Sales Reports May Not Tell the Whole Story

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I was chatting with a friend at The Domain Conference, and I congratulated him on a deal that I recently read about. Coyly, he told me that I shouldn’t believe all that I read. After chatting with him for a couple of minutes about it, I think I understood what he meant, although he wouldn’t share any details with me!

The vast majority of domain name sales are all cash. In some instances, in addition to a cash component, a company may give the domain seller additional compensation. Some types of compensation that I can think of off the top of my head include shares in the company, an earn out opportunity (% of sales for example), or some type of stock options. I am sure there are other types of compensation I am not thinking about.

Domain sales platforms and brokers that report transacted sales tend to only report the cash aspect of a deal. How much a buyer pays in cash is more reliable than extrapolating a sales price based on the value of a private company or potential value of shares. In addition, most brokers and brokerages do not participate in the additional compensation since it likely isn’t worth much at the time of the deal. For these reasons (and the fact that most of the additional compensation isn’t as trackable for DN Journal as a wire receipt or Escrow.com receipt), domain sales are generally reported for only the cash value at the time of the sale.

The next time you read about a deal that looks very good for the buyer, perhaps there was more to the deal than the reported cash transaction. There is a decent chance the seller received some sort of additional compensation or will receive additional consideration long after the domain sale closes.

1 COMMENT

    • I know of some people who have had nice sales, so I don’t think that statement can be made universally.

      That said, this article is not about any particular type of domain name but a general article. The domain name that got me thinking about this article was, in fact, a .com.

    • Ok, good to know Elliot.

      I just don’t believe the new G sales though. Why would a person/company pay an upfront cost for .whatever and a premium renewal?

      Especially when you can buy a quality COM/ORG/ccTLD in the aftermarket and just pay regular renewal. How does that make sense?

    • I’ve never had any offers for Blockchain.link anywhere near the reported new G sales. Unsure I’ll ever see offers that high even though I’d consider this a “premium new g”.

      I’m calling your BS Braden.

    • Are you being serious? I’ve purchased thousands of blockchain domain names over the past year, well before the term hit the mainstream media, and I would never consider buying blockchain.link, although I think you’ve emailed me about it. I purchased theblockchain,com as reported a few months back, blockchaintechnology,com and many others. The trick is to buy before the term becomes popular, not jump on the bandwagon by registering the only extension you could find and spam the crap out of it.

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