A few years ago, I used Sedo’s escrow service for a private domain sale. I had closed the deal in private, but I wanted to have a safe transaction so both the buyer and I chose Sedo to facilitate the payment and transfer. The following week, I saw that my sale was reported to DNJournal by Sedo, listing Sedo as the “Where Sold.”
This same thing happened when I used Moniker to handle the escrow for a transaction several months later. The company didn’t facilitate the sale, and it only handled the escrow for the transaction. This upset me because I didn’t know they reported all sales, and had there been a confidentiality agreement, it would have been violated.
In both cases, Ron Jackson quickly took down the sales reports for me, as I did not want the previous seller to see the prices at which they sold.
I was chatting with a friend today who let me know about a Sedo policy I find disappointing. Sedo charges an additional 2.5% to their sales commission to keep a sale private. I thought this was funky, but it was confirmed by a Sedo employee. I know it’s only 2.5% more from your gross sale, but it seems like highway robbery to me. I hope Sedo reconsiders this additional fee, and I encourage people to simply avoid the fee by asking Ron not to post the sale.
Whenever you buy a domain name from any domain venue, you should proactively request privacy before finalizing your transaction. If the company won’t honor your request (or charges you to keep it private), you should consider your other options.
You know, when you sell a home or physical plant, the price is a matter of public record, and is published in the local newspaper and registered at city hall or country offices for anyone to research.
Too bad that domain sales don’t have the the same kind of legal stipulation.
Everyone insists that transparency should be a goal for this business, but no one wants any light shed on THEIR transactions or business. It’s always a matter of NIMBY.
Believe me, if ALL domain prices (no exceptions) were a matter of public record, this industry would change for the better.
“Everyone insists that transparency should be a goal for this business”
@ Ms Domainer
Not me… I can take advantage of this imperfect marketplace with my knowledge. If there was a MLS and we all knew the same information, it would be a lot harder to do what I do. I am content having a majority of sales stay private.
“Believe me, if ALL domain prices (no exceptions) were a matter of public record, this industry would change for the better.”
I don’t think so. People would still register crappy names thinking/hoping they were worth a lot of money. It would make it more difficult to find good deals on domain names in private.
Hi Elliot, I think the 2.5% is very reasonable price to pay simply because part of their business model is to publicize past sales to attract future business. Sure you can ask Ron to not publish the names, but in the end, if everyone did that, Sedo would have to make up for that loss of “free” advertisement in the form of higher fees.
For instance, I am sure that Sedo’s activity in the .org category will soar over the next couple of years due to the poker.org sale. If that was a private sale, Sedo would potentially lose out in 10’s of thousands of dollars in commission.
My bet (and I don’t know for sure) is that someone negotiated a better commission deal than the standard 10%, and there was no mention of the 2.5% either. This is just a guess though.
It’s also not just about Ron since other sites archive and report sales.
@Elliot – So when selling a domain name to an end user, you never link them to DNJournal sales reports or quote NameBio past sales to justify your asking price? If you have done that before, I don’t see how you can argue that having more sales public wouldn’t be a good thing for this industry.
If you’ve never done that before, you should try 🙂
I get that it hurts you for people to be educated about domain values when buying, but it also helps you when selling.
I do send them to the sales reports, but I don’t personally report my sales for a few reasons, with #3 being the most important:
1) I don’t need the attention that big sales garner
2) I don’t like people pitching me names they think I would like because they’re similar to something I sold
3) I don’t want the guy from who I just bought a name for $5k to know I sold it a week later for $25k
4) I want to be able to quietly buy similar names without additional competition.
You are very wrong. This argument is usually made by people who do not sell many names to justify asking prices for those couple they do.
Bigger sellers have no desire to report sales for a number of reasons including (a) simple privacy (b) silly price increases across the board by those domainers who just raise prices when a type of domain name is “in” or others, just to name a few.
I can name numerous examples (as I’m sure can Elliot) when big buyers have come into the market and as soon as one or two sales went public all of a sudden thier cost basis went through the roof since many domainers were trying to get on the bandwagon.
