My business model involves the re-sale of domain names. Oftentimes, I will buy a domain name on a venue like NameJet, and after I won the auction, paid in full for the name, and have it in my possession, I may seek out an end user buyer via resale of the domain name.
This morning, I sent out some emails to end users about a domain name I recently won at auction. A few minutes after my first email went out, I received a reply asking me how much the domain name would cost. After sharing my price, the prospect emailed me back asking why my price was higher than what my “colleague offered a few days ago.”
Since I don’t have any co-workers or employees, and since this was an expired domain name rather than a private auction, I am pretty confident someone did some frontrunning on the domain name. This involves sending out emails asking potential buyers if they are interested in the domain name, and if they work out a price that is higher than the auction price, they will buy and then re-sell the domain name. If not, they won’t bid on the domain name (or won’t win the domain name).
I am pretty sure that selling an asset that is owned by someone else (in this case, probably Network Solutions), without their permission, is illegal. Legalities aside though since that isn’t my field, I am completely sure that this is unethical.
This person had no right to try and sell a domain name owned by another company, and he or she has no control over whether or not they can follow through with a deal. If they agree to sell a particular domain name for $5,000 and the auction ends at $10,000, I assume they aren’t going to be the winning bidder and take a loss on the sale. They will probably disappear into thin air with their made up throw away email address.
As far as I am concerned, frontrunning is a scumbag move made by someone who doesn’t have the courage (or quite possibly the financial means) to invest in a domain name without having a buyer lined up.
Well it seems a bunch of my domains which are NOT for sale seem to be showing on NOKTA DOMAINS via “make offer”. This has been going on for a while and im not the only one as I have read this on other blogs and forums.So when somone googles my domain name, this offer page shows up on page 1 of google. this is not good. Can this cause UDRP issues?
I believe Nokta has partnerships with other platforms and they show other listings. Have you contacted Nokta to see what’s up? Have you searched other platforms like Sedo or Afternic to see if the names are listed there, too? Perhaps a former owner listed them, or someone else listed them inadvertently.
I think your first step should be to email someone from Nokta to ask why your names are showing up.
@PissedDomainer, I have been through this process recently. NOKTA tried to sell me a domain name which I OWN. The domain was never listed at NOKTA but it somehow showed up in Google SERPS when I googled it. So I went ahead and inquire about the price which they quoted promptly and I very high price. (Love to sell this domain at NOKTA quoted price). Next day, received email from an account rep of major domain trading platform that someone is interested in purchasing the domain name. I quoted a much lower price to them. Again NOKTA came back and said ok, we can lower the price which still is higher than my quoted price. We went back and forth and finally agreed on a price which is same as my quoted price.
I find it very disturbing as I am the seller of the domain on one platform and buyer of the same name on another. Even if they have some sort of relationship they should have quoted the right price.
There’s a bunch of people doing this, surprised you haven’t received any emails like this. Really annoying, and they’ll email you at least once a day until the auction ends. I had to set up Gmail filters to stop it.
Although it is hard to feel bad for NameJet, when they have partnerships with registrars that allow a domain to not even expire and be contested in the drops. They sell things that don’t belong to them every day from places like eNom.
Ah well, still the Wild West.
“They sell things that don’t belong to them every day from places like eNom.”
They have permission (and a contract) to sell those names, no? It’s not like they are listing names at auction without permission from the owners.
Don’t they? They start the bidding 30 days before the domain enters pending delete. If they start the auction at a point where the owner can still redeem the domain, they’re selling something that belongs to someone else without their knowledge.
Even just with standard domains that will actually drop, they take bids before they own the domain, and only bother to try to catch it once someone bids. Trying to sell something they don’t own yet.
Not defending the douchebags you’re talking about in your post, just saying what NJ does isn’t much different.
Just because the registrars put things in their terms that aren’t in the spirit of ICANN rules doesn’t make it right.
I agree with Michael. NJ & other auction houses are in the clear because of their partnerships but I don’t see how it is ethical for registrars to ‘prospect’ for another buyer when I can still renew my domain name. (Often, auctions I bid on are renewed by the current owner after I have won & paid for my bid). And if they do manage to secure a winning bid for a name that can still be renewed, how about offering a percentage of that to the current owner so that he lets it go & lets the registrar/auction house make money.
