Pros & Cons of Using a Domain Broker | DomainInvesting.com
Neustar Domain Names

Pros & Cons of Using a Domain Broker

19

There are many advantages of engaging a domain broker to sell one or more of your domain names. Companies like Sedo, Afternic, MediaOptions, and others sell millions of dollars worth of domain names a year, many of which are sold privately with non-disclosure agreements preventing the sales prices from being released.

Like everything, there are also downsides to working with a domain broker. I want to give you some pros and cons to using a domain broker to sell your domain names. Feel free to add any I missed.

Pros of Using a Domain Broker

  • They have experience selling expensive domain names.
  • They know who the biggest buyers in the domain space are and most brokers have an extensive mailing list.
  • Brokers should know the market well, and they can give you an idea of what you can expect for your domain name.
  • Domain brokers will know how to get your domain name in front of the right person/people at a company when selling to end users.
  • You won’t have to worry about negotiations because they will work out a deal on your behalf.

Cons of Using a Domain Broker

  • Commission rate may be high simply for sending an email to client list.
  • No “real” market regulations, so you may never know if they’re 100% working on your behalf when they sell to another domain investor.
  • You may have to give them exclusivity for a period of time, which will prevent you from selling the name elsewhere.
  • If you have a name that’s listed exclusively with a broker and you receive an offer elsewhere, you may have to pay a commission anyway.
  • Broker may not do more than email his client list, and may not reach out to end users on your behalf.
  • If your domain name isn’t as valuable as others under contract, it may not receive as much attention as it should.

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 sold seven figures worth of domain names in the last five years. 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 | Email

Comments (19)

    Adpals

    I have spoken with a broker from Sedo and we never entered a contract, but the day after I spoke with him my traffic spiked for a few days. He told me he would do some research and get back with me, and that was over two months ago.

    I guess what I would like from a potential broker is to at least provide the feedback from their research, and not inviting folks from a list to check out the domain that hasn’t been announced for sale.

    June 14th, 2011 at 1:03 pm

    Domain Broker

    A domain broker takes “emotion” out of the equation. It’s always better to have a 3rd party negotiating on your behalf – both with buying and selling.

    June 14th, 2011 at 4:42 pm

      Elliot Silver

      @ Domain Broker

      Good point and congrats on grossing almost $20m in sales in 2011. You’re on fire.

      June 14th, 2011 at 4:44 pm

    Scott Bannon

    You stuck it down at #5 under Cons, but my experience has been that many ‘Domain Brokers’ are just Domainers who have a list of fellow domainers that they’ll mail, and they won’t go after end users at all.

    It’s a quick and easy method for setting up a broker biz I suppose, just put a list together and facilitate domainer to domainer sales for a cut, little real work involved.

    The problem of course is that the real/best value in most domains is with selling to end users, so if a broker isn’t willing or able to chase those deals down then there’s little reason to use them in the first place. We can all reach fellow domainers with an offer or an auction, it’s in spending the time reaching and negotiating with end users that a broker can (or should) earn their fees.

    That’s just my opinion based on my own experiences of late.

    June 15th, 2011 at 8:46 am

    Aaron

    Can anyone recommend any good brokers that do a great job of reaching out to end users?

    June 15th, 2011 at 11:28 am

      Elliot Silver

      @ Aaron

      I think all brokers do this, but it really depends on the domain name. You can’t really expect a broker to spend hours reaching out to end users for second tier names worth under $10,000 (in my opinion). Assuming brokers/consultants value their time at a modest $150-250/hour, them spending 4-6 hours on reaching end users is about the value of a commission on a $10,000 sale ($1,000). That time commitment doesn’t even guarantee a sale.

      June 15th, 2011 at 2:28 pm

    Rich

    I haven’t found a domain broker that I am comfortable with but the SnapNames auction seems to be very attractive given the Data.com sale and the possible $2.5 million bid for Social.com. Anyone have any views on the SnapNames auctions?

