Domain Leasing, Joint Venture or Co-Development
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PostPosted: Thu Mar 28, 2013 11:07 am 
Site Admin

Joined: Wed Feb 27, 2013 12:47 pm
Posts: 28
Location: Langley
This seems to be one of the most commonly asked questions.

1/ How long do they want to lease it. I would consider a shorter term lease (say 5 years) as being less desireable
than a longer lease 10-20 years and would up the price accordingly.

2/ The quality of the leasee. How big a company & how stable. I mean let's face it I'd rather lease to IBM
than Harry's bar and grill.

3/ How will they pay. Wire transfers and Paypal clear instantly and you know when they're not made. Checks
have to be mailed (of course it's in the mail), can take a long time to clear and can bounce. Nowadays I prefer
the first two options and would up the price for taking a check.

4/ Location of Legal Jurisdiction: Some leasees will insist that any legal actions required take place in a certain jurisdiction
This can be for a variety of reasons but most likely to keep their expenses down and yours up. Price accordingly.

5/ How stable is the industry. Let's face it the internet has been a real game changer. Industries are drying up, failing
or being discovered. If the industry your domain relates too has a certain shelf life you probably want to make more for it
upfront while it is valuable. I've read that 3d printing is going to have the same effects on manufacturing, shipping and retail
that the internet had on books, movies, music and retail. A real game changer. Domains linked to these industries may have a sunset
in their future.

6/ Usage. If the industry it represents pays extremely well such as financial or legal the return should depend (at some point) on the potential
of the site rather than the straight lease price. An agreed upon amount early on and then switching to performance based returns with minimum guarantees can give you the best of both worlds.

7/ Deposits. If the leasee refuses to make a security deposit (say 3 months) I would price it higher as the risk of abandonment is much higher.

8/ Terms of Payment. A leasee who requires 60 or 90 days to account for performance leases will leave you with a much larger loss than one who pays within 15 days of the end of the month if they default. Price accordingly.

9/ Currency of Payment. Fluctuations in currency exchange can really change your returns. As an example pre 2007 we got an exchange rate of about $1.60 Canadian for every $1 American. This meant $100 american would give me $160 canadian. Nowadays the two currency's run around par and $1 American = $1 Canadian. This has diminished our returns from PPC drastically. A lease would have suffered the same. And that doesn't account for inflation declines.

10/ Make sure the contract is indexed to the CPI (consumer price index) at a pre-agreed date for fixed payments. Performance based payments should be OK as they will rise with the general rise of prices due to inflation.

PostPosted: Wed Apr 03, 2013 11:04 am 

Joined: Wed Mar 20, 2013 4:03 pm
Posts: 13
This is very detailed and full of excellent information! Thank you very much.

I would presume rather than adding all terms to names available to lease here these points would be raised and put down in the contract between the two parties?

Thanks again for the insight from someone who has rocked the boat in terms of monetising domain names via the leasing model!

PostPosted: Wed Apr 03, 2013 11:22 am 
Site Admin

Joined: Wed Feb 27, 2013 12:47 pm
Posts: 28
Location: Langley
Yes it is more of a "heads up" if you're leasing one of your domains out. Things to look for.

There may be other ideas so everyone please add your own thoughts.

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