This is not the way to sell names. As a seller you should understand how much your name is worth to (a) an investor (b) a developer and (c) an end user and not try to jump on bandwagons to justify your price.
If you dont know how much your domain is worth you are simply a gambler.
In fact, it speaks volumes about how many domainers dont have a clue about valuations as it is. One buyer does not create a marketprice everytime there is a pattern, it creates a buyer — not a standard to base all future sales of similar names on.
Domains are unique and even with a MLS type vehicle it would do nothing but create a silly reference guide for smaller domainers to sell to one another.
Bigger sellers don’t care about automated valuation methods nor will ever sink a dime into a MLS like system since end users dont care about these, neither do developers nor premium buyers plus they can not take into factor intimate details such branding.
The industry only embraces automated valuation methods FOR VALUE in the bottom range of domainers who struggle to find rational arguments to justify an asking price on a poor name.
These automated methods are widely used for the OTHER data by many of the top domainers but for value no.
If you buy a foreclosure do you want it reported?
There are public listings for real estate sales (tax records) but there are sooo many ways around avoding reporting even these for sale as many astutue investors do.
Your reasoning is not right nor reflective of any other industry where people buy and sell stuff. Privacy of cost is of utmost importance to anyone sellin anything.
Everyone is correct here. For Elliot’s business style, he does best when they aren’t publicized.
For many others – myself included, the opposite is true.
Personally I don’t mind the 2.5%.
Whether you like it or not, it’s good to know that you should expect your sales to be reported with these companies in the event your buyer or seller doesn’t want the information published. I didn’t know at first and that’s a reason I chose to post this article.
I don’t think many end user buyers know that sales are even reported, so this could be an issue for a private company that is involved with a large transaction.
it seems as though you are performing a 180 on the topic of transparency – i recall a post many months ago about potential buyers masking their identity – you were firmly against this practice, arguing for full transparency by buyers and sellers alike – understandably, this topic is different but it still speaks to the issue of competitive advantage.
i await your mea culpa.
If sedo is charging an additional 2.5% for non disclosure when they are only being used as escrow, Then Sedo should not be used IMHO. Escrow arrangements should be considered private. I understand that they now charge that fee if you do a deal thru them and wanted not to disclose the deal. I think they have balls to charge it but they want the publicity so I understand why they are doing it.
As for escrow, i would personally not use them if they are disclosing the deal and you are only using them for escrow. Escrow.com is competitive on rates as well as the main domain attorneys.
“this topic is different”
@ Michael Carter
Yes, this topic is very different than what you reference (although I don’t remember that specific post). Transparency is important when dealing with domain auctions and PPC.
I believe that the way the market is benefits me when I am buying names in private, and I only remember reporting one transaction to Ron Jackson, when I bought Lowell.com from Rick Latona.
The reasons I don’t like to publicize sales are listed above.
I don’t have a problem with Sedo charging a fee to keep deal prices private. You’re basically paying for them to reduce their media buzz.
What I agree with is that companies need to be more upfront that this information will be made public. I’m sure most end user buyers don’t know this, and I imagine most don’t ever notice that it becomes public. But they should be made aware.
As for just emailing Ron to ask prices to be removed…these days a lot of us get sales data so that isn’t the best way to go around it.
So you publish your sales, just not your sales prices.
Mr. Absurd has a name for guys like you, “attention whores”
You’re a moron. There are no sales PRICES listed, and that’s the important thing – and the thing that is being discussed. Many of my sales are posted in public spots (like forums, newsletters, and my blog), so the information is not exactly private. Sales prices are private, and I think it should be a mutual buyer/seller decision rather than having an escrow service report without asking for permission.
The primary reason I list my projects and sales is so people who don’t know me from the next guy can see that I am not a newbie. It’s important to know the background of who you take advice from, and I am very proud of what I have accomplished.
BTW, this is not the same “Borat” who frequently posts on my blog. This is some anonymous commenter.
Elliot is right about reason #2 above…in fact, I just sent him iFitnessTrainer.com for almost noting based on a past post…but I am sure still annoying. Now I want to send Weight-Room.com — and I agree…it can be bothersome. So, Elliot, I retract the ifitnesstrainer 😉
Your email wasn’t annoying. Many emails contain 50 newly registered names with ridiculous asking prices and the owners don’t seem to understand why one domain name is worth $x and another is worth 1/1,000 of $x.
