Frager Factor

Monday, December 19, 2011

The Guest Post Mike Berkens Never Knew He Made

Today we are reposting this Mike Berken's gem in the hopes of raising awareness and funds in memory of their beloved long-term cancer-surviving (until recently passed), companion, Bandit.

Bandit was a part of the industry, at every show. He was a fixture at Mizner park often eating bread from the best outdoor table at the best hard to get a reservation at spot, in sold-out snowbird season. He was a character. Bandit was a beacon of possibility in fighting canine cancer. I and many others will miss him and we can only imagine how Mike and Judi are felling. Let's send them our love and support and a donation to help this cause, helping other terminally-challenged pups get the help they can and live a long life in peace and friendship. Click here to help


Mike Berkens: "A Lot of People Have Forgotten About Mike Mann. But I Haven't."

Today's guest poster is Michael Berkens. Mike is President of Worldwide Media, Inc., which owns thousands of domains and has a retail site selling domains, MostWantedDomains.com. Mike is a serial entrepreneur, a non-practicing tax attorney, and an accomplished domainer.

Not only does Mike own and monetize thousands of domains, he has developed several of the Web's most profitable domains using business models focused on partnerships and existing distribution programs. Essentially, he's mastered the science of selling and profiting on product he never has to see or touch.


"TheLobby.com is a name that we sold into the five figures that we paid 140 bucks for"

Mike Writes: "Maybe because I come from the legal background and as a lawyer, I know a lot of people watch a show like "Boston Legal" and see these lawyers arguing and yelling at each other in a courtroom and calling each other names, and then after the case is over they'll go out and have a beer or have dinner or something. People have a hard time with that. I think that's the way it really works.

We are competitors, but we also are in a community and we have a vested interest in pointing each other into the right direction. There are some people that are really out there doing that for other domainers. Like Elliot Silver. He's one of those guys. A young guy, a very impressive guy. He left a big New York firm, AIG, legendary AIG, well before the fallout, and went into domaining full time and he's done development. He's done domaining. He has his own blog over at ElliotsBlog.com. A really good guy, gives out good, sound advice, and he's gotten counseled by some other guys. I think that's how it should work and needs to work. At some point, yeah, we are competitors, but at other points, we need to work together.

I think there's, like in any other profession or occupation or career, I think there's people who have a natural affinity for what they do and then there's others who have tried to learn it. I'm not saying that you can't be extremely successful being somebody who's doing it by learning or education, but I think to be one of the great guys, like a Frank Schilling or a Michael Mann, who used to own BuyDomains, who you haven't mentioned and a lot of people have forgot about Michael, but I haven't because I used to bang heads with him in the auctions a lot of times.

Mike's a very smart guy. Guys like that can go through a list of 20,000 domains and find 50 good domains that are saleable, valuable, out of the list. I don't think there's an unlimited amount of people that can do that. I'm a football fan and if I can equate it to quarterbacks, you got Tom Brady, who has a lot of natural ability and then you've got other quarterbacks who've been around for a long time and who've done very well for themselves, make a lot of money, win games, but they're not Tom Brady. They're, I don't know, Rex Grossman. Nothing against Rex, I'm a Gator fan, but he's not Tom Brady. I think there's a natural, going back to my point, I think some people have a natural affinity for this, and I think they will naturally be somewhat more successful than people who don't.

We look at the auctions and we do buy at them. I don't think we specifically target names because they are at auction or shy away from it. If it's a name that we like, we go for it. What we have done, and I think what we've learned to do in the years, is set our limits. Typically, we'll proxy bid what we're willing to pay for the name and just walk away rather than sit there and slug it out. I think a lot of people who've done that for a long period of time will tell you that leads to you overpaying a tremendous amount, when you sit and actually watch a NameJet auction or SnapNames auction and sit and go back and forth and before you know it, your thousand dollar limit, you're at 5,000 and you're still going.

We price the name the same way we price the name when we're looking to buy. We look at traffic, earnings of the domain. We look to see where we see it falling within Google, how valuable the domain is in our estimation, how close is it to the best domain available. Is it the second-best domain or is it the twentieth-best domain? Do we have plans to use it? What could we possibly do with it if we kept it? What's the likelihood of receiving a substantially better offer within the next few years for that domain?

Having said that, I don't have a mathematical formula I can give you. I don't have a mathematical formula I can give you. I think it goes, again, back to your gut and getting a feel for the domain business and what things should sell for.

For example TheLobby.com is a name that we sold into the five figures that we paid 140 bucks for. Again, these are names that a lot of people wouldn't pick because they didn't have traffic, didn't have revenue, and they weren't stars of the show kind of names" I think it goes, again, back to your gut and getting a feel for the domain business and what things should sell for.

How steadfast are we on our pricing? We're fairly steadfast. There's a lot of ways to sell domains and there's a lot of philosophies and I don't think any of them are wrong. There are guy out there like Rick or like Frank, who basically the word is that, "Offer me six figures or don't bother talking to me about the domain." They sell big-money domains every year and obviously do quite well. Then there's the flipside of that which is like Fabulous or BuyDomains that will sell domains for $500 or $1,000 or $2,000 but sell just a ton of them every week. They make plenty of money, too.

