11|10|2008 2:52 pm EDT
Vibrators.com Sells for $1 Million
Domain Name News received word today that PriveCo Inc has purchased Vibrators.com for $1 Million. The Michigan based company has been running the website at Vibrators.com since 2002. PriveCo runs several other e-commerce websites focusing on the sale of items which people often prefer to buy in privacy via the internet. Some of PriveCo’s sites include ShopInPrivate.com, Bachelorette.com, BacheloretteParty.com, BacheloretteParties.com and SexToyParty.com.
A few people have raised a concern that the sale looks suspicous, as the domain has not changed ownership according to the whois records. DNN spoke to PriveCo President Tom Nardone on the phone and he gave us the exact details of the transaction. Priveco has closed on the deal to buy the domain outright, but whois ownership has not changed because the current owner is financing the deal. Priveco made a six-figure down-payment on the domain name and will be paying the rest off over the next few years with an 8% interest rate.
UPDATE : Nardone gave me the original numbers but I kept them out of the story as a courtesy to keep some of the specifics on the deal private. Since TechCrunch just released added those, we’ll put them up too. PriveCo paid $200,000 down and will pay $800,000 off over 5 years at 8% interest.
Since PriveCo has run Vibrators.com since 2002, essentially leasing the domain, the company is in the best position to end up buying the domain. Nardone explained “It’s not like it was easy to buy. . . .but we know the business. This keeps orders coming in to our warehouse.” The company is in the best position to know the true value that the domain name can bring in to their organization and spreading out the acquisition costs over time allows them to spread that risk as well.
Press release follows after the jump.
Why Did They Buy A Domain Name For A Million Dollars?
This week, PriveCo Inc. purchased a domain name for $1 Million. PriveCo is a small company in the suburbs of Detroit, Michigan and a million dollars is a lot of money to them, especially in these tough economic times. There is something special in the combination of PriveCo’s business strength and this name, though, and that combination might be enough to make the deal work.
PriveCo was founded in 1998 on the principle that some items are best bought in complete privacy. Back then, the Internet was new and shopping online was a novelty. PriveCo began selling embarrassing products online at a site called ShopInPrivate.com. Customers responded positively to a brand that promised personal items and complete privacy.
In the early days, PriveCo, whose name is a contraction of the words private and company, was a one-person operation They began by operating out of a spare bedroom. Now, ten years later, PriveCo is a thriving operation whose warehouse ships 1500+ packages per week. Still, they are privately owned, and not wealthy.
So what possessed them to spend $1,000,000.00 on a domain name?
- It is an instantly recognizable name,
- Tied to products that people want to buy in complete privacy
- Customers will value PriveCo’s policies and services
- Competitor websites lack professionalism and tact
- PriveCo has strong experience in this field
Will that be enough to make their business decision work? Well, that is a risk they’ve decided to take. Of all the companies in the world, though, PriveCo is probably the best choice to run Vibrators.com.
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9 Comments
sevent
November 10, 2008 @ 6:41 pm EDT
With the internet flooded in free adult video (all the _tubes) adult providers are shifting into the sale of “hard” goods, so it makes sense that investments would shit that way in terms of domains too.
Marty
November 10, 2008 @ 7:08 pm EDT
I feel like a million dollars for that domain was a good price. It is the category killer domain for that line of products, and as you mentioned, has a lot of demand on the internet for the privacy issue, as well as they are small enough to ship. Good move by PriveCo.
Mike
November 12, 2008 @ 2:33 am EDT
A well setup and established business… not just a domain.
$1m definitely a decent amount of money for it — congrats to both buyers and seller.
Adam Strong
November 12, 2008 @ 2:45 am EDT
Mike. The buyer didn’t buy the business. They built a business on a domain then they bought it. The only thing the $1m bought was the name.
Reece Berg
November 12, 2008 @ 11:08 am EDT
Nice story behind the name and purchase. Thanks for sharing Adam!
GPS
November 12, 2008 @ 1:12 pm EDT
Thanks for the additional details, from those of us that don’t hang out over at techcrunch…….nice to see how some of these big deals are structured.
Jeff
November 12, 2008 @ 4:26 pm EDT
Thanks for the information. I would add that while the nominal amount paid is 1 million, the real amount paid factoring in the cost of borrowing is 1,173,267 – minor detail.
Karan Goyal
November 12, 2008 @ 4:28 pm EDT
That’s definitely a nice case study, how a domain name can build your business and become a brand in itself.
Dave Zan
November 13, 2008 @ 2:23 am EDT
That is one vibrating sale there. :)