Karn Saroya, Co-founder & CEO at Cover, explained how his company decided to purchase the domain name cover.com for $825,000.
The blog post he made had the title “You should never spend $825K on a domain — but here’s why I’m glad I did”.
According to DomainTools.com the domain name was bought from DIGIMEDIA.COM sometime in the 2nd half of 2017.
BTW 3 words he said made me laugh for reasons most domain investors will understand: “insurance domain brokers”.
Here are a few quotes from the post:
“Spending that money to purchase the domain Cover.com wasn’t just the biggest single purchase we’ve made as a company, but it was among the highest figures paid for a domain that year.
But this wasn’t an impulsive decision. It was very calculated and thought-through over the course of the prior couple of months.”
“Sure, we would save money buying the dotcom domain for an alternative brand, but we also saw the long-term value of owning one of the most coveted domains in insurance. This struck us as the bigger opportunity.”
“To get a sense of the price, I solicited a bunch of insurance domain brokers with mixed results. Some were actually quite professional, but others were super shady.”
“Owning Cover.com has lent an extra level of legitimacy to the brand and this, in turn, has translated into sales.”
“We didn’t buy the domain just because we were married to the name and refused to change.
The importance of the domain to our industry meant there was a clear financial and strategic merit to the purchase. This is what decisions about your domain and your brand should be based on.”
“Right off the bat, it felt like a shrewd investment. I knew that, in the right hands, the value of Cover.com would become exponentially more valuable. This is exactly what we’ve seen as we have used it as a platform upon which to build an insurance business.”
Thanks to George Kirikos for the tip.