How did a four-word .COM sell for $100,000?

I have to say I was pretty impressed with Uniregistry’s latest list of sales, with close to $30M in domain sales already this year it’s fair to say Uniregistry Market is on fire. A lot of the sales made perfect sense, one-word .COMs like Kombucha.com or Squeeze.com selling for six-figures is pretty darn normal.

But there was one sale that I can’t get out of my head and I thought was important to highlight, a four word .COM, UsedCarsForSale.com selling for an even $100,000. Yes, that’s right, a four word, fifteen character domain name sold for six-figures and I think that’s kinda awesome.

There’s already a site on the domain so you can see what the buyer did with the name:

used-cars-for-sale

Yes, not surprisingly it’s a site that helps people find used cars online. It doesn’t look like the site is fully operational yet since clicking on some of the popular cars leads to an error page, but I can see where they’re going with this. I can’t say I’m blown away by the design but I thought, hey – let’s do the math and see why this sale might make sense.

Suppose the average used car on the site costs $20,000 (probably a low bound estimate), and let’s say they make 5% on each sale, this would be $1,000 per car. Okay but let’s say 5% is too high, instead let’s say they take a 2.5% commission, well that would be $500 per car.

With these estimates, the owner would need to sell 200 cars to break even after that, it’s all gravy as they say. So even though this might seem like a ridiculously high price to pay for a four word .COM, given the potential of a site in this space it might not be so crazy after all.

All that being said, I hope the owners are planning on spending a few extra bucks on a better site because this one looks, well, pretty junky, not quite the image I want if I’m trying to get the feeling that I’m buying a solid used car. My guess is that the owner also knows that getting on the first page of Google is going to be next-to-impossible given that ads and local searches appear above and below the fold, followed by some pretty monster companies like Enterprise.

used-cars-for-sale-google

So here’s what I’m thinking. The person who bought this domain likely has a nice budget for a new site (please tell me this one is just a placeholder!) and also knows that the type-in traffic alone is worth quite a bit since they’d likely pay a few bucks a click to advertise on Google. They also know that making a few hundred dollars or more for each car they sell means a real chance to pay this bad boy back and start enjoying the profits.

Of course, I don’t know anything about the used car market so I could be totally wrong and maybe the buyer was just crazy…but it feels like there should be some logic here. What do you think? Comment and let your voice be heard!

Morgan Linton

Morgan Linton