    June 15th, 2011 at 2:25 pm

    Carlos Martins

    Brokers are for domainers like PPC (Rick quoting). Mostly are dependent of corporations and companies that are interested to undervaluated some domains and overvaluate others. We are very experienced in several web sites with appraisals. They are capable of valuated and select puppiesadoption and reject adoptionmothers as Moniker brokers did with a past auction.
    We refuse to let our domains in the brokers hands. Preferablly i choose Epik or Estibot but only belive in my own feelings and experience. I have sold some domains by $500+ that SEDo appraisals gave less than $10.
    Well, direct to the end user. Of course.

    June 15th, 2011 at 2:42 pm

    Elliot Silver

    @ Carlos

    I think for names in that price range, you will be your best advocate. It doesn’t pay for them to have someone try to find you a buyer. Auctions are a whole other ball of wax.

    June 15th, 2011 at 2:43 pm

    Carlos Martins

    waxes are good suits for speculators (fake brokers). the price range i mentioned it was an example. i have apprasails for domains by $80k and $27k one most rigorous than other.
    the question it is nothing to do with the price range, sorry to say. if you have nothing to eat your price range is similar like albanese ask for living.

    June 15th, 2011 at 3:34 pm

    shake out

    Prediction

    People on franks platform, there top broker for frank will blow these ego driven brokers in the dust.

    Hope the big guns been saving there money. A good portion of the top names will be with franks broker I bet. 30 million to 40 million a year I am predicting by next year.

    June 16th, 2011 at 3:39 am

    Stephen Douglas

    El,

    As an individual domain broker like yourself, Adam Strong, Frank M., Stanfill, Page, Eric, and maybe Sequin, I find that sellers could care less if the domain was sold to someone on an email list, or by some well-written article spilling onto a news release service,

    As long as the broker sets the commission price (usually between 10% -20%), and sellers agree, it’s pretty cut and dried, yes?

    Show me one domain seller who hired a broker and was upset that they sold their domain under non-fraudulent means and below the confirmed minimums. Legally, a broker can’t sell under their client’s reserve restrictions, once they agree on that, it’s understood. All the client wants is the CASH ASSETS from the domain sale.

    Using a broker can mean selling your domain or not selling it. If you want to deny 10-15% commission to Eric Rice because he used a huge email list of domainers who may buy your domain for $1500, then don’t use Eric’s successful techniques based on “email lists”.

    Hell, a broker sells a domain I know is worth about $50 and says “I gotta take my 15%” which leaves me with a measly $425, I’m still not writing an article about “nasty ol’ brokers.” MOST domainers like to make a profit within 3-5 years, and the key word here is PROFIT.

    There are ways to sell your domains, people. You either shop them around by doing a lot of cold calls, list them on the listing services, hire a broker, or luck out with a pure contact from someone from a whois search.

    Either way the sale goes down, did you approve of the sale parameters? If so, then you’re happy if you made a profit.

    Bottom line, all the “cons” of this article of using a broker are based on YOU making a bad agreement to use the services.

    However, there is a large domain selling entity that wants you to list their domains with them, but reality indicates that the big domains being sold are actually a part of the broker’s OWN portfolio. I’ve seen this happen, but it could be a coincidence. They deny this, even though their company’s flagship website features strong domain selling terms, and that over half of the domains featured in a search result at their site are owned by them.

    This is rare, though. So, I have to say that El’s blog article is a puff piece. Sorry El. (So Puffy that I had to spend all this time pointing it out… arggggh)

    June 17th, 2011 at 10:49 am

    Elliot Silver

    @ Stephen

    If you read this article (http://www.domaininvesting.com/why-im-not-a-domain-broker) you will see that I am not a domain broker, never have been, and find it really annoying when people email me asking me to broker their domain names that are worth very little money yet they expect someone to spend the time and effort trying to sell their name to make a couple hundred dollars.

    If I like a name and the price is right, I take on all the risk myself when buying and flipping domain names. I also hardly ever use the services of a domain broker. I likely can do what they do at no added cost but my time.