PS: Any interest in TravelSouthDakota.me? Kidding 🙂
Sedo charging an extra 2.5% for deal privacy is a bad practice. They are lucky to have been chosen for escrow, and are already profiting considerably on the escrow itself.
Learning about this automatically puts them last on the list for consideration. If the buyer/seller want their deal private, Sedo should honor that without gouging for more. Disappointed to hear this.
As Larry Fischer points out, Sedo are just doing the escrow. They didn’t put the deal together.
Lets not confuse SEDO’s role in the marketplace. They are a service provider and one with a business plan for making money.
SEDO does not owe any domainer anything and should be entitled to charge as much as they want for additional services like this.
Larry said “Escrow arrangements should be considered private” and this is very true however in my 12 years in this business I have yet to run into anyone who wanted to use SEDO escrow services unless I found the name on SEDO.
With that said if SEDO is letting a domain owner use thier services – for sale landing page, listing etc — to sell a domain they have every right to publish the efforts of thier work. Many domainers dont get this element but SEDO has spent millions advertising, building a brand and creating an effective platform for domainers to buy and sell domains and without even what seems simple .. hey man, its only a landing page … it is still thier business model and by choosing them Andrew said it best
“You’re basically paying for them to reduce their media buzz”
Thats a big thing for auction companies to list what they sold if they are in the business of selling domains and why should they not charge a fee afterall sales is what helps them – if they can’t promote the sales then its a churn and burn for Commission.
Anyone that knows me knows I’m not a fan of SEDO by any means and still find it amazing how many domainers opt for thier long and lengthy and convulated database to list names but in this case I think they have every right to do so – even though it feels unfair to some people.
On the flipside, I love Moniker but last year realized the same thing Elliot posted about here.
Probablem was that unlike SEDO where more people opt to use Moniker escrow without having thier sales team do anything to put the deal together – ie. you bring the deal to them and simply ask for escrow services – well, they automatically report to DNJournal.
This is not right and one of the few instances where I find myself supporting SEDO over Moniker.
In short, you use SEDO’s landing page / services, they can charge what they want.
You bring a deal to an escrow service to simply handle the transactaion where the company played no role in the sale of the domain .. then it should be kept private as its not thier data to release and a lawsuit waiting to happen.
I am not sure if Sedo charges for privacy when only using their escrow services. I do know they will report them if you don’t ask (as I found out when I sold Mortgaged.com and the buyer asked to use Sedo since he had funds in his account there already http://www.dnjournal.com/archive/domainsales/2006/domainsales05_23_06.htm )
Hey – its your article .. maybe you should find the answer to that question 🙂
Question has been asked and I will post the answer once I receive it. IMO, it’s annoying either way.
“You know, when you sell a home or physical plant, the price is a matter of public record, and is published in the local newspaper and registered at city hall or country offices for anyone to research.”
Alan’s correct. Though few know how to do it, here in good ol’ CA (and I suspect in most if not all other US states), it’s actually easy to keep the sales price private … and that’s what the wise buyers and sellers like my clients (and I) do on all of their deals; whether as a buyer or as a seller.
And Elliot’s correct about the huge opportunity the imperfect market that is domains presents to everyone.
Compare it to stocks … where everyone knows the prices often down to the minute. Where’s the deal? How does one buy below market? Day trading, you say? Well; over 70% of day traders lose money … and are time slaves to the hours the market/s is/are open.
Even a market like residential real estate; which is somewhere between stocks and domains in this perfect/imperfect market regard; it’s extremely difficult to flip houses found in the MLS.
Everyone has the same access, and comps are–generally speaking–everywhere.
Which is why the real deals are–again for the most part–found with foreclosures, for-sale-by-owners, and unlisted properties.
Everyone should be thankful for and embrace imperfect markets.
They are our greatest opportunities.
its just another way of making easy money by sedo by ripping customers
If you specifically ask Sedo not to publish the transaction, they should honor that. Charging 2.5% is a petty act and strictly pure profit for them.