I assume domain registrants agree to allow this via acceptance of the registrar’s terms of service agreement.
There are several hundreds of my domains for sale at SEDO without my consent.
Sometimes buyers make the offer there and the ghost seller simply doesn’t reply or replies with a moon price and this makes me to loose the sale opportunity.
What should I do? To inform SEDO about what domains I am acquiring everyday? I don’t want to share my portfolio with them!
By the way, I guess that I am not the only one here in this situation … Anybody else enjoys of fake SEDO listings?
If you don’t email Sedo to ask them to remove the names, how do you expect them to come down? When I see a name that I own listed at Sedo (that I didn’t list), I email them and ask them to remove the name. I am pretty sure they don’t keep any type of dossier on names you ask them to remove.
If a listing was once legitimate (ie former owner listed it), that’s not unscrupulous.
Also keep in mind that if you’re buying domains on the drop there’s a good chance the name has been listed before at Sedo, Afternic, Aftermarket.com etc. It can be onerous to keep large portfolios up to date on these platforms, they all have severe shortcomings in their managment tools.One of the first things I try to do with a new domain is search domaintools and see if it says the domain is for sale anywhere and if so contact the marketplace to either have it removed or added to my account by verifying ownership. A lot of times these listings are less likely fraud and more just sloppiness.
I do the same thing when I get a name.
ES, how do you know if the prospect wasn’t making up the story as a bargaining ploy? Did he forward you the original offer from the unscrupulous fake owner? I just don’t take any potential buyer’s word. They will write anything to get a better price.
Yes, he was kind enough to share it with me a little while ago.
The other issue is that I could look like I am trying to pull some sort of scam since the front runner’s email offered it for a price that I couldn’t offer due to the auction sale price.
How do you handle the 60 day hold?
There’s no hold at Network Solutions.
It was an auction win, not a new registration.
Even if it was a new registration or pending delete, Moniker.com escrow service is able to handle the transfer inside the registrar company, which is allowed in most registrars.
Where have you been the past 2 years???
This has been going on for a while, there are a few bad apples who need to be shamed.
I’ve know about it happening, but I don’t recall it impacting a potential sale of mine before.
“Shamed” for what?
This whole ecosystem is a gigantic scheme of trying to cut in front of the next guy, from the registrars who profit in conjunction with the ‘auction houses’, to the people who email owners of dropping names.
If you’re sitting there with your empty plate out hoping to be served seconds, you’re a dumb asshole. If you think there’s some implied ‘integrity’ in this game, you’re delusional.
When you’re playing a game that has essentially no regulatory framework, the creative and motivated people are the ones who win. The idiots who sit around playing by their own imaginary set of ‘rules’ are left to lament the ‘unfairness’ of those who cut in line, but there’s no teacher for them to go crying to.
Welcome to the big-boy world. If you want something regulated, go trade equities or bonds. The difference is, that requires actual intellectual horsepower and if you think this is hard, you won’t make your first day there.
I’m all to legal deal making but I don’t think this is legit.
@ Elliot said
You’re a person who believes someone would hand register the mis-spell of weinergate.com exactly a year to the date of the infamous tweet, believing in the powers-that-be that they won’t back-date the domain, so I guess it would never occur to you that the Registrars themselves, such as Network Solutions, might not send out a schill to sell a domain not yet out of its possession, but I think that is what could have happened. Lots of things happening behind the scenes that we don’t know about. You’re so powerful, I wish you would entertain the possibility of involvement of the actual Registrar. Why not? Registrars seem to be getting into the domain space on every level.
It could be the way you say, of course.
What about names which switch hands, but stay up for auction at the major auction houses, such as Afternic? Is this so different?
Thanx for highlighting your experience. It’s useful to the domain community you shared this. I appreciate the comments that follow, as well – thanx!
Did you ask the person you contacted to forward the original email so you could see who it was?
Throw away Gmail account.
I just have one question: how does a scammer has access to your (precious )list of usual clients?
It wasn’t a client. It was a prospect I emailed based on his current domain name.
Before today I had never contacted that person.
To make it more clear, I’ll give you an illustration.
