Difficult for Me to Buy via Broker

There are quite a few exceptional domain brokers who work diligently on behalf of their clients. There are many great reasons why a person should use a domain broker to sell a domain name. As someone who buys domain names regularly, I find it difficult to buy domain names from brokers though.

The majority of excellent domain brokers I know spend a great deal of time contacting prospective end user buyers. They call on the phone, they send emails, they meet in person…etc. When they sense a prospective buyer is preparing to make an offer, they do whatever it takes to answer prospects questions and ensure the prospect understands why the domain name will add value. In short, the best brokers do what it takes to sell their clients’ domain names for as much money as possible.

As someone who invests in domain names, these excellent brokers make it tough to get good deals.  

The greatest issue for me is that a great broker will contact everyone that could have an interest in the domain name. He or she will use all of their expertise to find buyers, and they contact anyone that is qualified who might even have a slight interest in the domain name. What makes a broker great is their ability to make connections and close a deal. If all of these people have been contacted, who am I going to sell the domain name to when I am ready to sell?

Another major issue is that if I agree to a deal, it likely means other people who regularly buy domain names likely passed on the same deal. Yes, this happens in auctions every day, but when I spend 4 or 5 figures on a domain name that my peers passed on, it makes me wonder if I am missing something.

A final issue that I see is that a great broker may set their client’s expectations too high. They may tell a client they believe they can sell a name for $100k. When an end user doesn’t materialize, a domain name buyer may offer $10-20k for that name. It’s hard for a domain broker to convince a client to sell a name for 80% less than he originally thought he could get. Unless there are urgent cash needs, the domain owner will likely hang on to the name.

Of course, there are exceptions to this. Some brokers have clients who value a quick close rather than making the most money. Knowing the business, I can make a purchase decision and execute  a deal within minutes. Brokers know there are people in the domain business who agree to good deals in a matter of minutes and can fund escrow shortly thereafter. There is less hand holding, and they can almost be certain the deal won’t have complications.

I have bought quite a few domain names via broker, but this channel is probably the most abundant channel I barely use to buy domain names. I like working with domain brokers, and it’s a tribute to their

Elliot Silver
Elliot Silver
About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has closed eight figures in deals. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest. Reach out to Elliot: Twitter | Facebook | LinkedIn
  1. Brokers bullshit, if they have a name they say is worth millions, and are selling it for $50K, I always tell them best you buy it yourself.

    I have seen it many times, we have many buyers lined up etc… 3 days later price reduction, big ticket names are not an easy sell as most would want you to believe.

  2. Brokers are no different than real estate agents. No broker should take on a domain that can be sold for under 25k. It would be like trying to sell a travel trailer, who wants to do that? You just can’t make any money unless you charge 50% commission. No incentive exists to sell a domain for 5k at 15% commission.

    Now if we are talking 100k or above then brokers need to take a percentage of whatever they can get above that 100k amount. Everyone seems to charge 10-20% of 100k so in reality it just makes the brokers lazy. If a broker ends up selling at 200k and the owner was willing to take 100k, the owner ends up making 150k and broker makes 50k, everyone wins.

    I have tested these brokers and not all of them work the same way but they will offer say 2k for your domain then turn it themselves for 10k. You can’t blame them because they have to make money. They can’t make money doing 15% on 10k name.

    Best thing to do. Be smart and buy names for 1k-2k for yourself and sell for 8-10k. Don’t email and pick up the phone and start calling yourself. Email, fax and wholesale brokers won’t get you anywhere. 80% of your emails are not making it so why bother. Faxing is like 1990s and unprofessional.

    • Here is the thing to make 15% without having to attend a physical meeting, or even have an office on a $10K sale with say 20 hours worth of work involved is not to shabby.

      Brokers have no downside, not their asset, if they get a malibu beach house type domain, the commission is pure gravy, much like 2 and 3 Letter .coms, and numerics were during the past year.

    • so i’m stupid but when time finally melts the illusion of the ardent domain investor will there actually be value in a random 3 letter domain that has nothing going for it other than 3 characters.

