How to Sell a Domain Name
Domain names can be quite valuable. Every week there are reports of domain names selling for tens or hundreds of thousands of dollars. Some even fetch well over a million dollars. Today, however, is the day you want to sell your domain name. Where do you start?
For most people outside of this industry, the act of trying to sell a domain name can seem simple at first but it will shortly morph into confusion, and possibly hysteria.
Unlike real estate, the domain name industry doesn’t have any kind of formalized MLS common to all platforms. Furthermore, every broker has different strengths and weaknesses. This is before you talk commission or even find a broker willing to reply.
Yes, I’ll put it out there. Selling a domain sounds easy, but it’s not as easy as you think.
It all starts with quality.
If you have a great domain name, then a quick e-mail to most domain name brokers will gather a fairly quick reply. However, getting through this gate is difficult. Why? 97% of domain names registered are not great domains. 97% of domain names registered are not worth spending time on. 97% of domain names registered are, well, you get it.
Why 97%? We like the numbers nine and seven. It could be 95% or 93% – no one has any solid data on this and even attempting to create this statistic is not going to do anybody any good. The reality is that most domain names are best served by a marketplace or a custom “for sale” page where the owner waits for that inbound lead to come one day.
If you fall in that 97% then honestly it really doesn’t matter. List your name on Godaddy, SEDO, Snapnames, Afternic – everywhere. The more people who see your name the higher the odds for success. Just don’t take a mortgage out waiting for the sale.
What is a premium domain?
If you wish to use the services of a domain name broker to sell a domain name, then you need a premium domain name. This is the moment where most people get angry. We’ve heard it all: “Cisco would love my domain name”, “Bill Gates would love this”, “I passed on a $500,000 offer last year”. Yes, if you can say it, we’ve heard it.
A premium domain name is simple in nature. For the most part, a premium domain name is going to have one or more these characteristics:
- A .com (in our opinion, hardly any brokers work on anything but .com) – This is simple supply and demand. There are so many .com domains for sale it doesn’t make sense to sell a .net or .org unless that name is incredible and priced to sell. Remember, it takes the same amount of energy to contact leads for a .com or . net. The odds of a sale are higher with a .com, period.
- Multiple Potential Buyers – If your domain name has only a couple of potential buyers, then it may be hard to attract the interest of the most-respected brokers. Again, supply and demand. When brokers dedicate resources they want the highest chance of success.
- Reasonably Priced – If your name is priced at $500,000 and you have never had a single inquiry, then it’s quite likely not worth that much. There are many great domains that get passed on representation all the time due to the seller’s unreasonable price expectations.
- No Trademarks – If you own a domain name with Pepsi, Microsoft, Google or any popular brand in it, then a broker is never going to reply. More importantly, you should probably re-evaluate your entire domain name strategy. There’s a reason you’re not selling domains.
There are also
- Revenue-Generating Domains (Not from arbitrage or silly SEO’d websites with no real content waiting for Google to slash.)
- Bulk Value Sales – Good domains sold in bulk at low prices.
And of course …
- Liquid Domains – Domains that are priced right and fall into the categories that wholesale buyers love to purchase. The China market is a great example. If you have numeric domains or short four-character .coms priced well, then having a broker represent you is quite easy to do.
What else do I need to think about when choosing a broker?
You need to find a domain name broker to help provide a fair valuation and explain the options in this marketplace, much like if you owned a piece of oceanfront real estate you would want a real estate agent who specializes in oceanfront property. Selling a domain name (like any rare asset) is a specialized service and you need people who are credible and experienced, and have your best interest in mind.
The good news is there are some really great, qualified brokers in this industry. The bad news is you need to find them.
What to look for?
- Footprint. Look for a broker who has a footprint and is known in the industry. Remember the crazy real estate days a decade ago when everyone became a real estate agent? The domain industry is a lot like this today, with the China market fueling sales from many angles. This growth has also created many brokers who are really just focused on flipping domains. While there’s nothing wrong with this model, it may not be the model you’re looking for. Brokers with footprints often have a long history of servicing clients and are focused on long-term referral business.
- Reputation. Ask your friends and family if they have ever sold a domain name. You may be surprised who has. A good recommendation from a friend is often worth its weight in gold. If you don’t know anyone who has sold a domain name then interview a couple of brokers. The keyword is interview: Make sure you’re choosing someone you’re comfortable with.
- Experience. Great brokers usually have a great résumé. Look for brokers who have sold similar domains. Much like real estate, some domain name brokers only focus on numeric domains, some focus on one-word .coms, some focus on brandable domains, and some do it all. Make sure you ask them not just about what they sold before, but also to provide examples of domains that are similar to yours.
You should also be prepared to discuss
- Exclusivity. You must be willing to give broker exclusivity. Again with the real estate example: Your agent wants an exclusive listing on your home since her advertising is likely going to result in a sale. Same with domain name brokers. We want to ensure we are fairly compensated should a sale happen.
- Commission. Expect to pay around 15% for the best representation.
- Patience. It can take a year or more to sell a luxury ocean-front home. In Hollywood, it often takes two years or more to make a movie. Earning a college degree takes four years or more.. All good things take time. If your domain name is good and priced right, it will likely sell. It may be a month; it may be six months. Be upfront with your broker and explain to them your expected timeline.
- Ownership Issues. Do you have complete control over the decision to sell the domain name? Is the asset company-owned? Is there a divorce pending? Any issue that could possibly affect the sale of the domain name should be discussed. Remember, the broker can only do their best job when you are as transparent as possible.
At the end of the day what you really need is someone who can develop a proven strategy for success more than someone who can just flip a domain. Someone who can help educate you about the market, provide fair opinions on value and help show your asset to the right buyers.
Remember, never buy the first car on the lot. Look around, shop around. You may end up choosing the first car, but then you almost certainly won’t have any regrets.
NameCorp™ is a boutique digital agency with an insane appetite for naming and more than 20 years of experience. Contact us to learn more about finding a better domain name.
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