Problem With Buying via Domain Broker
There are quite a few exceptional domain name brokers. In fact, I believe there are several who have sold at least eight figures ($10+ million) worth of domain names. I like seeing what domain brokers have for sale, but as a domain investor who often tries to quickly re-sell domain acquisitions, there is an inherent problem with buying a domain name from a broker.
After a domain broker signs an exclusive brokerage agreement for a domain name, he or she likely creates a list of prospective buyers. The list likely includes companies who would want to buy the domain name because it matches their branding or initials, and it also likely includes venture capitalists and angel investors. I would imagine these companies and people are the primary target audience for valuable domain names, with domain investors being a tertiary target audience.
If I am presented a domain name that I like that seems to be listed at a fair price, I really need to think about one question: Why did the well funded companies and financiers pass on this opportunity? If they passed because the domain name was too expensive, it is probably going to be problematic for me to profitably sell the domain name. If they didn’t buy it because it took too long to reach a decision, it may be tough to sell it to them at a good margin since they know what I paid for the domain name. Finally, the company could do what more and more companies have been doing and file a frivolous UDRP, which would cost me quite a bit of money to defend.
The best domain brokers know who to contact at major corporations and smaller angel investment companies. There is likely the same chance that I could contact a prospective buyer as they could contact that same buyer. Suffice it to say, if a domain broker hasn’t sold it to the most obvious buyers, there is probably a reason, and if I buy the domain name, it will likely be a long term hold.
I have bought good domain names via brokers before. Some sellers would prefer a quick deal and end user buyers may take longer to make a decision. Some sellers don’t want the broker to risk TM/legal issues, so they don’t contact companies that might use the broker email as a grounds for legal action. That being said though, there could be a problem buying a domain name from a great domain broker if the goal is to re-sell it quickly.
Reach out to Elliot: Twitter | Google + | Facebook | Email