Is “Double Dipping” Acceptable?

Elliot Silver
-
43

I am interested in knowing your feedback about a topic I’ve discussed in private with a few people during the last few years.

“Double dipping” is where an intermediary (can be a broker or marketplace) takes a percentage commission from the buyer of a domain name as well as the seller, and each person believes he is the only entity paying the commission. Similarly, this can also mean the broker or intermediary is pocketing the difference between a buyer’s price and a seller’s offer, and taking a commission on top of this.

I want to share two hypothetical examples to illustrate what I mean.

  • A broker contacts me on behalf of a buyer and offers me $10,000 to sell ElliotsBlog.com to his client. I agree to the terms, which includes my paying a 15% commission. The broker also told the buyer he needs to pay a 10% commission for closing the deal, without mentioning that I am paying, too. Instead of making just $1,500 or $1,000 total on the buy or sell-side commission, the intermediary is actually making $2,500.
  • I list ElliotsBlog.com for sale in a newsletter or on an aftermarket site for $10,000. Later, I am informed that an offer of $8,000 was made, and I accept it. The intermediary tells the buyer that my price is firm, and he agrees to pay $10,000 to buy the name. The broker pays me $6,800 after taking my 15% commission from the supposed $8,000 sale and also keeps the $2,000 difference between what the buyer paid and what I thought the sales price was. In total, the “commission” was $3,200 instead of $1,500 on a $10,000 deal.

In both of these cases, the buyer and seller are willingly accepting a deal that’s presented to them, so it’s not entirely unacceptable since both parties agreed to the deals as presented. However, neither would likely be happy if they knew that the broker wasn’t presenting the full offer or was charging double commission.

There aren’t as many legal regulations on brokering domain names as there are with real estate, where this would likely be prohibited.

If the buyer and seller are both happy with the deal as presented to each, is there an issue with this happening? What are your thoughts on this type of thing?

Using a Domain Broker RFP

Elliot Silver
-
22

Not all domain brokers and brokerages were created equal. Some brokers will use a newsletter to sell a domain name, and others will personally pitch end users via email or phone. Some brokers have significant experience selling specific types of domain names, and others don’t specialize in a vertical. Different brokers charge different commission rates for different sales efforts.

There are many differences between the various brokers and brokerages in the domain industry.

When people have emailed me in the past to ask for advice about working with a domain broker, I’ve generally recommended that they issue a RFP (request for proposal) to their top 3 or 5 brokers and brokerages. The purpose of the RFP is to see how the broker will go about selling a domain name and how much it will cost you if the domain name is sold.

I am looking to sell CallCenters.com, and I am going to take  issue an informal RFP to the companies I intend to engage. I want to share the questions I plan to ask, so you can see how I set up a RFP. Feel free to recommend other questions or ask why I am asking something, and I will address it.

1) Have you sold similar domain names, and if so, what names and what were the sales prices?

2) If you are given the exclusive contract, what marketing activities will you undertake in order to sell the domain name (phone calls, press releases, emails, mailing list newsletter, placement on your website…etc)?

3) What is your valuation of this domain name and where would you price it?

4) What is your commission rate and exclusivity period?

Monsanto Buys Channel.com

Elliot Silver
-
16

A little over ten days ago, Sedo sold Channel.com for $125,000, as first reported by Hybrid Domainer and then by Mike Berkens on TheDomains.com. There was some speculation about who bought Channel.com, but it doesn’t look like anyone guessed the buyer correctly.

I received a domain monitor alert from DomainTools this morning informing me that a Whois change had taken place on Channel.com. The domain name appears to have been acquired by Monsanto, a publicly traded agriculture and seed company trading on the New York Stock exchange under the symbol MON.

Monsanto operates a brand called Channel, and according to the Monsanto website, “Channel ® is a premier seed brand specializing in corn, soybean, sorghum and alfalfa. Channel offers high performing genetics that are sourced globally, tested locally and supported year-round by a team of Channel Seedsmen who walk their customers’ fields and learn their challenges.”

This seems like a wise acquisition for the company, especially since it’s a nice upgrade from its current url,  ChannelBio.com.

BuyDomains Testing Simple Sales Lander

Elliot Silver
-
27

A friend sent me the link to a new landing page currently being tested by BuyDomains, and I thought it was interesting. When you have a chance, take a look at the landing page for RemoteGuardian.com, a domain name owned by BuyDomains. You’ll notice how simple the lander is, with a “This domain is for sale” graphic and not much else.

In addition to the large graphic, there is a call to action phone number and form to submit information for a price request. There is no monetization on the landing page (aside from the sale notice), and there isn’t a price listed either.

My gut says that they are probably testing this on low/no traffic domain names, and excluding PPC links won’t cause a loss on those types of names. Many small business owners and individuals visit a domain name they are interested in owning to see if anyone has anything built on it, likely because many aren’t all that knowledgeable about finding a domain owner using the Whois database. In my opinion, there’s little sense in having PPC links on no traffic names, since that may look like some development to these visitors who may be reluctant to make an offer if they see any type of development.

I reached out to the company to ask for details, and Ted Olson, Director Monetization at Afternic and SmartName, gave me a bit of insight: “As always, we test new ideas and concepts on our own portfolio before rolling it out to our partners. This is the first of many iterations to come, and we are excited to see how well it performs.”

If BuyDomains rolls out with this on a wider range of domain names, perhaps domain owners should take note of the change since they may consider this on their own domain names that get little traffic.

Thanks to NameBio for mentioning this to me.

Sedo Sells End.com for $100k

Elliot Silver
-
3

 

Sedo broker Dave Evanson just reported that his company sold End.com for $100,000. The Whois has already changed, but it’s now under privacy guard at Go Daddy, so the buyer is unknown at this point in time. There are a whole lot of END acronyms, and many other extensions are also registered.

The domain name was one of the first domain names registered, and it holds a creation date of November 1993. The domain name was sold by someone in New Jersey, and the historical Whois information  shows that  it was once owned by End Technologies. The seller appears to be have been once affiliated with that company back in 2001.

Congratulations to all of the parties involved in the sale. It’s a pretty solid price for a nice domain name.

Have You Used a Video to Sell a Domain Name?

Elliot Silver
-
6

I haven’t tried this method before, but I heard about someone using a YouTube video to try and close a domain sale, and I thought it was interesting. The domain name listed for sale in the video is Electronic.com, and there is a link to its Sedo sales listing below the video.

Personally, I don’t like the quality of the video and think it might be more effective if there was some information about the domain name and keyword, and perhaps a bit of information on why someone would want to buy Electronic.com. The video sort of looks amateur-ish, although the idea is pretty good.

If the owner is uncomfortable speaking on camera, perhaps he could create a script and hire a model (not necessarily someone who looks good, but someone who looks professional at least). Once that is done, the video link could be emailed to prospective buyers to gauge their interest in the domain name.

What are your thoughts on using a video like this to sell a domain name, and how would you make it better? BTW, this isn’t my video and I have no idea who owns the domain name.

1...192193194...254Page 193 of 254