In the Domainers group on LinkedIn, someone was asking about buying a domain name when the Whois email address was not working. In a comment in response to the query, Domain Holdings broker Joe Uddeme offered to help the buyer get in touch with the owner of the domain name. Not only is this smart networking, but working with a domain broker on the buy side of a deal can be a smart way to acquire a domain name.
Most of us know a domain broker as someone who can help a domain owner sell a domain name. Many domain brokers can also help a buyer acquire a domain name. I want to share some insight into this aspect of a broker’s job and discuss why using a domain broker to acquire a domain name might be something to consider when you are looking to buy a domain name.
Over the years, I’ve learned a lot of tricks to enable me to get in contact with a domain name owner. Most successful brokers are also good at this. They know a variety of ways to contact a domain name owner, and that can save a buyer time and effort. Sometimes getting an offer in front of the domain owner is the biggest challenge, and if a buyer is going to make a fair offer for a domain name, a broker can use all of his or her tools to ensure the offer is seen. Using a broker to contact a buyer can save time.
In addition to having the ability to connect with a domain owner, a broker can help with the negotiation. I believe most domain brokers are experts at negotiating, and they can help their client get a good deal. It may also be beneficial to have a third party interact with both parties. This can take some of the emotion of negotiations out of the equation. In addition, a domain broker can advise a buyer on an offer that may be perceived to be low. For example, a broker can tell a prospective buyer that a $50,000 offer for a 2 letter .com domain name is severely deficient and probably won’t yield a response.
Covert negotiations are also possible when using a broker. Confidentiality is important, and a domain broker can keep the buyer’s privacy ensured. The only issue with this is that many domain owners automatically assume a massive company with deep pockets is being represented by the broker, and that might cause the price to be higher from the outset. The broker should be able to help overcome this if it is possible.
I don’t use a domain broker on the buy side very often, but I do think this is something that should be considered. Having a buy-side broker may be helpful to buyers at most price levels.
(Keep in mind that most brokers will only do this on deals at a certain price level.)
See the domain broker guide to learn more about domain brokers.
How does the broker get paid from this?
I can see a broker reaching out to the domain owner, telling them that they are a domain broker and have a lead for their domain and saying they get a 15% cut of the sale, now sale price goes up by 15% so that was some expensive help for the buyer.
Buyer and broker can work out a payment.
I would assume it’s a % of the purchase price and perhaps a bonus for securing the domain name below the budget.
Elliot, if a Buyer Broker is being compensated based on a % of the purchase price, which unfortunately is a common model in the industry, then the Buyer Broker is being compensated in a manner that is at odds with the best interest of his or her client, the Buyer. That is why Name Ninja has a different compensation model for our Domain Acquisition Service, a model that aligns our goals with those of our clients, eliminates conflict of interest (real or perceived), and rewards us for getting our clients the domain for the best price possible. (Since I know you are going to ask me anyway, our model consists of a Retainer Fee plus a variable Success Fee.)
Thank you for sharing!
For a self educed headache and a rise in your blood pressure, hire a domain broker, they wont disappoint.. The trouble I’ve had is long delays and miscommunication, resulting in the sale not going through.
As a seller, your giving another person control of YOUR property, somebody you likely don’t know, somebody who is working for HIS or HER own best interest, Forget about who hired the broker, it doesn’t matter, First comes the brokers interest, then comes the Buyers interest, and lastly is the seller, the one who’s expected to substantially lower the sale price PLUS pay 100% of the brokers commission.
If you cant broker your own domain name, you shouldn’t be in this business IMO.
@ Raider, sounds like you’ve been working with the wrong domain brokers.
There are some *excellent* Seller Brokers in this industry, folks like Igloo, Domain Holdings, Media Options, Domain Guardians, Alan Hack, just to name a few (and apologies in advance to the folks I may be forgetting!). Plus some great people like Dave Evanson working for marketplaces like Sedo.
Do your homework and check references before you hire a Seller Broker (or a Buyer Broker); that way you can help avoid having the kind of problems you describe.
Somebody knows a good broker(s)? Recommendable brokers that could help me to sell a few .com TLD domains ?
Thank you, Bill – you have definitely included a nice list of reputable brokers there. I agree it sounds that, unfortunately, Raider has been working with the wrong ones.
@Andrew – you are welcome to send your names to firstname.lastname@example.org for review if you’d like.
Happy Wednesday, everyone!