In under 10 years, the Fallenstein’s family owned business has moved from its garage to venturing online and now operating out of a 200,000 square foot warehouse with over 100 year round employees and thousands of seasonal employees. The “Whoa” moment happened when the company out of Mankato, Minnesota, now called Fun.com brought its Halloween costume business online.
I had the opportunity to talk with Tom Fallenstein about the companies amazing domain names they currently own and how they eventually ended up buying and branding to Fun.com in 2014.
When did your company start its website and what was your first domain name used?
Our first website as a company was CostumesGalore.net, which launched in 2001. Costumes Galore was the name of our local costume rental business that my family had started in 1992. I was going to school for web design and wanted to help the business by going online. The website consisted of our address, phone number and a few rental costume pictures. The next year (2002) I decided to try and sell costumes online and started my first website FlapperCostumes.com with $5,000 of inventory stuffed in my college closet. One style of costume in three colors (my three sisters were the models).
After the “Whoa” moment when the company went online and out of the garage, what made your company feel that you had to own HalloweenCostumes.com in 2008?
In 2007 we had about 10 specific costume domains (FlapperCostumes.com, PirateCostumes.com, SuperheroCostumes.com, RenaissanceCostumesClothing.com, etc). When we went to shows to purchase costumes from suppliers we were limited in what we could purchase, and we were limited by how many sites we could create. We also knew that the term “Halloween Costumes” got searched 100 times more often than “superhero costumes” or “flapper costumes”. At the time I was looking to find a domain that could house all of our costumes in the future. I settled on FunCostumes.com and started building the website but at the same time was trying to figure out if there was a bigger opportunity. I looked into who owned HalloweenCostumes.com and contacted the owner through a whois lookup; at first with no luck of reply that I was interested in purchasing it. Later I sent an email with a true offer and a high dollar amount. This email got me a response back and the negotiation started. Later I found out they were leasing the domain to one of our competitors for $50,000 a year. I also found out that the owner was actually a costume manufacture that we had not done business with yet. I can say with confidence they were interested in doing business with us once they knew what I was willing to pay for their domain name. The purchase was just for the domain name and nothing else.
The offer and purchase of the domain was a giant risk for our company. It was all of our profit going into one giant bet. But it paid off. We paid for the domain within the first 9 months of owning it. It was a giant risk but at the same time foreseeable. We knew how well we were doing with exact match domains on smaller search terms, we knew the amount of searches for HalloweenCostumes.com and we didn’t see any Google updates happening anytime soon that would change that.
Do you own the singular version of the domain name? (HalloweenCostume.com)
Yes we do. At the time we bought HalloweenCostumes.com, domains were being bought at an exponential rate so it was standard practice at the time to buy all related domains to protect your brand and access its shoppers. In today’s market, that is less important but it was a crucial part of our strategy early on.
With Halloween being one day a year, at what point and how did your company decide to diversify and go into other markets that were not related to a holiday?
When the business started hitting multi-million dollars in revenue, and because of the seasonality this all happens in a month or two, we knew we had systems in place to handle thousands of orders at any time, but only utilized those systems during one month of the year. This led us down the path of taking all of our knowledge and infrastructure and taking advantage of it year round. We were looking at areas that might complement our season and found T-shirts did well – they peak during August for back to school and Nov/Dec for Christmas, right around our October peaks, which means we could run our seasonal workers longer and keep all systems at high capacity. In 2010 we decided to expand and found Tshirts.com was going up for auction. We actually called the auction house and made a deal before it went on the auction block. Tshirts.com (T-shirt.com, T-shirts.com, Tee-Shirts.com and Tees.com) were purchased prior to a Moniker auction during DOMAINfest in New York as a package and was purchased for $1.26 Million dollars as covered by cNet.com here.
Can you please share how the purchase of the premium generic domain name Shirts.com was acquired and the business plan behind it.
