Morning Folks!!
After selling Candy.com just 18 months ago for $3 Million and other considerations, I got my first Royalty Check a few weeks ago. As Jackie Gleason used to say…..”How Sweet it is!”
But that is not the story today. Today I am just making sure that I am first to post the headline about the sale of Candy.com that will eventually happen and it will be for hundreds of millions of dollars. I believe $300 Million will be the eventual sales price as Candy.com has been transformed from a parked page to a world class business doing millions of dollars in online transactions and poised to do tens of millions and beyond as they continue to do a great job of marketing and growing their company in a 21st century way using 20th century basics. The only question I see is WHEN will it cross the $300 Million threshold?
Before you think my price is out of line, let me take a moment to say that by all standard accounting numbers, the value has already gone from $3M to in excess of $50M in the first 18 months. When you factor in growth over the next decade, Candy.com will be $500 Million and more. That is why I believe that it will sell for $300M and it may be sooner than even I think. 2011? Doubtful. 2012? It will be at the 9 figure mark. 2013? They'll be taking a good sniff. 2014? BINGO!! The only snag in that is in 2014 when it will be mathematically be worth $300 million, they would be crazy to sell it at that point because the trajectory would be much greater than anything one can even fathom right now.
Now I am not without motive. If and when Candy.com sells again, I get a “Kings Ransom”. So why not try and get the ball rolling? If asked I would tell Greg and Joe that $300 Million would be the price to take if you were going to sell today. But sales are a moving target. Every day of growth by Candy.com, every day of dominance, every day of getting new customers, is a day that the value and importance just increases. They also become harder and harder to compete with. But sshhhhhh…..don’t tell their competition that they are about to eat their lunch. Let’s just keep it between us girls. The accountants will tell them soon enough.
Why? Because it is Candy.com, the domain, is only a little of the story. When I look back at the deal we made, I saw the perfect image of what I was looking for all these years. Knowledge, passion, smarts, energy. All that back up by a company in business for many decades. And it is exactly that when MATCHED with a great domain name that truly makes the difference. It has to be next to perfect. Al things aligned for it to work. This one in in align and it is just so much fun to watch and be part of.
Candy.com with a Thanksgiving Day Float? Candy.com with new divisions? Candy.com with retail outlets? Passion does BIG things.
So if the domain sells in 2014 for example, $300 Million would be the number. As time goes on that price will approach $500 Million. Growth, dominance and a category leader domain before you even peel back the business plan. Candy.com will show the world what is possible selling PENNY candies and doing it worldwide and in bulk. Wholesale, retail, gifting, this will do nothing but expand and when it does it will demonstrate the true power of a domain name when married to a great business run by energetic and determined individuals. Nothing will be able to illustrate nor magnify what I have been saying all these years better than following this sale. To me the ONLY variable is WHEN it happens. Generally it happens when you become a thorn in the side of a giant or you see a company in an allied field that would like to expand and want to do it before it becomes out of reach. Out of reach varies with different people. That's why sales like this will happen sooner rather than later.
Now I have not run this by the guys at Candy.com and I hope they don’t fall off their seat when they read this, but fellas, $300 million should at least get you to the table.
Have a GREAT Day!
Rick Schwartz
Joe
It’s unbelievable how $3,000,000 can seem like nothing compared to such a huge sale. Have an even more prosperous 2011!
Joe
Jeff Schneider
Hello Rick,
I am continually refreshed by your generosity of sharing your knowledge of your experiences. Your example shines within a somewhat secretive industry. You seriously get the saying that giving is receiving and receiving is giving along with give what you covett and the skies will open up to you. I am very grateful for your blogging as should everyone who tunes in, for you have done more to increase valuations than anyone. Thank You
Gratefully, Jeff Schneider (Metal Tiger)
Anthony
Rick …
Candy.TV retail shops across the world .. begs the question why ?
Candy.Co retail shops across the world … says what the ?
Candy.Com retail shops across the world … screams when ? :)
Likesyou
You know what I like about you Rick, shameless.
chris
Damn – $3 million for a domain name – that’s more than what most people will make in a lifetime.
If I were getting a royalty check for a domain I would be pushing as much as possible to get even more money just like you Rick – however my question is this – would you be pushing this hard if you were NOT getting a royalty check?
Robin Ong
Mr Rick. Reading the post in your blog has always be the most enjoyable moments in my life for the past weeks. Stories about LipService.com, domain developments, Candy.com….hope is what I see.
hamburgler
While I love your ambition and vision, there’s always two sides to a coin.
Not all businesses automatically goes up in value with time.
This article only blows in one direction.
David J Castello
Nicely done.
The Ghost of Benjamin Graham (LSM)
by all standard accounting numbers, the value has already gone from $3M to in excess of $50M in the first 18 months.
—
Really?