Let’s say you bought DogWalkers.com at auction. You then do some research and see a website on DogWalker.com, so you decide to offer DogWalkers.com to me, the owner of DogWalker.com.
How would you feel if I said, “thanks, but why is the price more expensive now than when your colleague offered to sell it to me last week?”
That’s basically what happened.
Elliot, I get them on a daily basis. I actually appreciate these people because they sometimes bring me domain names I didn’t know was expiring. When I see them, I know they are up for renewal or at auction. People do this in real life all the time. They find a deal, try to market it and then once they have a deal, they flip it. It happens. You’re just pissed because you think it cost you a deal.
I think you may be confused. The emails I am writing about are sent when the domain name is already in auction, so unless you were previously a bidder, you cannot participate.
I think you’re talking about emails sent to people that involve expired domain names that are available to register.
Howcome you don’t suspect the Registrar?
Wouldn’t several bids on a domain at auction be a flag that it is an in-demand domain, and worth seeking an end user before the auction ends?
Then it can be pulled from auction.
Many disappointed winning bidders have had to deal with refunds instead of the domain that was won, because of some change of mind on the Registrar side.
If the domain registrar was going to do something like this, it wouldn’t make sense for them to do it when the domain name was already in a private auction.
It didn’t cost me a deal. The guy actually made an offer that was more than I paid, but not enough for me to close a deal on it. I also explained that the offer was made by someone who had no right to offer it.
I am annoyed that someone was trying to sell a domain name they shouldn’t have been selling though, and I assume if you paid four figures for a name at auction you would feel the same way.
How would you like it if someone found some of your names and pitched them to end-users at ridiculously low prices without your permission? It would probably irritate you as it would irritate anyone who wants to sell domain names. This is a bit different obviously but there are similarities.
Same thing happened to me 2 months ago on a domain name.
People fishing out the market to determine whether or not they want to engage in the auction.
Awful and wish Namejet would have been more open to helping root out the issue. I can’t imagine there are many people like this.
When I brought the issue to Namejet, they basically said, ‘Too bad. Not our problem.’
Maybe you’d have better luck…?
> I think you’re talking about emails sent
> to people that involve expired domain
> names that are available to register.
No Elliot, he is speaking about domains
that *ARE* going through an auction
process when the eMail is received.
I am constantly getting offers to ‘secure
domains that will shortly be available.’
Those of us with static/long-established
portfolios are possibly more likely to get
these offers than those with high
turnover/transitory portfolios (you ?).
Like previous posters, I also have used
some offers as alerts to find out where
the domain(s) were selling, and sometimes
buy them directly from the auction.
How would you bid on the auction if you didn’t know about it before you received the email?
With NameJet, you cannot bid in the auction unless you previously backordered it.
Perhaps you’re talking about another auction house? Go Daddy auctions maybe?
Don’t do front running, do optioning:
Not only in domain name business but such things do happen in other businesses also. When it comes to domain name business the question is how to identify such pre-intended bids?
It also reminds me about your post “Domain Auction Prediction Algorithm.” But here, in this case the bidder is unscrupulously bidding according to the end user pre-deal.
It’s unethical because the other bidder who desperately want to to have that name may end up paying more in comparison to that end user who has agreed to pay a certain amount for that name to that particular bidder.
I am aware about this but personally I think you shouldn’t share about this issue here because if 10 thousands of eyes see this post, and 2% say “this is a good idea. Why i never thought about this” and apply this method, there will be 200 additional scumbag just been produced.
Btw, can you share your email template to enduser that converts well? 🙂
I did share it.
Personally, I think the email is far less important than the quality of the domain name. I don’t think having a great email rather than a poor email is going to make much of a difference if the domain name isn’t good. For whatever reason, some people think the email is the key to success, and I disagree.
There is nothing unethical about having a buyer in place prior to bidding in an active auction. Most end users will not be aware of the auction anyway. It happens in real estate, fine art and antiques all the time. As for the fellow with the sedo listings being hijacked, that is another story. Since sedo verifies the ownership of every domain you submit, i’m not even sure how thats possible right now.
I thnk there is something wrong with telling people you own and are selling a domain name that you don’t own.