    June 17th, 2011 at 10:53 am

    Stephen Douglas

    El, I could have sworn that you assisted in the sale of a significant domain name about 2 years ago.

    If you don’t say you’re a broker and never have been, I believe you. I must have had wrong information, ol buddy.

    I also get requests from people with pathetic domains they want to dump and think I drive the garbage truck to do that. I usually politely respond: “Dear ____, I only accept domains that I consider on the same level of value of my own domains. Why would I want to sell your domains for cheap, and you give me 20%, when I can make huge profits focusing on selling my own?”

    I figure that’s the end of that. Then they write back, NO LIE “I am willing to pay you 50% of the profits from any sales.” These are offers coming from my clients working with me on strategic portfolio organization, these are people out of the woodwork.

    I know you know what I mean.

    Hope you didn’t get too riled by me comment, bro. I have been so busy I haven’t commented lately, and a few people have aske me if I went underground.

    No, the bad ol Viking is still here to teach people how to build long ships.. 😉

    But that still doesn’t negate the key points of my comment. 😉

    June 18th, 2011 at 12:05 pm

    Carlos Martins

    Sorry mr stephen douglas but please explain me what are pathetic domains? Domains are really so adjectively defined as pathetic? Where they are?

    Among the Vikings probably there was excelent people. However the History shows another thing that movies can´t tell.

    I know a viking (nederlander) that came to Portugal and told me that profiting from our coast is a right of them since fishing is for all. That´s why heleave Amsterdam and lives here and Portugal for the moment have no fishing for us. Spain and Nederlands took it all. Or almost all according EU the New Bible.

    Can you learn us to build long ships? We forget it.

    What we could see is vikings came here to piss on our beaches and saying “what´s your problem?” beach is also mine now.

    Good.

    June 18th, 2011 at 12:47 pm

    Elliot Silver

    @ Stephen

    I may have tried to broker a name or two a long while ago, but not really since I have been full time. The one name I can recall trying to find a buyer for was Lawsuit.com but didn’t have luck, and that was around 2006 I think maybe even 2005.

    I’ve helped friends close deals but never for payment that I can recall.

    June 18th, 2011 at 9:21 pm

    Stephen Douglas

    Hi El,

    Well, I trust your knowledge of what you’ve done in the domain brokering area, so I can’t argue against it.

    I probably got my info from one or two of your friends who were “talking you up” regarding getting their domains sold. It does get tiring hearing about how great you are in so many areas. Dang, my private detectives have found NOTHING on you to put on TMZ or Huffington Post. What’s up with that? You have no vices?

    If that’s the case, then hell, I’ll write them back and say “That El Silver dude is useless in selling your domains and forget about trying to reveal him as a Weiner, a Clinton, a Gingrich, a Spitzer, and about 150 other guys who seem to prove that we guys are easy pickin’s for doing embarrassing things.”

    Just kidding bro. Truthfully, and you know this, I think you are one, if not the top 3 domainers in the world who we domainers can depend on for truth, great advice, and great scotch sent in the mail to those who say these kind of things publicly about you. harruuummmph.

    (that last vocalization is supposed to be a sound old scotchmen make when met with the thought there is no scotch available.)

    June 20th, 2011 at 2:15 pm

    Lauren T

    I am new to all this. Recently I started getting emails from domain brokers asking me if I wanted to bid on a certain domain name. What is the difference between using one of those guys and entering my bid at Snapnames.com?
    Once I bid on a name, who gets the money? How does my money get to that person? There is supposedly a deadline of 10 am PST tomorrow for my bid. Thanks.

    June 23rd, 2011 at 2:05 am

    Mike

    When you list Sedo, Afternic, MediaOptions, … it would be helpful to list their standard brokerage commissions as well.

    It used to be standard to charge 15% couple years ago, but I believe it is now mostly 10%, right?

    October 9th, 2014 at 11:26 am

Leave a Reply

Name *

Mail *

Website