Shirts.com was acquired about two years after Tshirts.com. The seller actually contacted me directly through whois after seeing some articles about our company buying Tshirts.com. After some long negotiations over two years we settled on a price. I knew long term that Shirts.com was an even better domain than Tshirts.com as it allows us to expand into dress shirts, sweatshirts and more. In 2014 we actually switched all of our traffic over from Tshirts.com to Shirts.com to keep one consistent brand. (To note: Shirt.com is owned by Amazon.com)
Can you please share how the purchase of the premium generic domain name Fun.com was acquired and the business plan behind it.
Fun.com has been a goal of mine since 2008. Once I saw the power of a great domain in HalloweenCostumes.com and knew long term I wanted to expand beyond just costumes, I was thinking “what is the ultimate domain that represents this company?” and Fun.com was it. Not only does it say everything it needs to say, it’s super short, easy to remember, and has no plurals. At the time I was talking with a colleague about what fun.com could be. He asked what would be on the site and I simply replied “What’s Fun for You?” and I got goose bumps. I knew what Fun.com could become; it could become a favorite site for millions of people to find what they are passionate about.
I started contacting the seller around 2009 through their email registered with whois. I said I was interested and didn’t receive any emails back. So once again I offered a giant amount of money in an email to see if I could get a response. That one worked, but as I found out it was still much below what they were hoping to get. So the conversations stopped for a while. I then purchased BuyFun.com as a stepping point and brand for our company to become.
During more emails back and forth I found that I was dealing with a negotiator who was representing the true seller. It wasn’t until years later when I upped my offer again that I was able to get on a phone call and chat with the negotiator and the seller. Even after those calls it took another two years to get to an agreement. But this last year (2014) we were able to close a deal and finalize our company as Fun.com.
Do you tie all your online properties together, to cross promote brands?
We are working on tying our three major brands together (Fun.com, Shirts.com and HalloweenCostumes.com). Currently if you are on Fun.com you can see the other brands. We are working on creating a unified cart across all three brands. We tied the sites together for a number of reasons. First, we wanted to improve our user experience and unify the shopping experience. If you want a Doctor Who shirt on Shirts.com, chances have it you might also like our Doctor Who bathrobe offered on HalloweenCostumes.com. Transparency was another reason for combining the sites together on both the technical and customer-facing sides of things. We wanted our shoppers and partners to know exactly who they were working with. We also wanted the capability to cross promote the brands as they really build off one another in terms of the products and personalities they offer. Naturally FUN.com emerged as the keystone brand with the broadest base and most potential for year-round growth, which is really exciting for us looking at the years ahead.
Are you able to share any more domain names / websites that you have besides HalloweenCostums.com, Shirts.com and Fun.com? Any new domain purchases in the pipeline? How many domains does the company own?
We own hundreds of domains, most are parked and were purchased when exact match domains were ranking really well on Google searches. We now put all of our focus on just our three major brands (Fun.com, HalloweenCostumes.com and Shirts.com). We own the compliment domains like HalloweenCostumes.ca, T-shirts.com, Tshirts.com, Tees.com. Most just redirect to our main sites. We also own ComicBooks.com, but have no plans to develop it at the moment.
We don’t plan to purchase any new domains in the future. With our company moving towards building out Fun.com and the expansion opportunities surrounding that domain we don’t see a reason to focus our efforts on any other domains in the future.
What made the company feel that they needed to spend money on great, .com, generic domain names?
Ultimately we needed a brand. HalloweenCostumes.com was our first brand that we could promote in that way. We also knew the internet was only getting bigger and in 30 years from now these domains will be harder and harder to get. It’s like investing in real-estate in Times Square New York. There are only so many great locations, after they are gone you are either spending a fortune to buy the whole company to get that location, or you are settling on a location off the main strip.
Do you feel owning the domain names that you do, gives you higher credibility when your domain name is seen in advertising, online (search engines), social media and more? Do you also feel this leads into trust when a visitor becomes a customer? (getting people to your website is one thing, but making them feel secure enough to actually purchase something can be another challenge).
