McClure Sees Opportunity Brewing With Coffee.Club

 

A few weeks ago while attending a trade show in Miami Beach, Fort Smith entrepreneur Bill McClure seized a business opportunity he thought too good to pass up.

On the final evening of the annual TRAFFIC conference (an event for professionals in the Internet domain industry to meet and share ideas) at the legendary Fontainebleau Hotel, McClure negotiated his latest deal: a $100,000 purchase of the domain name Coffee.club.

McClure, 61, is also the owner of the domain name Coffee.org, a successful, family-owned online retail business headquartered in Fort Smith, and the parent company to the Miss Ellie’s Coffee brand. (McClure co-founded the business in 2008 with his stepdaughter, Ellie.)

Coffee.org is one of the nearly 4,000 top-level domain names and websites McClure has purchased in a 19-year career as a “domainer.”

“Way too many,” he joked.

But McClure thinks Coffee.club can be an international vehicle for a subscription-based service for fans of a universally popular product — coffee.

During a recent sit-down at his Fort Smith office, McClure said he is planning to launch the Coffee.club website in the United States on Dec. 1 — the first Monday after Thanksgiving known as Cyber Monday. His goal is 1,000 subscriptions the first month. He also intends to license the Coffee.club concept on a country-by-country basis.

“This is going to be a grassfire,” McClure said. “And we’re going to light it. It’s a global play, not just a U.S. play. The deal with the .club guys is the best deal of my career.”

 

What is .Club?

McClure’s portfolio of descriptive websites includes many travel, insurance, moving, golf, vitamin, diet, flowers and cosmetic domains.

While he has been a professional domain investor for nearly two decades, the Coffee.club venture represents new territory for McClure, who is betting on the success of a new alternative to the .com frontier of the digital world.

“The Internet,” McClure said, “is about to change forever.”

Up until now, Web addresses have been confined to a handful of domain names — .com, .org and .edu some of the most notable.

But a flood of new generic top-level domains (gTLDs) — the term for the word or group of letters to the right of the “dot” in a web address — are gradually being launched by the Internet Corporation for Assigned Names and Numbers (ICANN), a global organization created in 1998 to govern website names.

In June 2011, after several years of planning, ICANN introduced a program to promote competition and consumer choice in the registration of domain names.

Those interested in obtaining a gTLD had to pay an $185,000 registration fee, then pass ICANN’s vetting process to qualify.

The application window opened in January 2012, and ICANN received 1,930 applications.

Some of the new domain extensions now include .shop, .music, .news and .hotel, but of the 432 introduced into the Internet so far, only two have been more popular than .club.

.Club CEO Colin Campbell, a Canada native with a string of Internet successes to his credit (he sold one of his companies in the .com boom for $124 million), was the only person to apply for the rights to the .club domain.

He said he was fortunate because some of the bigger players in the industry overlooked .club, or simply undervalued it.

“Google applied for over 100 names, and Amazon applied for almost 100 names,” said Jeff Sass, .club’s chief marketing officer. “One applied for .team and the other applied for .group. Neither applied for .club.”

 

Club Costs

Only two other organizations applied for .club. Campbell’s south Florida-based company, Club Domains LLC, ultimately came out with the winning auction bid, officially acquiring the domain name on June 6, 2013. Campbell said the company raised $8.2 million to acquire and launch .club, a process his team had been working toward for five years.

ICANN and Club Domains LLC entered into a registry agreement Nov. 8, 2013, and since its launch May 7 this year, nearly 150,000 .club URLs have been sold.

The regular price for a .club domain name is around $15 per year, and are available for purchase through major domain name sellers (registrars) everywhere, including GoDaddy, the world’s largest domain name registrar and retailer.

Interested in buying and building a business around GoHogs.club, BentonvilleRotary.club or Springdale.club? All can be had for $14.99 apiece.

Razorbacks.club and ArkansasRazorbacks.club have been taken, however, both registered to James Burns of Dallas.

