NameSilo
Bob Hawkes

Domain Name Payment Plans

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By Bob Hawkes, Nov 7, 2019
?

Do you currently use payment plan options on your domains?

  1. Yes, but for less than 25% of my portfolio

    52 vote(s)
    18.6%
  2. Yes, for 25% to 75% of my portfolio

    29 vote(s)
    10.4%
  3. Yes, for 75% to 99% of my portfolio

    17 vote(s)
    6.1%
  4. Yes, on my entire portfolio

    29 vote(s)
    10.4%
  5. No, but I am considering doing so in the future

    91 vote(s)
    32.5%
  6. No, and I never will

    62 vote(s)
    22.1%
Total: 280 vote(s)
  1. 4better

    4better Established Domainer VIP

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    A well-written, thought provoking subject. I always admire Bob's articles.

    Don't have any current payment plan option on my domains but am considering so in the future and that's what I voted.
     
    The views expressed on this page by users and staff are their own, not those of NamePros.
  2. HandMadeDomains

    HandMadeDomains Established Member

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    Absolutely agree with you about Bob. Must reads for me.

    What sales platform(s) are you using for your domain sales?
     
  3. 4better

    4better Established Domainer VIP

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    Using Dan, Afternic, Sedo, Epik
     
  4. HandMadeDomains

    HandMadeDomains Established Member

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  5. CDM

    CDM Established Member ★★★★★★★★★★

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    Excellent write-up.

    One thing people may want to keep in mind is that some domainers or brokers may purchase your domain on installment, with the intent to market and sell the domain to another buyer at a higher price while they are leasing it, and may engage in soliciting end-users about your domain.

    This is a controversial practice that has been discussed before here on Namepros and elsewhere on blogs. CF this thread: https://www.namepros.com/threads/vote-now-selling-a-domain-name-you-dont-own-fair-or-foul.1151930/

    Leaving aside any discussion of ethics, some domain owners simply do not want it being done with their domains, for the reason that it could stir up legal trouble for the owner including a UDRP (also explained in detail in the above referenced thread). So anyone considering selling via payment plans should be aware that this possibility exists.

    Although this could occur through any platform, I've looked at the DAN.com terms of service, and there is nothing in the lease agreement (called 'Additional Agreement') that specifically precludes a lessee ('Transferee' in their definitions) from engaging in this practice while a domain is under lease. And it does happen. Further, if you discover this is taking place it does not appear to be grounds for terminating the agreement, so you'd remain locked in.

    However, the DAN terms do include the following (excerpted):

    Thus if the Transferee were to market your domain and run afoul of trademark interests which came back to haunt you, I believe you could still potentially seek to hold them liable under 6.d. and potentially also 6.b. (if it could be proven they represented themselves as the owner when in fact they were not, which would be fraudulent). Further, I believe it could be construed to fall under paragraph 7 as an activity that caused damage. But I am not a lawyer so do your own due diligence on this. This is not legal advice.
     
  6. Bob Hawkes

    Bob Hawkes formerly MetBob NameTalent Gold Account VIP Trusted Blogger

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    Thank you for a really valuable point that had not occurred to me in writing the article. I agree that could be really negative, and one should be careful. If the time frame of the payments is relatively short and the price you got is great, maybe of less concern than the case of say a 5 year plan that you did not get that great a price.

    Thanks for your kind comments @HandMadeDomains and not sure if this was a question intended for me personally or a rhetorical question for all readers. Anyway, here is my personal answer....

    Nine months ago I had none of my domain names on payment plans. Now I have about 40% of them on a payment plan somewhere, with active payment plan options on my names that are at DAN, Epik, and NameSilo. I also have domain names at Afternic, Sedo, Namecheap, and Dynadot, and would offer some of those on a payment plan if the option became available.

    I have varying lengths of time on the Epik ones, from one to five years. I personally have not added an interest rate.

    Thanks again for all of the positive and insightful discussion, everyone.

