About a year ago, I bought a new limited edition Hermes tie to mark the opening of their Wall Street store. The tie has bulls on the wide section and bears on the thin section, and it is lime green. Tonight I was feeling under the weather and didn’t go out, so I spent some time on eBay.
To my surprise, I saw the exact tie that I purchased on sale for $1,900. I also saw another similar tie in red selling for $250 (with 13 hours remaining), and the seller mentioned that he’s seen this tie selling for over $1,000.
So my question is this, do I try to sell the tie or keep it? I don’t need the money right now, but I also don’t need a $1,000 tie 🙂
Who's Your Domain Broker
It seems that everyone in the domain business is becoming a domain broker. I suppose being a domain broker sounds good – you get to sell other people’s domain names without having to take on any of the risk of buying the domain names. You make a commission if the name sells, but don’t lose a dime if it doesn’t. Brokers also aren’t generally exposed to the legal risk of domain ownership. I know several top domain brokers in the business who I wouldn’t hesitate to use, and I think you should ask some important questions before you commit to a broker:
- How long have you been a domain broker?
- What other premium names are you brokering?
- Where do you plan to sell the domain name and by what means – (phone, email, letter)?
- Do you have Fortune 500 contacts?
- What are some of your past large domain sales?
- Will you be contacting end users and/or do you know potential end users?
- Do you require exclusivity, and if so, for how long?
- What commission rate do you charge?
I’ve seen a number of people mass emailing domain names they are “brokering.” The funny thing is that on one occasion, the domain owner didn’t even know his name was being brokered. The person inquired about a domain name, received the price, and then attempted to “broker” that name for the price + profit. If he found a buyer, he would have purchased the domain name. If not, well, he has little risk. The owner found out about it, but was more or less blase because it was someone that was trying to sell his name. Personally, I would never allow someone to claim to represent me without my prior knowledge and approval.
An issue you need to be cognizant of is that brokers don’t usually have any legal risk with the actual domain name. If they contact potential end users who decide that the name infringes on their brand, the broker could be the cause of a lawsuit or UDRP. They have no risk if they try to pitch McDonald.com to McDonalds (for example), so why not try to get the most money from the wealthiest potential buyer.
You should also discuss where the broker will be selling your domain name. Anyone can put a domain name for sale on a forum or a blog. However, if your broker has an active domain website or a well-subscribed to newsletter, that would be more beneficial. Whatever the case, you and your domain broker should devise a strategy specifically for selling your domain name.
There are a lot of people who claim to be domain brokers, but only a few who I would personally use. Before you commit to a domain broker, make sure you check his credentials to make sure he is legit. You will want to use a professional domain broker and not just a person who can’t afford good domain names on his own and just wants a cut of your domain sale. There are some great domain brokers out there, and it pays to use their services.
ZL.com sells for $45,100 on NameJet
In a pretty remarkable auction that just concluded minutes ago on NameJet, 2 letter .com domain, ZL.com sold for under $50,000. Â While the value of LL.com domain names has been declining recently for a couple of reasons, I was surprised the result of this auction was so tepid. Â Initially, I believed the name would sell for no less than $75,000.
I believe the general economy is putting a damper on the value of these domain names, and I think there may be a bit more risk to owning them, as there are generally a number of companies who can claim the rights to a short acronym, as was the case with LH.com, which is still pending in the US legal system.
If you are bullish on LL.com domain names, now is a good time to buy.
Rate Your Registrar
Andrew Allemann of Domain Name Wire just launched a new website where you can rate various aspects of your favorite (or least favorite) registrar. The new website, called Registrar Judge, allows users to submit reviews on 12 of the largest domain registrars, with the plan to add more registrars in the future.
This is a nice way to provide feedback to others in the domain industry as well as those who work for the registrars. Â Congrats to Andew on the launch!
Use a Domain Contract for Domain Sales
For a variety of reasons, I think it’s important that domain buyers and sellers use contracts when moving forward with a domain sale. It’s probably more important for the buyer to have an agreement, but both buyers and seller should use one – even if the escrow service you choose to use has an agreement, as I don’t believe it covers anything related to the actual domain name.
Like many other domain investors I know, I sometimes am lazy about getting a domain agreement, especially on a lower value deal. When dealing with non-domain investors, submitting a contract for review can be a hurdle, as many people are leery of a contract, and some will want to have a legal review done by their attorney, which can take some additional time and add additional costs to one or both parties.
When dealing with domain names that might not be considered completely generic, I strong recommend using a domain contract to add an extra layer of protection. Any domain or contract attorney can probably provide one to you at little cost, which can be used as a template for all of your purchases and sales going forward.
Some things you may want included in the contract include:
Terms of Sale
No Legal Problems with Domain
Any Encumbrances on Domain
Non Disclosure Agreement
Tucows Stripped of WADND Registrar Seal of Approval
In an email sent by Rick Schwartz today, World Association of Domain Name Developers Inc. announced that Tucows has been stropped of the WADND Registrar Seal of Approval that was awarded on October 22, 2007. To receive this seal of approval, a registrar has to meet the following criteria set forth on the WADND website:
1. Registrar must agree to cooperate with all other Registrars when a domain is claimed to be hijacked.
2. Registrar must have 24-hour Hot Line for reporting stolen domains or other registration problems.
3. Registrar must delay transfer, or double-check authenticity of purchaser when transfering a domain to a Registrar who knowingly harbors hi-jacked domains.
4. Registrar must have “Executive Lock” in place that can only be removed by direct communication with Registrant.
5. Registrar must have a minimum of one million (1,000,000) domains registered.
6. Registrar must provide sufficiently direct means to unlock domain locks, so as to not unduly deny a legitimate transfer request from a verified domain name registrant.
7. Registrar must collect emergency contact information from registrants, other registrars and resellers to respond to an urgent restoration of a hi-jacked domain.
8. Registrar must define and make clear the emergency procedures which can be instituted in events where emergency contacts are not available.
9. Registrar must provide clear and readily accessible information to registrants regarding domain locking and domain name protection measures offered by Registrar.
Below is the press release distributed today:
The majority of non-obstaining Board of Advisors from the World Association of Domain Name Developers Inc. has voted to revoke the WADND Registrar Seal of Approval awarded to Tucows.com. Tucows has continually chosen stockholder interests over domainer interests. The latest plan, selling expired domains they kept from their own customers for failing to timely renew.
http://www.thedomains.com/2008/10/29/tucows-now-selling-the-expired-domains-they-kept-from-their-customers/
http://www.thedomains.com/2008/10/31/tucows-responds-to-yummydomainscom/
http://www.whizzbangsblog.com/index.php/20081110486/MyBlog/Conflicts-between-customers-and-registrars.html
And earlier this year:
http://www.thedomains.com/2008/06/21/ethics-of-domain-drop-auctions-tdnam-and-namejet-called-out-yesterday-today-we-call-out-tucows/
http://www.thedomains.com/2008/06/25/tucows-response-to-our-post-not-good-enough-and-heres-why/