    • Quick thought about 3 ltr value –
      Many items hold high values even though they have very little intrinsic(? underlying) value.
      Gold – jewelry, circuit boards, teeth, etc.
      Sapphires – jewelry.
      Paper currency – In many countries, it is just a promissory note.
      Works of art – canvas with paint on it.

  3. what do i know but besides domain investors basically the average domain is worth $10 to $500. if you are lucky. there is always a large corp who will pay a little for something that they perceive as need but the reality is that if time is not on your side re end users then you better hope that some dumb as shit pseudo investor thinks your name doesn’t suck.

    domain value from an end user perspective is still at least 10 years off

  4. Also keep in mind we brokers aren’t conventional workers in the sense that we don’t do a 9 to 5, I can’t shut off the phone because I’m taking to buyers in Australia and America so much to our wives dismay we are almost always on call to make that sale as buyers are fickle. But of course you could say the same of many entrepreneurs..

  5. Is there any aggregate analysis available listing “these excellent brokers”/ companies ?
    I expected professional brokers to justify the asking price by past sales in the category or in the case of keywords [eg insurance]successful existing lead generation business models. I have been asked what I paid for it, its not an aged domain (VR prefix) none of which relevant. When selling I expected to work with broker and for the brokers database to justify the asset price.

    “good deals in a matter of minutes” still have to be justified [used cars have millage history] Yes I will buy & sell domain assets after refurbishing the frame through a professional broker. Who do you recommend ? your head is already above the parapet Who do you recommend ?

  6. Well,

    Brokers will most likely sell your domain under the market price because they want cash flow.

    I have been receiving offers between $21K and $30K from many investors for my best domain and a broker told me he could help me sell it for $15K….

    Yeah…

    • Xavier,
      The broker did give you an approx $15k figure that meant you could then discuss justifying. I found Sedo great to buy from as they seem to act for Sedo.

  7. Xavier,

    Brokers aren’t the end all say all of pricing, that’s why I always hesitate in being the first to give a client a price, this is a market largely driven by perceived value and many times it’s the seller who have an inflated sense of value. I’ve had clients bring names to my attention I had absolutely zero interest working as I didn’t see their redeeming qualities but the client educated ME on the value of that name via email prior leads. I ended up selling the name for six figures. Another point I bought a name for $5k, a friend broker estimated $15k and that same week I sold it for $35k.

    This is a two way street, what you’re looking to achieve is access to that broker’s network of contacts but in the meantime we are humans and not a walking estibot, sometimes the owner has better visibility into the value of a name. Brokers have limited amounts of time and want names we think have a realistic chance of achieving a sale. For me it also depends on whether I’m taking a name on long term or short term but I’ll be up front about that.

    • NameConnect

      “This is a two way street” Agreed.

      “end all say all of pricing” Possibly/probably not but as a professional you should have access to database of current category (house antique) domain asset sales.

      “but I’ll be up front about that” That is all anyone can ask & should expect.

  8. Brokers also find names buyers are looking for. We all don’t have a blog like you that receives thousands of viewers. If you take into account a brokers time to build relationships, find sellers, work the deal, travel costs, follow-up etc. Brokers don’t make a lot of money. Also if not for brokers, many buyers would never have access to the names they seek.

    I deal in bulk short domains but quite often it is much harder to find 100 short domains for a client than one premium. In a sense, you say brokers hurt your business. I say without them, you would not have as many sales in the industry that have set premium prices without them.

    Perhaps you forgot the hard work it took to get your blog and business to what it is today? Personally, I find this article offensive. My broker friends work their butts off every single day. Also there are times, deals fall through after months of work.

    Going to end here since I have smoke coming out of my ears.

    • Did you even read my article because your summary of what I wrote makes no sense if you did.

      The short synopsis is that I don’t regularly buy domain names from brokers because the best brokers have most likely already pitched the names they are brokering to the best end user prospects who would spend the most money on those names. As a result, if I were to buy a domain name via broker, it means that domain name has probably already been shopped around and it would take longer for me to profitably sell it.