Some of my .CO’s are listed for sale at Many.co (I guess its a korean website). Not by me. I was upset at first (for a moment I even thought the domain’d have been stolen from me somehow) but now I don’t care because what’s the possible harm?
Yes it’s unethical so it’s better to bid on a domain that has no obvious end-users or you are farked to bid higher to win over the end-user’s ‘pre-bid’ frontrunner got for it.
in this case the end-user contacts you about the name and then wonders why the heck the price is so much higher LOL
I see the point you are trying to make, but judging by the frequency that this happens on names I won at NameJet, I don’t believe it is all that widespread.
I think this is a bit naive Elliot. People in the domaining world post about contacting owners when their name is in pre-release to see if they will renew and do a deal direct so it doesn’t go to auction.
Here people are positioning themselves in an auction and then trying to get a deal done prior to auction close so they can secure the name.
Anon’s post above was spot on. I personally don’t like it but people need to wake up.
I believe that is different, because the former owner can still renew it and sell it. In this situation, the person making the offer to potential buyers has no rights whatsoever to the domain name at the time the offer is being made. He is trying to sell something that is owned by someone else without the owner’s permission.
Elliot and all, thanks for shedding light on whats happening in this part of the IM industry.
I’m new to all this so there definitely has been an eye-opener for me, but I think as has been mentioned elsewhere on this forum, what’s happening in domain trading/flipping is no different from whats out there in real life or offline businesses:
There are thieves, scammers, opportunists, and those that are plain envious of one’s achievement and would do anything to bring you down rather than learn from you.
Banks and other multi-million firms are constantly having to battle with hackers by paying ridiculous amounts just to keep secure.
This is the world we live in. And these challenges and experiences can at times be useful as it alerts us as to whats going on and what steps to take in order to avoid or minimise…
Domain registrars themselves could be doing behind-the-scenes stuff that traders on this side of the wall don’t have a clue about, just because they have more power and inside secrets…Who knows?
We all must learn how to play the game by arming ourselves with the best tools and advice we can find, to keep our successes afloat.
Thanks for sharing.
You are such a fool for sharing this. In short you just brought end-users into these auction. Now there will be 10 x+ for every one doing this now. But you did you post and got your blog traffic and got to cry about it to the public..
I actually blogged about this same thing a year ago and it didn’t have that type of impact, so I don’t expect it would this time either.
It’s not a secret that this happens obviously but I think it’s an unethical practice and people doing it should know it’s not a legitimate business practice.
This is an old real estate trick from the boom days. You locate a piece of land / property not owned by you but you know the owner will sell – go around lasting known buyers “hey I have this piece of land near the lake in xyz” then you do a simultaneous purchase and sale on the same day or a double closing. No different.
The difference is that the piece of land in your example can be bought for a specific price. With an auction, the person doing the emailing will not necessarily win the auction nor does he know the price. How can a person offer something for $2000 when it’s very possible that it will sell at auction for $5000? It’s unethical from the perspective of the potential buyers, too, since they might agree to buy a domain name but the. Not have the opportunity because the “seller” couldn’t secure it.
I’m not sure what you referred to is an acceptable business practice either. Just because people do it doesn’t make it ethical or legit.
I am new to the domain marketing world. For a newbie like me what do you suggest buying at this point? Let’s say for a budget of $5k. lll.com? llll.com?
Thank you for all of your comments. We may not all agree with each other, and it’s good to be able to see all aspects of this.
Elliot, That is why I use my LLC email, which is what is on WHOIS. Ask the inquiry emailer sender if they still have the senders ‘from’ address…I am sure you are correct,it was a throw away email
This is so, so laughable in this context considering that the entire practice of ‘domaining’ is essentially putting yourself between the domain and the end user, arbitraging a knowledge gap between people who obsess over domain names and people who don’t have time for that bullshit because they have to run an actual business.
So, somebody takes a product that they don’t yet own and sells it.
In some fields, it’s called wholesaling.
In others, dropshipping.
In this field, someone does the legwork to find an end-user, generates interest and a price and we’re supposed to cry because ‘it’s not fair’ that the inherently ‘unfair’ domain aftermarket system wasn’t made available to us to practice our inherently ‘unfair’ business model that would make Postel roll over in his fucking grave?
