I am neither a domain consultant nor a domain broker, but I receive quite a few requests from people to help them with their domain investment decisions and businesses. One such request came last week, and when the domain name intrigued me, I saw that I knew the owner of the domain name.
Despite the fact that I would not help the person who inquired, it got me thinking about a potential conflict of interest. If I were to have agreed to consult on behalf of the person who inquired, it could have caused a potential conflict of interest because of my association with the domain owner. This is something people who use domain consultants and domain brokers need to consider before signing a letter of engagement.
The domain name industry is somewhat of a tight knit community, and there are many business and personal relationships between domain investors and people who do domain name consulting or brokering. I would presume most of the most well known domain brokers and consultants know the largest domain portfolio owners, and some may have business relationships. Unlike the legal profession which is governed by state bar associations and laws to help prevent conflicts, I don’t know if the same types of regulations would apply to people who act in private consulting or brokering capacities.
I would imagine most professionals would disclose the potential conflict of interest before working with a client. However, in a business that typically relies on self-policing, people need to be aware of the prospect of conflicts of interest because some people might not find it necessary to disclose an association or other relationship.
Before working with a domain consultant or broker, it would be wise for a potential client to ensure that there aren’t any conflicts of interest that may pose a problem for any party. Again, most people would likely volunteer this information, but it’s always good to ask.
If you were looking to hire a consultant or broker, would you hire one that didn’t at the bare minimum know the key players in the industry ? It is important to discuss the potential with a client but someone seeking advice should likely look for an expert and that expert should be well connected. 2c
Great point.
This is not really related to conflict of interest, but your story reminded me that that out of a few dozen sales I have made through brokers, two were to buyers who had already bought domains from me before. And one of these repeat sales was for over $1 million (the other was for around $20,000). In both cases they were to contacts at these companies that were different than who I was usually dealing with.