“If you missed out on the Internet land rush in the 1990s, here’s your second chance,” Sass said. “.Club is about community. Whether you’re a group of two or 200,000, you will want your own club.”

Premium .club names go from $1,500 to six figures. So far, the biggest sales have been for Coffee.club ($100,000 paid over 10 years as part of the Startup.club program), Eat.club ($20,000) and English.club ($17,500).

Mary Kay Inc. bought Beauty.club and Makeup.club for an undisclosed amount, though the sites have yet to be activated. Other sales of note have been The Walt Disney Co.’s purchase of Penguins.club for $8,000.

Campbell also convinced rapper 50 Cent to sign on, and the entertainer is an official endorser with his 50inda.club, a catchy play on words referring to his 2003 hit “In Da Club.”

And though they haven’t been launched, Campbell said Major League Baseball bought and registered a .club domain for each of its 30 teams.

In total, .club has earned $1.8 million in revenue as of Sept. 30, and there have been no other premium name sales to any one in Arkansas other than McClure.

Campbell, who said he thinks he can sell 5 million .club names in the next five years, said McClure’s purchase is a good example of a person utilizing a .club to build a subscription-based service.

“You can put almost anything in front of a .club and it just works,” he said. “From products like coffee to fan clubs and country clubs, to investor clubs, fraternities and sororities, civic clubs and sports clubs. The word ‘club’ changes the meaning of the domain name.

“When you see RollingStones.com, you think it’s a site about the Rolling Stones. When you see RollingStones.club, you immediately think it’s a site for Rolling Stone fans. Companies that want fans or passionate consumers can use a .club to build a community.”

Campbell also said .club can work in almost every country in the world, giving an international presence for companies that want to expand beyond the U.S. border.

In addition to GoDaddy, .club has already partnered with registrars in more than 50 countries.

“More than 70 percent of our names have been sold outside the United States,” he said. “The fact is that .club is the first true social domain extension the world has ever seen.”

 

Closely Watched

McClure said Coffee.club should be complemented by the passionate followers of Coffee.org, which has more than 250,000 Facebook fans and ships to more than 66,000 customers in the U.S. It sells numerous coffee brands and coffee-related items, as well as other drinks, gifts and snacks.

Coffee.club, though, will have a very narrow focus: offering “third-wave” coffee to its subscribers. McClure hopes his concept will become to Starbucks what Starbucks is to Folgers.

“It’s a movement to produce high-quality coffee, direct from its indigenous grower,” he explained. “It’s drinking fresh coffee within seven or eight days of it being roasted. Even in a coffee shop you usually don’t get it that fresh.”

McClure has a network of roasters in California and on the East Coast, but roasting for Coffee.club will be initiated through Bentonville-based Airship Roasters. Coffee.club will be roasting Arabica coffee beans, known for their high quality.

Subscription pricing models start at $29.99, McClure said, and customers can choose from one, three, six or 12 months of service. Coffee.club will also be significantly visible in .club’s marketing efforts. Included in McClure’s $100,000 deal was the purchase of Café.club for Latin America countries.

Campbell has spent more than $2 million marketing .club so far this year. He plans to spend $3.5 million in 2015.

For his part, McClure is also working with his contacts in the coffee industry. While attending the National Coffee, Tea and Water Show in Dallas on Nov. 11-13, he began discussions with the company who will launch Coffee.club in Canada.

And his new venture is being observed closely in the domain industry, including  by Ron Jackson, editor and publisher of “The Domain Industry News Magazine.”

“It will be very telling to watch this particular case play out in the months ahead,” Jackson wrote in the aftermath of McClure’s Coffee.club purchase. “McClure is just the kind of guy .club needs. He is an end user with a very successful existing coffee business, whose new venture will put the .club extension in front of a lot of people.

“The name is a perfect fit for the coffee club McClure intends to build on it, and it will be backed by a guy who already knows his way around the coffee business as well as anyone in the country. If Coffee.club can’t make a new gTLD successful then nobody can. For that reason, every new gTLD operator, not just .club, should be rooting for McClure to succeed.”