We take the middle approach. We don't really want to sell a huge quantity of domains, because we still believe in the space and we still acquire more than we sell. Our philosophy has always been, since we started, to sell enough names to cover all our registration fees for the year and all the PPC income then there becomes free. That's what we attempt to do.

We don't want to sell off a chunk of our portfolio.

I'm not strong on country codes. I believe in going with what you know. I think if you look at some real successful guys, look at Rob Grant you had on last time. He's a real estate broker, so it's not a shock to see that he has the best real estate portfolio in the world. He did what he knew.

Primarily. He has a lot of other names now, too. When I started, I came from the legal side. I have a lot of really good lawyer names and legal profession names.

If you're a car mechanic, you have a whole different view on things, and you go out and find things that deal with what you know to start with."

'We're still selling names, mostly to end users. We don't really sell anything for under, realistically, 5 grand. Very, very rarely do we sell something under that. We've sold, including two pending sales that I have at Escrow, I was just looking back over, about $230,000 in domains this year in this horrible economy ~~ (March 2009)


The company known as Discount Mugs writes in its about us section, "We take great pride in our work and our facilities. Headquartered in Miami, Florida, Discount Mugs™ has been in existence since 1993 (starting with only six employees). Today, we have over 425 loyal, dedicated, and knowledgeable employees that help facilitate every unique customized order that flows through our company. . There is 350,000 square feet of warehouse space and over 75,000 square feet of production space to hold our entire inventory and allow us to work with ample room to produce your orders."

They forgot to mention that with drop in their bucket investment of $50,000 to acquireDiscountBags.com from "second-best name broker" Worldwide Media, they were able to expand their reach and in the next two years double what they accomplished in the past 8 years. You're welcome, Mike Berkens.


Some other sales closed by Mike Berkens in the past few months:

MakeupyourMind.com $17,500-- now an interactive make up demonstration from NARSCosmetics

MyRecovery.com $40,000- Sponsored by The Retreat, inside myRecovery you will find comprehensive on-line programs, services, and solutions to alcoholism and drug dependency based on the spiritual principals of the Twelve Steps of Alcoholics Anonymous.


DailyHookup.com $20,000- From the New York Times, "To remedy that, he and his friend JohnStubbs have started the Daily Hookup, a deal site intended for gay men that is to appear on Monday. The site, which was financed by family and friends, will offer national deals and local ones in markets" To gain trust and to be heard amid all the Internet noise, the Daily Hookup is working with five gay media sites — gay.com; dlist.com, a gay social networking site; out.com; advocate.com; and washingtonblade.com — to offer deals to those sites’ visitors, too.


KillerPrice.com $7,500- Sold for such an interesting end user application, you have to see it to believe it

NewEnglandMagazine.com $6,500- became what it was destined to be

This I can tell you. But even more interesting is what I can't tell you. That is who was behind the $2500 and higher offers Mike rejected and what those domains could have become that are quite possibly blossoming on alternate choices. Just ASK GRANDMA.

Mike continues: "Domainers could be broken up into groups and the different groups are far different, have different needs and requirements and have different abilities to acquire domains. Some domainers need to sell a domain to make their rent payment or their mortgage payment. Other domainers, it doesn't change their life if they sell a domain for a million dollars or not. You got another guy who may need $5,000 next month to pay his mortgage or 1,000 bucks to pay his rent. He needs to sell. It's hard to generalize about all domainers because they're just so varied in needs and assets

From my perspective, we've always looked long term. I've never done any, what you would call, domain flipping, which is acquire a domain with an eye to flip it off to somebody else and make a small profit within the next 30, 60 days. Never done it, so I really can't opine about that situation. I know a lot of people do it and they're successful doing it. I think it's going to be harder with this economy to do that. So if that's something somebody's used to doing, I think they're going to have a harder time of it.

I think all of us who have been doing domaining would agree. In real estate, they have the term that's used, the highest and best use. I think we all know that parking is the lowest and worst-use, but it's easy and it's scalable to thousands of domains or tens of thousands or hundreds of thousands of domains. There's no other solution out there yet that's scalable to thousands or ten thousands, etc., of domains.

I think you need to have a plan. I think you need to have an acquisition plan and you need to have a sales plan. It doesn't have to be a formal written document, but I think you have to have in your mind, when you start into this business, like any other, where you want to go, what's your objective, what do you hope to achieve, and how are you going to achieve it rather than just registering domains left and right or going into auctions and buying stuff you see without any rhyme or reason.

There's still a lot of money flowing through the domain channel that goes unnoticed. The $5 million on Toys certainly gets noticed. We were talking a little bit before the show, if you go to NameJet on any given day, let's say around a quarter to 11 p.m. It closes at 11 p.m. East Coast time. If you go around 10:45, you'll see somewhere between 175 to 200 domains backordered at $69, let's just call it $70. Every single day, 365 days a year. I know maybe 10 of those names have pretty good traffic. Maybe 10 of those names really have some meaning to them, but I would argue that at least 150 of those names are pure crap. If you take 150 names and times it by 70 bucks, you're looking at 10,000 bucks a day, 3 million bucks a month. That's a lot of money that gets thrown away I think in the domain channel."

Photo: Mike & Judi Berkens courtesy of DNJournal.com




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About The Author: Owen Frager is an Internet marketing expert ready to help take your company to the next level.

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