It’s just so absurd to lament over this.
This is a cowboy industry. That attracts some undesirable shitheads, it repels some otherwise decent people. Then there are the ones raised in the cul-de-sac but wander into the Saloon anyway and decry all the hookers and booze.
“Anyone who doesn’t know how dirty the domain name business is just doesn’t know the domain name business” – Michael Arrington, former CEO of Pool.com.
If Apple catches you wholesaling their products without permission a lawsuit would likely follow.
Again, there is a big difference between making investments for resale and selling something you have no rights to sell.
Yes there is lots of shadiness in this business and this is one example. Just because people do it doesn’t make it ethical or legal.
The more people brush it off as business as usual the more people will think it is acceptable.
What happened to iPhoneTester.com? It was one of my favorite sites:
where you could enter a url to test the mobile view of that website.
I reached out to the registrant, but he didn’t respond, as the site is down, and wasn’t renewed before the expirationdate of 2013-06-29 . . .
Anyhoo, if you could catch the perpretator, @ Elliot, maybe you have grounds to claim damages for defamtion, since he diluted your brand somehow . . .
I wouldn’t have any grounds since I didn’t own it at the time the email was sent.
I totally understand your position in your initial post, Elliot.
You know, sometimes (*definitely not always*) that other party who is attempting to “pre-sell” the domain name that isn’t even theirs is actually a person in so-called “third world” area of the world trying to feed their family. They’re using an unethical and probably illegal means to do so, but if you and your children were literally hungry, hey, any of us *might* do the same thing.
I’m just saying that you never know. Not everyone in the world who does stuff like this is a scumbag. Sometimes people are pressed into these things through desperation. Quite a few of us are lucky, and certainly aren’t hurting for money. However, there are millions (actually, a billion or more) who live very poor, very desperate lives, often through no fault of their own.
But I do understand your thinking. And thanks for making the community aware of this.
If Apple catches you wholesaling their products without permission a lawsuit would likely follow.
Whatever Apple does in the name of brand protection and preserving the integrity of their retail channels is not remotely the same thing as someone preselling an expiring domain.
I suppose it’s fine to call it ‘unethical’ but this business isn’t about doing gods work and if we accept that as ‘unethical’, a large majority of standard domaining practices would be ‘unethical’ as well.
I actually like the fact that someone in this business has a moral compass, wherever it may resolve to. It’s refreshing in this cesspool industry of dishonesty and self-service.
“preselling an expiring domain”
I am looking at it as selling a domain name owned by a domain registrar while claiming to own that domain name. It’s not an unregistered domain name. Whether or not you agree with the practice of taking control of domain names that are not renewed, the domain name is owned by the domain registrar. It isn’t an unregistered domain name or a domain name in limbo. It is rightfully (whether you agree or not) owned by another entity and claimed to be owned by the seller.
One, Is what happened any different than if I were to hire a broker/agent to attempt to obtain a domain I was interested in? It seems to me to be the same thing that happened to you… and I would not be doing anything unethical.
Second, wrong information happens regularly. Just yesterday, I received an offer from Sedo for a domain that I had parked at Sedo. The only problem was that I had let the domain laps and did not renew it… now someone else owns it… but, I still received the offer.
Sorry, I don’t see how point one is related at all.
Thia can be happen because the situation I got this week. I bought an expired domain from a registrar, I have won it from the auction, I have paid it and the domain has shown in my account (yes it is said order has been paid, processing). And it is said that at the registrant rule that after 7 days auction closed, the last owner has no right to renew the domain, so I immediately put it in a sale by pushing between account in the same registrar. Now the order is cancelled because 3 days after I paid, the last owner paid for a renewal. I got my money back but in my account balance, so it will be only available to purchase another expiring domain. So the registrant is the one have a benefit from the situation
sedo has my domain listed for $199 it is either that one or pornhost.me hostporn.me one of them and i have not gotten a response from sedo at all thusfar. i am very angry that someone is trying to sell the domain. same happened with lemonparty.org was listed for sale at 250 on godaddy auctions. there needs to be a shakeup of this type of thing.
I totally understand your position in your initial post, Elliot. 🙂