One transaction (or 100) will not effect Sedo’s brand image. Excluding 7-8 figure transaction. (Vodka, Poker)
NameMedia discloses sales transactions but if you ask them not to, I believe they honor it.
The biggest oversight is domainers forget to request the transaction not be published.
It is also the novice enduser that DOES NOT KNOW to ask for NDA.
If a lawyer is involved in the transaction, NDA is a standard practice.
If I sell a company to Elliot, it is no ones business but ours. We are not publicly traded companies. And, if a business broker was involved and you ask him not to disclose the information, he is ethically obligated to honor your request.
In summary –
“if you don’t ask, you don’t get.”
Agreed. When I first used escrow services at domain companies, I didn’t think I needed to ask for privacy since the companies were only handling escrow and weren’t the brokers who actually made the sale. I know more than a couple of people who were upset when their “private” sales became public via this channel.
Whenever I do business with BuyDomains/NameMedia, my account rep automatically emails me to say, “I’ll request privacy.” They report sales, but she knows that I like to keep my purchases quiet.
I do understand why they want to report sales, but I think it’s funky to claim a sale took place on their platform when they just handled the escrow for it.
Excellent article Elliot. Escrow.com are a true domain escrow service, they provide complete privacy, you do not have to opt in. There are many who have completely stopped using SEDO for the reasons you mention above even before the 2% privacy hike.
Some good points raised. In most markets you have reported deal and offline deals. Privacy is important at some levels, it’s also very hard to enforce even with ndas if the trust isn’t there.
I came from banking where our word was our bond with our clients, and it’s that reputation for looking after customers, doing what’s best for them, that see us all through.
Although I have not yet studied the specifics of Sedo’s recently imposed 2.5% transaction privacy option, at face value, this practice is improper, bordering on obscene, and wholly subverts the essential fiduciary responsibility of professional sales brokerage.
In most business transactions — save those recorded in public record — core principles and practices of good business dictate that the parties honor mutual confidentiality and withhold related information from non-participating third parties. Where honor and trust are not sufficient, lawyers reinforce this expectation by imposing NDA’s which set forth harsh consequences for such foolish indiscretions.
For seven years, my firm has specialized exclusively in brokering discreet sales of six and seven-figure domain equities to senior corporate decision-makers. In all but one sale, both buyer and seller opted for strict confidentiality. And rightly so, because their business is nobody else’s business — least of all domain sale voyeurs, gadflies and curmudgeons, who make public sport of editorially ooing, ahhing and Monday morning-quarterbacking noteworthy domain sales.
When a curious CFO Googles-up a domain name, he’s not likely to respond well to disparaging commentary about his company overpaying for its new domain investment. Nor are stakeholders, from whom this allocation might otherwise have been discreetly washed in a marketing budget, rather than line-itemed, of necessity, in the next quarterly report. Nor are those in the senior decision-making chain, who debated and likely anguished over the costly acquisition, and whose judgment is now being brought into question — publicly! — by transaction voyeurs who have no stake in the deal, the domain’s strategic virtue or the long-term outcome. Consequently, executive jobs are put at risk, particularly in a harsh economy, where HR routinely becomes the Department of Scapegoating. And the company’s stuffy, Madison Avenue advertising agency, which emphatically recommended against buying the domain, albeit for inherently selfish reasons? Well, the Capital Hill politics of agency business breeds uncomfortable “I told you so’s.” So too, internally, where corporate ambition routinely exploits the injured.
Of course, publication of domain transactions might also produce favorable commentary. But that, too, is unwelcome, for an entirely other set of reasons. We can start with pleadings filed by the seller’s wife’s divorce attorney, who claims this heretofore unknown asset as community property and stages a costly and embarrassing legal assault against both seller and buyer.
Y’kinda gettin’ my drift here?
These are but a handful of excerpts from my “Book of Shut-Up and Move On,” particularly when trading in high-value domain names. Until such time, if ever, that domain transactions are required to be recorded in public record, sales conducted between private parties and companies are nobody’s business but their own. And if not legally bound to confidentiality, professional brokers are MORALLY OBLIGATED to respect the privacy of the parties and honor their fiduciary responsibilities TO the parties. At no additional charge!