Let me guess… These”standard accounting numbers” aren’t something you’re going to bother to elaborate on, right? A proprietary analysis method only you understand that PIGEONS WILL NOT GET!?!?!!?!
You’re saying that a domain name they paid $3mm for is now a $50mm asset to the company? And by virtue of these same”standard accounting numbers”, that domain name they paid $3mm for is going to grow to become a $300mm (three hundred million dollar) asset to the company in 2013? Why not a billion dollar asset? How about a trillion?
This sort of bluster and hot air might appeal to morons who don’t know their ass from a hole in the ground, but anyone with even the slightest investing background is belly laughing at this sort of fictitious, made-up nonsense. Fabricating figures out of thin air might be fun, but stop trying to lend credibility to this ridiculous process by commingling terms like”standard accounting measures” in with your imaginary bullshit. Sorry, but this is absolutely the dumbest, most disconnected-from-reality post you’ve ever made.
Please, prove me wrong and elaborate on these ‘standard accounting measures’ to show why this domain is now a 50mm asset to this company. Hint to the peanut gallery- notice how he won’t be able to do this. He’ll say pigeon a lot, call people assholes, perhaps even delete this post, but there will be NOTHING of substance forthcoming to back up his claims.
Mark
I like the optimism but you are smoking crack. Zappos had over $1B in sales and sold for about $900M in stock.
Safe to say that shoes offer a far bigger online market than candy (while candy may be a bigger overall market, it doesn’t lend itself perfectly to buying online)
Not to mention the fact that Zappos got to where they were with $60M in funding and were one of the greatest success stories out there.
Candy.com may become highly profitable and do well, but I don’t see them coming close to $300M.
Mark
Standard valuation metrics would mean they have $12M in profit (giving a very high 4x profit valuation) or they have $50M in sales (giving them a 1x sales valuation, also high).
todaro
what if people make new years resolutions to stop eating candy?
won’t it go way down in value?
Kevin Davis
Nice work and always nice to hear great news.
BullSwebsites
All Dentists love Candy.com too.
Here kids, take more candies–good for your teeth!
Candy.com is strongly endorsed by the 1800dentists dot com
UFO
Mark said…
Standard valuation metrics would mean they have $12M in profit (giving a very high 4x profit valuation) or they have $50M in sales (giving them a 1x sales valuation, also high).
WTF? I’m guessing you aren’t in M&A. Any reasonable sized turnover with good growth prospects is EASILY in the 10-20 P/E ratio. If they could do $50m of sales I wouldn’t be surprised if they net $10-15m?? (Cost of sales etc looks low), so that’s 100-300m M/Cap.
One of the big players will come along if they can start nibbling away at market share. But you need good brands for that, but I don’t see that yet. Any reasonable player wants channel distribution and brands, that’s where it can get its synergies. They need something to leverage. A domain name is ok, but its only 1 piece of the wider strategy jigsaw.
steve
Candy will only this last couple months become profitable, after the 3 mil domain / advertising / costs etc etc etc…, Which in no way makes them worth anywhere near $50mil.
They dont sell enough candy to have made more than $2mil per year. Thats a shit load (or a ship load :) ) of candy.
There profit margin must be very very slim, with the competition they have.
$90million in about 4 yrs makes sense.
There has to be a clause in your contract somewhere that when they sell, your deal is done, as no company will be happy paying someone else a royalty, for no good reason (Mean that in a good way)
Steve B
Wherever it ends up it’s amazing that the renewal fee for such a huge asset is only $10!!! Awesome investment.
Laide
There is power in developing a parked domain to website because candy.com will surely top the market and even break the world record.
Anunt
I, 100% agree with”The Ghost of Benjamin Graham’s” comment on here where he wants Rick to prove the numbers.
I dont even think Candy.com is worth $3 Million…i think they are going to file for bankruptcy and give you the domain name back very soon…Mark This Post!
Rick nor anybody else would NOT even pay $2 Million dollars for the domain name candy.com right now…not even with your bullshit $300 Million dollar news announcement!
Who wants to pay $2 Million Dollars for Candy.com right now…SPEAK UP…i dont hear anything…didnt think so!
Numbers don’t lie, people do!….i learned this from you Rick!
Good Luck and keep Dreaming!
Happy New Year!!!
Andrea
@Anunt
Numbers don’t lie, but you should study the numbers before speaking against Rick and Candy.com…
Candy.com pays an average 17 USD per 100 Unique Visitors at 15% commission to his affiliates.
100% / 15% = 6.6
So Candy.com sales are 17 USD * 6.6 = 112 USD per 100 Unique Visitors.
This means 1.12 USD per Unique Visitor…
This means that Candy.com needs just 7350 Unique Visitors per day to make 3.000.000 USD of sales in 1 year.
And this just for an average conversion ratio…
Good Night.
