Domain Name Needs Substance to Back It Up
Question: I own six interesting domain names and would like to develop some of them into decent sites. Where can I find investors who would be interested in co-sponsoring some Internet sites?
--Leonard Guastella, Studio City
Answer: Having a domain name is something like having a title for a book: It might be a great title, but unless you also have interesting and informative content to back it up, there’s not going to be much interest in the book. If all you have is a domain name alone, the probability that you can really build something out of it is small.
If, however, you add value to the name by writing a business plan or partnering with someone who can, starting a preliminary Web site and doing some test marketing, you’ll have a better chance of attracting the right people and the right capital to your project.
Domain names can sell for anywhere between $100 to $100,000 and up. But you’re going to get more, and also have a better chance of ongoing ownership and control, if you build a prototype and get it ready to go to market. The more you’ve accomplished with your domain name and have surrounded it with what it takes to be successful, the better chance you’ll have of seeing your idea come to fruition.
--Rick Citron, lawyer/businessman, Citron & Deutsch, Westwood
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Q: I invented and am manufacturing an inflatable, adjustable headrest to be used in airplanes, buses, trains and automobiles. I’d like to see it sold in retail airport shops, but three large companies seem to control those shops and all of them have declined when I have asked them to carry my product. How can I get into the airports?
--Martin Strassner, Heavenly Headrest, Canyon Country
A: Here are a couple of options to consider: Approach individual store managers at local airports and ask them if you can place your product there on a consignment basis. You would need to visit the stores weekly and count inventory, restocking and billing accordingly, but if the item begins to sell well, you could collect sales data that might help you make your case to the parent companies.
Make a licensing agreement with a larger company that already sells travel items and has the marketing budget and distribution channels in place to do your product justice. Advertise the product on a Web site, where you could get overseas orders, and in airline and travel publications. Approach travel and novelty catalogs and see if they would feature your item during heavy travel times when they would typically sell luggage and other vacation gear.
Don’t forget other places where your product might get noticed. There are travel bookstores and Amtrak on-board stores where a headrest might sell very well on trips where travelers must sleep sitting upright. If your item is priced cheaply, you might consider bus terminals as well.
--Kenneth Keller, Keller & Associates, small business marketing, Valencia
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Q: A recent story about an online business raised a question. The business owner said some percentage of his products are “drop-shipped.” What does that mean?
--Russ Binder, Los Angeles
A: When an item is drop-shipped, that means that the order a customer sends to a catalog company or online business is sent directly to the manufacturer of the product. The manufacturer then ships the item directly to the consumer.
Drop shipping saves the catalog company or electronic-commerce site money in inventory, warehousing and shipping costs, particularly if they are selling heavy, hazardous or perishable items that need special packaging. Most Web sites outsource as much of the delivery process as possible, which is why drop shipment is so popular.
Another option for a mail-order or online business is to hire a fulfillment house to handle its product delivery. For a percentage or a flat fee, fulfillment houses fill orders for multiple companies. Technology exists now that allows them to download customers’ orders, package them and send them to the consumer.
If you are going to use a fulfillment house, ask some other small businesses for recommendations. Some of them specialize in certain kinds of deliveries, such as shipping perishable food items. Factors to consider when hiring a fulfillment house include: what size and weight your items are, whether they need special packaging, how much reorder business you will do and who will maintain control of your customer list.
--Peter Cowen, Peter Cowen & Associates, Westwood
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If you have a question about how to start or operate a small business, please mail it to Karen E. Klein in care of the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia, CA 91016 or e-mail it to business@latimes.com. Include your name, address and telephone number. The column is designed to answer questions of general interest. It should not be construed as legal advice.
