The Nut Case: Domain Investment Helps Yield $35 Million in Revenue
What’s the next move for a growing company that is doing a lot of things right? Making sure that their online presence is secured with the best brandable domain in its market.
Moderately successful businesses that want to break free of the limits of brick and mortar shops and become substantial players in the world of online retailers have to create brands and market them. The Newark Nut Company began in 1929 as a brick and mortar store and was bringing in $1.25 million in 2002 with sales split between wholesale and retail. Around this time, the company began to think more about its online presence and launched the nutsonline.com website. This would prove to be an excellent growth move as sales began to shift from to retail store to mainly online. The Newark Nut Company eventually closed the retail store and earned $5 million in revenue in 2006. This number continued to increase, reaching almost $20 million in 2011.
Sounds great right? It was, but the company still had a problem with customers remembering the domain name nutsonline.com. The issue was further highlighted after the Newark Nut Company supplied Jordan almonds to the nationally broadcast ‘Rachael Ray Show’ and at the end of the show the host mistakenly thanked “nuts.com.” Nuts.com was already owned and not for sale, but the company tried to buy the domain name anyway because customers frequently thought this was the website. After a rejected initial offer of $200,000, the Newark Nut Company finally met the domain owner’s price of $700,000 and would have been happy if the money was recouped in 10 years, according to one of the principal owners, Jeff Braverman.
Luckily, the Newark Nut Company did not have to wait 10 years to recoup its investment on the nuts.com domain name. After some challenges with the redirected links and traffic issues, it reportedly paid for itself in about 6 months. It turned out that the new domain name and brand change were the right investments to make, given the continual monthly increase in direct traffic from people finding the company by simply typing the domain into their browser’s address bar. The first year of the change to the new domain saw revenue from that direct traffic grow by more than 65%, which was significant for a company that had historically been a seasonal business. The company later changed its name to match the domain and earned more than $35 million last year.
Businesses with awkward or hard to remember domain names can be held back from reaching greater revenue potential through online sales over the Internet. The original Newark Nut Company was not performing badly in its marketplace, but by building an online website and fixing its domain name, the company grew more in a couple of years than it did in its first 70 years of existence as a retail store. Long-term, the four-letter domain is easy to remember and even easier to optimize for search engines. Customers need clarity and businesses are better off in the long run acquiring an unmistakable domain for a better brand as soon as it is feasibly possible.
Businesses that change awkward domain names to more brandable ones also benefit from a defensive standpoint. The investment saves money and keeps control of the domain out of the hands of competitors who could use it to siphon away sales. It also keeps the domain out of the hands of customers who might have complaints (real or imaginary) and want to publish misleading information under the associated name. Businesses usually get better investment returns by ensuring existing and new customers can find their company online and brandable domain name assets are a good way to facilitate this. Still unsure? Brokers can be good resources to consult if your business needs a little history of brands changing their names online and valuation.
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