Eric Borgos
Anunt – Candy.com may not be worth $3 million to a domainer, but that amount is a drop in the bucket for a billion dollar candy company to spend on it. It is very hard to guess if it ever will be worth $100 million or even $300 million, but I think it is safe to say the domain right now is worth $3 million (or more).
Altaf
I cannot understand why so many ppl are jelous here? Rick is kind to open & share his success story. Why you guys cannot just bear his lessons? So many critics here got so many suggestions.Please Do something great then come up with challenge without spoiling the broth.
Wish you all a Very Happy New Year!!
domain guy
seems way to high to me,a low margin product candy. you have the cost of product and shipping with hershey passing on candy.com. then you have businesss.com.sandiego.com.foreclosure.com all with no products going into foreclosure.rick you a numbers guy outline the biz model with supporting documentation to justify your statements.i just don’t see it.
Rick Schwartz
“i just don’t see it.”
Either did anyone else when I bought the domain to begin with in 2005. Or any other domains I have purchased. So all goes with the territory. By the time folks see it…….way too late.
UFO
Admittedly, people can say any anything. But who’s sitting at the table with the money?
Personally, I’d say any company with a T/o above $5m already knows the growth strategy plan and can harness its benefits. If you’re sub $5m then you might be pushing it to leverage the name.
I actually”currently” think they have underspent on developing the website. Also, they seem to be going”bulk” sales, which seems more wholesale. You’d expect retail front end with a link to wholesale back end. You’d expect it more shiny colour than matt.. what the eyes see the tastebuds want to eat. They should get some kids to appraise the site.
Anyway, who knows the real deal in the background. If the buyer got into the name with a low upfront amount then maybe this 3m is over a number of years etc etc etc…. subject to earn out etc etc etc.
Michael Hallisey
$300 million who knows! but some of those candy company’s are the most profitable and richest businesses in the world! So would this be one of the biggest website purchases ever if it happens?
dev
so many millions and i just checked candy.com ; its just an ordinairy one of the many millions opensource oscommerce site jejejeje ; Looks like they had no money left to develop a proper site.
Jeff
What a joke. Looking at candy.com traffic I doubt they even hit $2M in Revenue this year.
Algis Skara
2 questions.
1) Can you provide real numbers that they are getting $10mm+ profit? Which considering the current 75-100k unique visitors is impossible.
2) Are you high?
Vern
It amazes me that WHATEVER Rick posts here, there are positive and negative reactions. We are not talking about your opinion of the after-life here, we are talking about domain names! Online Investments!
How many stories have you read that these things sell for 6, 7, 8 and 9 figures? And I’m not even talking about the websites that google pays BILLIONS for on an annual basis!
Fact: Ebay bought Shopping.com for $640,000,000! And then bought Rent.com for like $440,000,000! I could go on, but if your reading this, I’m sure you have read the”SOLD” lists at one time too.
I love America and our freedom to have our own opinion, but how much proof does anyone need to believe that domains are this F’n special?
There is no way in hell one could buy a house for $3m and flip it for $133m 2-3 years later, but the guy who bought CreditCards.com did. I believe Candy.com could sell for $300m. Why not?
Now, I don’t know Rick from Jesus, but I do think he knows what he’s talking about. This dude takes the time out of whatever life style he lives and gives us his”two-cents” on the industry that we all obviously love (if you’re reading this domain-related blog that is).
Good day all. Be safe, but have fun in 2011.
PS; The glass is half-full.
Joe Saladino
EXCELLENT Rick! I canNOT every remember doubting you! You THE DOMAIN MAN! Thanks for the info! God Bless! Joe Saladino
dotdot
Google treats http://www.c-andy.com the same as http://www.candy.com. So why can’t I sell this domain for 3 mill.?
The Answer Man
“Google treats http://www.c-andy.com the same as http://www.candy.com. So why can’t I sell this domain for 3 mill.?”
Two reasons:
1. The value of Candy.com is not based on where Google thinks it should appear in their search results.
2. You’re not Rick Schwartz.
Bill
Eric Borgos – I usually like your comments/blog but you are way off this time. candy.co… margins are fat…but for how long? Their prices are outrageous – people are no longer paying for high margin products when it’s so easy to shop around online now…the Internet for products is deflationary.
Also you say candy.co.. is worth 3M – you have a ton of domains but it’s in your interests to push domain name value propaganda just like Rick.
candy.co must have a huge staff and has to pay Rick the 3M in installments (my guess – not fact)…so over 10 yrs that is 300K/year) – I would rather have a brand name than a good .com name that I paid 3M for… .com will be soon be seen as a fad (don’t get me wrong I’m a domain guy myself) but the fact is it will not be so cool anymore – plus when Google eventually changes its’ algorithm from favoring generic domain names watch out.
All this being said – I think Eric and Rick are smart guys – I just think there is too much propaganda now.