      I would also add that I disagree about brokers not making a lot of money. The best brokers make plenty of money selling great domain names.

      Brokering is a tough job and there are quite a few brokers who make a great living because they excel at finding the right buyer.

      Where did I say anything bad about domain brokers? If anything, this article is complementary because I am saying the hard work a broker puts into finding w buyer would make it difficult for me to find someone else if I buy a name from a broker.

    • What does the term broker really mean?

      It means the seller becomes broke and the r is for the person getting Rich 🙂 which is the person who brokers

      Hence the term:

      brokeR

  9. Yes, I read your article. In short, you applaud them on one hand then say “it means that domain name has probably already been shopped around and it would take longer for me to profitably sell it”. That means you also have an issue with them.

    Yes, the BEST brokers do make a nice living. Regardless, this industry is what it is. You are entitled to your opinion but my take away is that you would rather not have to compete or deal with the result of their efforts.

    I don’t know you at all, but saying anyone affect your ability to sell is not fair. Beat them to the punch if you seek to sell.

    • The issue isn’t with brokers obviously. Why would I want to buy a domain name as an investment for $80,000 when a broker likely pitched it to every prospective end user buyer already and they all passed? Who would I be able to sell it to in the near term if all prospects already passed?

      To me, working with a great broker to sell a domain name means that all prospects will be called, emailed, and contacted in other ways to get a deal done. As a buyer, I have to assume all prospects were contacted.

    • When I read this, this article is more of an authors expression. There is not a slightest hint that he is against brokers or anything. To ‘judge’ or hit out at Elliot is a little unfair, perhaps you simply misinterpreted this article.

      Cheers

    • Elliot

      “Where did I say anything bad about domain brokers?” You did not.

      “I can make a purchase decision and execute a deal within minutes.” We all have an agenda and yours was to get your message out.

      My comment was /is to ask all “Who do you recommend ?” Your personal silence is deafening ? I think your blog is good and recommend it. Think the two estate agents I used in the UK were satisfactory (Savills & Faron Sutaria).

      Of the “domain brokers who work diligently on behalf of their clients” you mention. Who Do You Recommend ?

    • “Who do you recommend?”

      I self-broker the majority of my domain names.

      I am not going to harm a friendship or business relationship by choosing one over the others on the list I shared. In addition, there are several people / companies that I have never worked with but only heard good things about, and it would not be fair to overlook them simply because I haven’t worked with them.

    • Elliot.

      OK That is of course your prerogative.

      Not interested in the people/companies you had not worked with. I am sure the ones listed will be aware you normally use A B or C when selling & any that offer the deal when/if buying.

      My own views are these people / companies are professionals that can/do justify the company status on the basis of its personal professional services – Staff – Turnover – Recommendations. I’m not interested in the owners personal portfolio sales. Professional company or an individual who can sell the Koran to Billy Graham I do not care but I will have no hesitation in recommending them.

  10. This is more about is the seller educated. Brokers will enlighten owners to what the market is. If you’re looking for wholesale/re-seller pricing; forced auctions (no reserve), direct buys (or buyer services) and the drops are best picking grounds.

  11. Face it, good domain names don’t need brokers (talking strictly .com here, not the new .crapollas). When the buyer is hot, they go to whois and make an offer. That’s exactly what makes owning them so incredibly cool. Offers can come in 24/7 with no listing broker needed.

    As for buying, the same thing applies, this time it is you which goes to the whois and does a lookup. Buyers/Sellers = 1; Brokers = 0.

    • Lander vs Whois inquiries.

      On a one word .com – 70 via the lander, 2 via the whois in a one month period.

      Granted some spam/confusion via the lander, but illustrates if selling to have a lander stating that its for sale.

  12. Suggestions (6 not many) from 2013 – 2015 on the DNS forum /
    Not to date implemented. Seems like a reasonable incentive to me.

    Brokers Scorecard

    It would be great if you could devise a fair scorecard to measure the brokers effectiveness and results. If a fair system could be incorporated for accountability, I think that would increase the drive put into ALL domain sales, not just the ‘big boy’ names.

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