This is a guest Post by Andrew Rosener, CEO at Media Options. Andrew’s company has sold millions of dollars worth of domain name assets in the last few years. I asked Andrew to write about the differences between working with a large domain name brokerage and an independent domain broker.
It seems that the pool of domain brokers is getting bigger every week, which can only be seen as a good sign that the market still has a lot more meat on the bone. But as more newcomers, both brokers and investors alike, come into the domain market it becomes ever more important to analyze the various characteristics that make a good fit between you, your domain name (or the domain you want to acquire) and the domain broker; sometimes good things come in small packages!
There is a very clear distinction between a large corporate domain brokerage firm and an independent domain broker. Both can be great and highly effective, but from my experience they are effective for different things and purposes.
While a larger brokerage firm may have a great reach or larger general audience, that reach and audience may not be touching the niche places that your domain name needs to go. If you are targeting the domain investor and small business market with a domain that is probably not worth the time and effort necessary for a domain broker to actually reach out to end users by phone, mailing and other forms of personal contact, then a large marketplace is probably the right fit for you and your domain.
If you have a premium domain name that you absolutely want to hold out for a super premium price on and you have no problem with waiting and have no financial need to sell, then a large marketplace is probably the right fit for you – that’s a timing game. It’s important to remember that you will almost always get a higher price when a buyer comes knocking on your door then you will in a proactive sale and that is something to keep in mind when thinking about and discussing the value of your domain name with a broker.
Your domain might be worth $50,000 market value, but that doesn’t mean that a buyer who has made up their mind to use that brand wouldn’t perhaps pay $100,000 under the right circumstances and if they approach you to buy your domain instead of you approaching them. But one price provides liquidity (broker) and the other is like a lottery ticket (large marketplace).
Where an independent and professional domain broker plays a critical and valuable role is with high value domains which need to be brought to the attention of specific qualified and potential buyers. That requires spending a lot of time on each individual domain taken under brokerage agreement. At MediaOptions for example, we are a boutique brokerage firm with limited resources that need to be used to their maximum efficiency to give our clients the highest possible chance of selling their domain name for the best possible price. That means that we want to spend our time working on high value domain names which are priced accurately and we feel confident that we can sell them for $100,000 or more in order to use our time and resources efficiently.
We can only manage 10 – 20 high value brokered domains at any given time, but each of those is given personal attention by an independent domain broker and presented directly to the decision makers at the appropriate end users. A large marketplace will have hundreds, if not thousands, of domains under brokerage contract at any given time; it’s a numbers game (albeit, one that works well). That gives their in bound leads more variety and choice, but it may not put your domain name in front of it’s best and highest purpose buyer.
One more thing to take into consideration when choosing between a large domain brokerage firm and an independent domain broker is flexibility. Sometimes it takes some bobbing and weaving, wheeling and dealing to get a domain deal done. Whether it’s co-broker partnerships, creative financing, alternative deal structures or reducing the brokerage fee under the right circumstances, these are all things that can mean the difference between a deal or no deal. An independent domain broker can make those spot decisions where a larger entity has to run it up the flagpole before moving ahead.
The domain industry is still a bit like the wild wild west and sometimes it pays to be a cowboy!
“Good Things Come In Small Packages”
that’s what she said
It would be cool to see the other side of this with large companies explaining what they offer to us.
Good suggestion. That is in the works.
This is mostly about choosing a broker to sell domains with and doesn’t mention much about the advantages of choosing a broker to act as a buyer’s broker. I can tell you though, the big companies COMPLETELY miss the mark on creativity and coming up with good name alternatives. . . . Top thing they ask when working for a buyer “What keywords are you wanting to use” DOH!
“Good Things Come In Small Packages”
I agree with ALL you say and find your positioning right on.
Your point about Top Tranche World Class Domain holders best strategy is to be patient is illuminating. These top 1%, Top Tranch Domains Sell themselves.
If I were rick I would recruit you.
Best of Fortunes
Gratefully, Jeff Schneider (Contact group) (Metal Tiger)
Rick can recruit whomever he wants, but why would Andrew want to work for anyone else? The guy has a solid portfolio and has sold millions of dollars worth of names on his own?
Its called MORE MONEY Elliot!
He can be siiting at the head table,or don,t you get that? I bet he does. I was recruited many times and each time the Margins increased.
