When I think of a domain broker, my first thought is that these people represent the owners of domain names who are looking to sell them. There are also brokers that specialize in representing companies and people who need to acquire a domain name. These domain name buyer brokers serve an important role in the facilitation of domain name deals.
Over the course of a year, I receive quite a few requests from people to help them acquire a domain name. I almost always recommend that these people work with a domain broker to purchase their domain name. I want to share some of the reasons why I suggest this, and I asked three domain name buyer brokers to offer their thoughts. Adam Strong of Evergreen, Bill Sweetman of Name Ninja, and Alan Dunn of NameCorp all shared their insight about using a domain name buyer broker.
Setting expectations – Many people have no idea what a domain name in the aftermarket will cost, and a broker can help set expectations. “A Buyer Broker can help a client understand what sort of budget is realistic for their domain acquisition,” Bill Sweetman told me. “Buyer Brokers should have an extensive understanding (and access to data) of what comparable domain names have sold for and are currently selling for,” he continued. This can ensure that the buyer has the budget for the domain name that is desired. Setting expectations at the outset is important, otherwise it could waste everyone’s time.
Pricing – I would imagine most domain owners’ prices are dynamic. If they are having a good quarter or year, the prices of their key domain names may be higher. Likewise, if a major corporation inquires about a domain name, the price quote for the domain name may be significantly higher than if someone random were to inquire. A domain name buyer broker can likely get a price from a domain owner that is more about the value of the domain name than the size of the buyer’s treasury.
Negotiations – A buyer broker is generally very experienced in negotiations and has a deep knowledge of domain name values and negotiation strategy. According to Adam Strong, “experience gives the broker the knowledge to evaluate a domain name and quickly assess market value and price expectations based on the domain owner.” Buyer brokers tend to know the major domain owners and companies in the space, and they are able to help create an acquisition strategy based on this experience. Adam told me that “an experienced broker will also have the knowledge to help guide a buyer through different scenarios to provide the best options for the client. This experience provides invaluable guidance to clients in a variety of situations such as tracking down a domain owner, engaging an unresponsive domain owner, finding alternative names, creative deal structuring, and insuring transactions move efficiently.”
Privacy – For many buyers, remaining private is a priority. Some domain name acquisitions could tip their strategic hand to competitors or the general public, and this attention may harm the company. Even a failed negotiation could become public. In addition to this, there are other considerations about remaining private. Bill Sweetman shared that “a good Buyer Broker will manage the purchase and transaction from start to finish, hiding the Buyer’s identity and protecting the Buyer’s money throughout the entire process. This eliminates the risk of fraud and theft.” Using an escrow service like Escrow.com, Escrow.Domains, or even a law firm’s escrow account, will help reduce the risk of fraud and theft.
Relationships – Perhaps the most overlooked aspect of using a buyer broker is that they have relationships with many of the largest portfolio owners as well as many individual domain investors who own some of the most desirable domain names. “A good Buyer Broker will have established strong business relationships with those companies along with dozens of mid-tier domain speculators,” Bill Sweetman told me. “This trust factor helps ensure a timely response to purchase inquiries,” he continued. A buyer broker knows the decision makers for many large portfolio owners, and perhaps most importantly, the broker knows how to get in touch with that decision maker.
Emotion – If you’ve been involved in a difficult negotiation before, you know that emotions can play a role. The opposing party may push buttons or make comments that annoy or anger you. This can make a person more emotionally vested in a negotiation, and that can work against him. Alan Dunn told me that “the most important part of any negotiation is to remove the emotion from the deal. Hiring the right broker allows parties to focus on the value of the asset, and not the value of the buyer’s wallet.”
Alternatives – If the domain owner is unwilling to sell the desired domain name, is unreachable, or the price is beyond the budget of the buyer, a seasoned buyer broker can present alternative domain names to the client. “Clients often come to the table with a dream domain name that they quickly realize is outside of their budget,” Adam Strong told me. “In these cases, we can assist them by putting together lists of alternative name concepts within their budget,” he continued.
I would imagine that 8-9 figures worth of domain name sales are transacted annually with the assistance of a domain name buyer broker. “Many of the world’s finest acquisitions are purchased through a proxy or broker, including domain names,” Alan Dunn told me. I use DomainTools to track hundreds or maybe thousands of the best domain names, and I regularly see names that change hands without any fanfare. I believe that many of these deals involve a domain name buyer broker, and they typically fly below the radar.
It can be very helpful for a domain name buyer to use the services of a domain buyer broker for the reasons outlined above. Hiring a buyer broker can help a buyer track down a domain name owner, negotiate a fair price, and facilitate a sale.