There is no wiggle room. Imposing a tax on fiduciary responsibility stinks of hush money … “Pay me this or I’ll tell your _______ this.” And there’s not a TOS on the planet that can legitimize this freshly minted assault on fiduciary privacy or mask its distinctive stench.
I think privacy is more or less impossible in today’s world anyway or should I say very expensive.
@Scott said, “domain sale voyeurs, gadflies and curmudgeons, who make public sport of editorially ooing, ahhing and Monday morning-quarterbacking noteworthy domain sales.” Yeah, but losing that ability will wreck our fun! Seriously, thanx for nice post which is an article in itself. Well said! You covered points that don’t occur to the novice, but now I have a great understanding of the importance of confidentiality!
On a personal basis, I would prefer to have sites I guy kept private.
Please don’t compare real-estate laws to domain laws for public access information. They are different things, as you know.
If I buy a site for $200, develop it and sell it for $5,000, I want to keep that information private. The more information you can keep private in this industry, for the sake of your business, the better off you are. I think this industry doesn’t need more exposure for the values of what people paid for sites, but instead needs better leaders.
I agree that if a deal is handled through Sedo, 2.5% is excessive to charge for keeping the deal private.
However, I am also of the thought that public knowledge and transparency would take this business / industry to knew heights.
There are far more sales happening at below market prices than at market or above market, and higher prices is better for all of us.
Higher prices come from good comps.
@Scott – Excellent, top notch post. Readers interested in this topic really need to go back and absorb your comments.
I’m with MM; and thanks Scott.
Frankly and without hyperbole, one of the most important and worthwhile industry postings I’ve ever read.
Though I fully appreciate folks like Rick S. and others who are and have been willing to share their high-priced sales.
Especially for startups and small, private-owned companies; depending on their individual situations. market(s), etc of course; revealing how much they paid for a high(er)-value domain can be a real jump-start/ boost to their business due to all the free press/PR they receive for doing so.
If your stock broker assessed you an optional 2.5% surcharge to keep your buy/sell transactions private, the Securities and Exchange Commission would yank his/her license. If your attorney pledged to publicly release information about your case unless you paid an optional 2.5% privacy surcharge, he/she would likely be disbarred for an egregious violation of the Bar’s Canons of Professional Ethics. If your bank imposed an optional 2.5% surcharge to ensure that your financial transactions and daily account balance were held in confidence, they’d be sanctioned to the max by federal regulators.
In each of these unlikely, but similarly patterned breaches of fiduciary responsibility, the offending trustee would suffer the harshest of consequences for even attempting to exploit and profit from your privacy and privileged information.
So too, professional buyer agents and escrow agents are held to canons and codes of professional conduct which vigorously protect client confidentiality and strictly prohibit the improper exploitation of and profiteering from privileged client information. In some instances, certain transactional data is filed in the public domain as a matter of legal record. However, in this discussion, brokered domain name sales or escrow closings are private transactions, not subject to public view or examination unless disclosed under subpoena or court order.
“When a fiduciary duty is imposed, equity requires a stricter standard of behavior than the comparable tortious duty of care at common law. It is said the fiduciary has a duty not to be in a situation where personal interests and fiduciary duty conflict, a duty not to be in a situation where fiduciary duty conflicts with another fiduciary duty, and a duty not to profit from fiduciary position without express knowledge and consent. A fiduciary cannot have a conflict of interest . . . the fiduciary has a duty not to be in a situation where personal interests and fiduciary duty conflict, a duty not to be in a situation where his fiduciary duty conflicts with another fiduciary duty, and a duty not to profit from his fiduciary position without express knowledge and consent. A fiduciary cannot have a conflict of interest.”1
By any standard or definition, Sedo serves as both buyer agent and escrow agent, respectively, in domain name transactions and is paid a fair fee for its professional services by the seller, buyer or both parties. Accordingly, Sedo should be held to applicable conventions which strictly prohibit conflicts of interest, beaches of client confidentiality, and the exploitation and profiteering of information otherwise required to be held confidential.