It obviously helps. In fact our first time purchasing t-shirts we were new to every vendor, but once someone saw our business cards with Shirts.com on it they knew we had purchasing power, and immediately we would be talking to directors and owners of the company.
I think the same thing happens online. People searching for a bobble head desk toys will see multiple results. One might be from cheaptoys4less and the next from Fun.com. Which one will you trust more? It brings an immediate confidence. It’s not the end all, but it’s a big leg up. The site still needs to function well and be user friendly and everything else the customer expects.
How fun is it to own the domain name Fun.com?
It’s amazing! Anytime someone gets a business card they have to ask me about the domain. Usually its “Whoaa, how much did that cost” or “How did you get that”. It’s something I could have never imagined. Can you think of a more fun place to work than Fun.com? It’s literally in the name. So we feel compelled to live it. We play video games and foosball on breaks, regularly burst into random NERF gun wars during the day and encourage a band of stampeding gorillas to take over Mankato every year. We live our corporate values and genuinely enjoy what we do every day.
Is there anything else you wish to share?
Buying Fun.com really reshaped our entire company culture. While ‘fun’ had always been central to our company culture in every way, this added some internal credibility in terms of looking at where we’ve been and where we are going as a company. When we looked at Fun.com from a branding standpoint, our horizon suddenly broadened far beyond fashion and Halloween and into “What’s fun for you?” The challenge then becomes – within this ocean of possibility – what do we represent now and in the decades ahead. We’re excited to continue shaping this brand alongside our customers as every person shares in fun and ultimately has their own definition for what ‘fun’ really means. On this path of discovery, the sky is really the limit.
Overview by Jamie of DotWeekly
I personally want to thank Tom and Marlon from Fun.com for taking the time and opening up about the company and the many great domain names they own and the stories behind each. I had noticed that Fun.com had recently sold and a new affiliate program had started at Commission Junction and reached out to them. Being a small family owned company and owning the domain names they do is really something great, so I had to try and get the story so I could share it. Yes, they paid a lot of money for the majority of them, but they started someplace and grew. Reinvest, improve and domain names played a big role in this!
Tom shared several interesting and educational things and several that caught my attention, which I wish to share some of my thoughts on. The length of time it took to purchase several of the domains. Fun.com took 5 years from the first email, to close (as well as the giant amount of money, which still wasn’t enough. Yes it would be nice to know this number, but currently we do not). Shirts.com took over 2 years from first contact.
HalloweenCostumes.com was a HUGE risk for the company back in 2008, but it paid for itself in 9 months. So when people see a domains “sales price” many are not thinking beyond the price. Keep in mind that these domains are going to be owned for a long time and even if $1 Million dollars if paid for an example, if that money is made back up with the help of the domain in 9 months… one would say the past owner was crazy to sell it for what they did! Yes, it takes a lot more than just owning the domain name, but it’s a big driver for traffic, branding and much more so it’s an important asset that a company needs to pay attention to and budget for.
Is the current redirect of the Tshirts.com assets a mistake? Considering the amount of money paid for the domain package ($1.26 Million), the pure quality of the Tshirts.com domain… I think that redirecting the domain to Shirts.com for long-term is a misuse of the asset. There are only 2 SERP’s in Google for the domain, so that is bringing little to no traffic to Shirts.com . Any traffic is coming from direct navigation (only they know this number), links/bookmarks. The direct navigation is likely a fair amount of targeted traffic but not nearly the amount of traffic this domain has potential for riding within search engines and a brand. I understand the focus on the main 3 brands, but the Tshirts.com asset needs to be better used than a redirect to Shirts.com long-term IMO.
HalloweenCostumes.com lead into Tshirts.com, which lead to Shirts.com and then lead to Fun.com and now they own them all, plus more!
What a great story and some great domain names! Stop on over at Fun.com and see what can put a smile on your face! If you want to hide your face, checkout HalloweenCostumes.com . Need some new shirts? Shirts.com will cover you!