Jonathan Volk, the founder of CarCovers.com, recently sold a majority interest in his company at a valuation in the 8 figure range.
This week, Jonathan took to Twitter to explain how he took an enormous risk in 2012 to buy a domain name for $400,000 that ultimately helped to transform his business. Although the entrepreneur wouldn’t disclose the domain name, this press release all but confirms that CarCovers.com was the domain name that was acquired for $400,000.
Once Volk’s company started to see low seven-figures in revenue, he made a series of offers between $200,000 and $350,000 for the domain in question.
After ultimately acquiring his domain name for $400,000, Volk confessed that “it wasn’t an immediately good investment.”
Ultimately though, 8 years after the purchase, Volk revealed that the business had increased revenues to the 8 figure range. According to a tweet, the new domain helped in a number of ways including:
- Better brand credibility
- Better pricing from suppliers
- SEO benefits
Here is the full Twitter thread from Volk (read the original here). Although he doesn’t mention the specific domain name, it’s almost certainly CarCovers.com.
I bet almost everything I had in 2012 on a domain purchase: $400,000! It was the biggest risk I had ever taken & was in the top 10 most expensive domains purchased in 2012 (but we didnt publish price).
Here is how that bet lead to an eventual 8 figure partial exit
BEFORE DOMAIN: 2007-2010: I was an affiliate marketer making a good living but the problem is your affiliate campaigns can go to zero overnight.
Marriage and buying a home motivated me to get away from such instability.
ECOM: I found an OK, but not great domain name for $1k and found a niche. Key ecom factors: High gross margin items (66% GM at least), so I can pay for marketing, easy to ship, poor marketing done by competitors, good sized TAM, somewhat retail proof.
The best domain in the niche was for sale for a cool $999k. I have written prayers in my prayer journal circling that domain going back to 2010. After reading the book “The circle maker” by @MarkBatterson, that became my big audacious harry goal / prayer.
The site started gaining some traction in 2010-2011 as I optimized all aspects that are important for ecommerce:
better margins by buying direct vs dropship, advertising efficiencies, volume discounts, product improvements, adding phone and better service, etc.
^ Business is a game of continual improvements and innovating.
By 2012, I had started to see low 7 figures in revenue. This built up some cash in the bank but far from “making it”. The first few years, I didn’t take out almost any cash beyond what I absolutely needed. Reinvesting is so important. For bootstrappers, it’s the only way.
I offered $200k-$350k. Offer rejected, rejected, rejected. Towards Q4 of 2012, I felt like we might be able to make a deal. I fasted and prayed for 7 days. Then emailed the seller, full of faith. He still declined. My spiritual mentor @jonjon4jc helped me a lot in this process
I flew out to Vegas to meet up with an internet entrepreneur I looked up to @shoemoney. I doubt he remembers the interaction because it was super brief, I remember him basically saying, “Anyone he knows that’s successful has had to take big calculated risks in order to get there”
Finally, negotiated down to $400k. Went to the bank and wired most of the money I had available. It wasn’t an immediately good investment. It took a lot to build it to the 8 figure brand it became.
Was it worth it? Predomain revenues were a few million. 8 years after acquisition well into the 8 figures. The domain alone wasn’t what I contribute to it’s success. However, it helped a LOT in accelerating it.
Here is how it did help:
– Better brand/credibility
– Suppliers all gave me attention. Got better pricing
– Huge SEO benefits. The domain paid for itself just w SEO revenues over time.
– Likely helped the PE firm I partnered with see the value in the brand at a glance.
The other factors that led to it growing were getting a mentor/peer group. Whatever business you’re in, a peer group and/or mentor will accelerate your growth, almost guaranteed. I joined @ezrafirestone Blue ribbon ecom group. My revenue has grown every year because of it! Gold
Then in Dec 2020, partnered with a PE firm (partial exit) @ an 8 figure valuation. In the internet game, there are lots of ways to win. This was just the one that worked for me.
Take big, calculated, risks.
Invest in making your company better every day.
Learn from others. ✌️