Gratefully, Jeff Schneider (Contact Group)
Yes, I get it. But he IS sitting at the head table right now and if he goes to work FOR someone else, he is not. He gets inventory for the largest portfolios and has brokered some of the most valuable domain names. Working for Rick doesn’t give him anything else. Trust me, if one of Andrew’s clients wants to spend $5 million on one of Rick’s names, he will take Andrew’s email and if a deal is done, he’ll make his money.
I’ve been recruited by people in this business, but when you’re making great money and answer to nobody, there’s no reason to go work for someone else.
Can you please not do a post without mentioning your MAN CRUSH grow a pair man.
I’m sure working FOR rick will not increase anyone’s margins.
Do not mess with the (Metal Tiger). Or you will get hit in the face with a tranch or tranche
Not messing with him. Just asking why he thinks Andrew would work for someone else. It would be like me recruiting the head Fenway Park groundskeeper to do my lawn.
You got that one right Shane. thanks for noticing.
Gratefully, Jeff Schneider (Contract group) (Metal Tiger)
If you think I am messing with you, nobody is forcing you to visit or comment. I asked a valid question, if Andrew wanted to work for someone else, all doors would be open, so clearly he doesn’t have any interest in that.
I visit you to experience the quality content. I don’t think I ever spoke the words Messing, often things get lost in translation, from mouth to mouth as they say.
Anyhow Congrats on getting one of the best to contribute to your site.
Gratefully, Jeff Schneider (Contact group) (Metal Tiger)
Thanks, and I agree that things get lost in translation. Shane was the one who said I was messing with you (as if I was starting some sort of confrontation) and I don’t believe I am doing anything other than sharing my opinion.
What is this metal tiger bs, guy doesn’t even own the .com.
Was Metal Tiger a speaker at webfest Shane ?
While I appreciate your enthusiasm and support tremendously, I would find it very difficult to go to work for someone else at this point in my life and career. I believe what Rick S. is offering is 5% of a deal and $500 tip of the hat. I am happy to give Rick & JointVentures a domain or two to try and find a lease for, but I have no interest in working for them.
I have been very successful with what I have and quite frankly I have access to more 6 and 7 figure domains that I could ever sell, so why give someone else a cut of what I’m already doing?
My perspective is that I’ve invested quite a bit of my time and financial resources into my business to allow me the ability to work for myself. I think others feel the same way.
I most definitely can relate to your reply. Its just that before its all over I belive Rick will broker the best of the best. I could be wrong on this PERHAPS.
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)
Rick is asking Joe Blows off the street, with lame headlines, offering big dollars, this reminds me of the Monavie juice people, that will recruit kids buying a slurpee at 7-11.
Rick has Donny Who, as his errand boy, why doesn’t he put his money where is mouth is, and hire some real sales people, with proven results, if they have the names, work the names, I have not seen anything come out of them yet. Not sure what they are waiting on… Just keep spamming domainers with the the same BS, your not accepting any names, your obviously not selling any names, yet this big launch is coming, now your trying to get all these nobodies to go do your dirty work, on dreams of millions in domain residuals…
We been around long enough, to know the truth here. He needs a proper salesforce, not a one man blog, with a lackie.
Thank you, Elliot for hosting Andrew’s article—and thank you Andrew for distinguishing where to reach out to sell in your informative writing.
Do the large brokerage firms like Flippa and SEDO appraise them before sale?
I am trying presently to get in touch with Claudia Lezon because I would like to have some names appraised but not sold.
Sedo appraisals are disappointing, in that they provide little information and come with a small list of comparable sales from Sedo (not other auction houses). Paid appraisals from large companies are generally a waste of time. Do you own research and look up comparable sales for your keywords at Namebio, DNJournal, and DNSaleprice. If you want feedback, you can run the names past people you trust, who will give you their “gut instinct” on what the names might be worth. Stephen Douglas from SuccessClick does individual appraisals and provides a ballpark starting point for a domain’s value.
If you have super short, aged .coms that you are positive are in the top 2% of names, by all means reach out to a broker you know at Sedo and ask for feedback. Most of their appraisals are fairly automated but it helps if you know someone.
Thank you so much! I have some hand-reg names I would like to donate….at first I thought I would donate them at the appraised value (FMV–fair market value) as a non-cash charitable contribution with the appraiser’s letter attached to the tax form. Now I’m thinking maybe just the cost basis… : (
I have not finished CPA Sandra Brooks’ excellent taxation manual yet and do not know if she addresses this issue.
Doing some research seems like the best way right now and if appraisal documentation is needed I will contact Stephen Douglas. Thank you again for your supportive post. Patti