Of course, I fully recognize that Sedo’s self-serving public release of domain sales data also serves to escalate domain name resale values — of which I, too, am a beneficiary. But although the global domain community’s tacit approval of this practice is manifest in its never-ending lust for market data, it still doesn’t reconstitute right and wrong to make this proper conduct. Fiduciary responsibility binds the trustee to confidentiality and provides that transactional data ONLY be released with the explicit consent of BOTH parties to a client domain sale and/or escrow service agreement.
Certainly, if parties to a domain sale and/or escrow service bend to a TOS agreement in which they grant Sedo the right to publish transaction information which would otherwise be held in confidence, then Sedo has properly disclosed their policy and is well within its rights to act upon it.
However, when Sedo then begins SELLING CLIENT CONFIDENTIALITY back to its clients as a service or commodity, improper corporate profiteering and tactical conflicts of interest violently collide with Sedo’s fiduciary obligations as both seller agent and escrow agent. This practice is unconscionable and wantonly breaches reasonable conventions which professional buyer agents and escrow agents know – instinctively — they are expected to uphold. There is no blur in these lines of propriety. This cleverly crafted gambit effectively holds, then restores, client confidentiality for ransom.
As an earnest broker who adheres to a higher standard of professional conduct, I am deeply disturbed that a respected domain industry pacesetter like Sedo is now conducting its business outside the lines of conventional propriety, with barely a whimper of visible objection by the domain community at-large. From my own recent inquiries, most with whom I’ve communicated appear to be unaware of this abusive practice. Kudos to Elliot Silver for bringing it to public light. I hope the global discussion will not end with this thread.
Those who know me know I relish a low profile in the domain industry, particularly in online forums. It’s too easy to be misunderstood, misinterpreted or misjudged. However, in the absence of a regulatory authority which might otherwise enforce conventions for domain name sales agents and escrow services, the market must speak clearly, emphatically and resolutely to Sedo that honoring fiduciary responsibility is an obligation — NOT a license to exploit privileged information and extract a “hush tax” to unfairly profit from what appears to be a deliberate, tactical conflict of interest.
To those of you who share my outrage, I urge you to bite the bullet, demand better and BOYCOTT SEDO, until such time as Sedo ceases marketing client confidentiality as a for-profit commodity and begins respecting the global conventions of fiduciary responsibility.
I always use Escrow .Com – which ends any privacy discussion. I have never sold or bought names using Escrow and then finding that they went public.
I am unclear why seasoned domainers dont just stick with Escrow.Com.
Ignoring the basic issue of privacy for the moment, the 2.5% “fee” strikes me as pretty darn usurious for simply keeping your mouth shut about something. At best it should be a flat fee in the $x to $xx range.
In fact, it just sounds a lot like what they used to call “protection money” — though I guess some might consider it extortion or blackmail.
Thanks for the information, Elliot.
I wonder what some of my clients would say if I told them they needed to pay an extra 2.5% for me not to report their purchases to DNJournal. 🙂
I agree 100% with this comment:
“Although I have not yet studied the specifics of Sedo’s recently imposed 2.5% transaction privacy option, at face value, this practice is improper, bordering on obscene, and wholly subverts the essential fiduciary responsibility of professional sales brokerage.”
Recently Sedo did a great job of selling a domain for me. I almost fell off my chair when they told me they would charge me to keep the sale private. As a regular buyer/broker of high level names myself, I would never even *conceive* of breaching a client’s privacy never mind charging for it. While I will use Tessa of Sedo again, and the policy is not her fault, I consider it one of the silliest and unprofessional fees/policies ever cooked up. It’s not even worth arguing about it’s so out there.
Simple, don’t use SEDO. I sold a name for mid 5-figures and used Escrow – com, the cost was less than $500.
Sedo should NOT report sales without permission or ask for the 2.5% unless they sold it. 2.5% on top of everything else is insane just to do their job
I just found out that Moniker leaked the sale price and information about a private domain sale. It is now listed on a few websites.
This is completely unacceptable.
Sedo’s 2.5% fee is ridiculous, and Moniker is not disclosing that they are making private transactions public.