challenge. Within a couple months, we were able to accomplish that task.

At the same time, we were optimizing the site and marketing it for search engine purposes. We started lining up manufacturers who would sell their gun safes through the site. At first, it was a very difficult proposition, since manufacturers are constantly deluged with websites asking to sell their products. In fact, many manufacturers simply refused to sell through us, especially since we had no brick and mortar retail store.

Within several months, however, we were showing up on page one in Google for our main key terms “gun safes” and “gun safe.” Consequently, many of the manufacturers who had previously refused to sell through us changed their minds, and sales started rolling in.

Over time, we have marketed the site for many more terms than just our main key terms, and these marketing efforts have paid off. Now you can find www.GunSafes.com on page one in Google for hundreds of related terms (some bigger and some smaller) like Sentry gun safes, Cannon gun safes, Winchester gun safes, Liberty gun safes, and Browning gun safes.

Traffic and Sales

We now service a large share of the gun safes market in the United States, and we are growing every day. Of the total number of people who look in the search engines for terms related to the gun safes we sell, we estimate that we capture roughly half.

Having captured that enormous amount of traffic, we now have to convert those visitors into sales. Our conversion rate is approximately one percent. This may not sound like a lot, compared to some sites, but remember that selling gun safes is not like selling t-shirts or books. Most safes are custom-made, and each safe must be individually crated and shipped with a heavy-duty freight company, since many of them weigh well over a thousand pounds. In addition, many safes cost thousands of dollars. So converting one percent of our visitors into actual sales is an impressive feat!

In the three months ending January of 2010, we averaged monthly sales of $303,000. If we were paying a DPS client for sales on this site, the monthly checks would have averaged $9,090. This is less than three years after acquiring the domain name.

If you own a good keyterm.com domain name, this is the kind of experience you can have. ClickShops will handle the development, marketing, and provisioning of the site, and will perform all the sales and customer service functions, and you can simply sit back and receive 3% of the total sales. (Remember, if you are ever offered a higher percentage of the “profit” or “net sales,” that the books showing those numbers can always be “cooked.”)

Summary

In short, our experience makes us supremely confident that our DPS clients will make money. In fact, in many cases we are willing to guarantee an acceptable level of returns to our clients. Generally, we look at the client’s historical income from the domain name and then offer to guarantee a certain multiplier of that amount over time. The rate is negotiated for each URL.

We also often negotiate an option to purchase the URL’s for an amount acceptable to the URL owner and ClickShops.

If you have a broker, ClickShops is willing to write checks (a percentage of the 3%) in the appropriate amount to your broker. The broker will need to make an arrangement with you, if he or she would be entitled to a percentage of the sales price, since there is no “sale,” but we can also assist in that arrangement.

Our DPS clients are proud to join the ClickShops family of websites for many reasons:

1. Over time, domain profit sharing is much more profitable than domain parking.
2. The features of the websites we build (security features, Better Business Bureau, convenient shopping carts, etc.) make our clients proud to be involved with a first-class online retailer.
3. As a member of the ClickShops family, DPS URL’s enjoy cross-selling between ClickShops sites, which results in additional sales.
4. Domainers continue to own the domain name, and they enjoy telling their friends they own a site that is fully developed.