    Bob
     
  7. HandMadeDomains

    HandMadeDomains Established Member

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    Thanks Bob.

    I'm genuinely curious about others approach to this emerging option and greatly appreciate your own experiences.

    It seems like innovations and competition are increasing among the platforms as the domain market matures. That's got to benefit the entire marketplace.

    It might be helpful if the platforms that offer installment pricing actively promoted those domains as a service to buyers. Help them to understand that there are options to high domain acquisition costs.

    Tom
     
  8. cabotower

    cabotower Top Member VIP

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    i don't know if this question was answered or not. do commissions get deducted every month or are the first several payments kept by the marketplace? are all the marketplaces the same when it comes to payment plan commission payments?
     
  9. Bob Hawkes

    Bob Hawkes formerly MetBob NameTalent Gold Account VIP Trusted Blogger

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    It is a good question. You should check with each service for their terms, but I think in most cases the payments are made monthly. I believe that some subtract the commission up front, and some even it out, but again check.

    With DAN if you go to your administration tab it will show you under the Installments section a listing of both payments already received and those that are pending. I don't know with DAN whether they take the commission up front before other payments are made or a bit each month. I could not find the answer with their documentation. I am tagging them @DAN.COM to hopefully answer here.

    With Epik, if you opt to give the buyer a money-back guarantee period your first instalment is not paid until after that period. After that I believe that they do spread the commission over the monthly payments, but it is possible I am wrong, as I could not find that in writing on their knowledge system. I am tagging @Rob Monster and @Jess Robison to either personally or with someone else at Epik answer how the commission is subtracted on monthly payment plans.

    With NameSilo you can track your payments from the MarketPlace Manager and then with the SellerResources tab which will show you the payment plan sales that you have made and how the payments will be made. I have not yet had a payment sale and could not find a clear answer on how the commission is calculated, but I am sure NameSilo staff can answer if that is critical to you. I am tagging them @namesilo as I presume others have the same question you have on whether they take commission up front or a bit each month when a domain sells on their marketplace on a monthly plan.

    Thank you for the good question.

    Bob
     
  10. WatchDogue

    WatchDogue Top Member VIP

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    In the late 90s' /early 2000 we had a domain name sales website and included both a rent / lease option and a payment plan option ( think it was limited to a one year max. payment term ) for several of my higher ( probably outrageous ) priced names.

    Had several discussions re both options with a few interested parties and in the end I declined to go further with either option and removed the options from our site.

    My hang-up was always the same - if I own " the domain" am I not responsible for what the
    leasee / payment plan party ultimately does with the content of the site?

    Back then as I recall a number of seemingly benign domains were used for " adult content sites " and while I don't per se oppose such sites for competent adults I personally didn't want to own a domain that may ( ? ) be used in such a manner.

    After reading your thought-provoking article I am now considering the advantages of a domain name payment plan for select domains.

    The article was comprehensive, quite thorough really, and has me self-deliberating a payment plan option for select names.
     
    Last edited: Nov 19, 2019
  11. bmugford

    bmugford www.DataCube.com PRO ICA Member VIP ★★★★★★★★★★

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    Here is my experience on lease deals / payment plans in general...

    The vast majority turn out to be a pain in the ass. I have done many of them over the years and more often that not there is some sort of issue or I am constantly trying to track down the buyer for payment.

    Brad
     
    Last edited: Nov 19, 2019
  12. Bob Hawkes

    Bob Hawkes formerly MetBob NameTalent Gold Account VIP Trusted Blogger

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    Thanks for input Brad. I am presuming your experience is with ones you directly managed as opposed to marketplace ones like DAN or Epik where they would deal with nonpayers?
    Bob
     
  13. bmugford

    bmugford www.DataCube.com PRO ICA Member VIP ★★★★★★★★★★

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    Yep. It might make sense on a scale where you have multiple under contract, but not just 1 or 2.

    Brad
     
  14. namesilo

    namesilo Top Member NameSilo Staff VIP

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    Thanks for the tag Bob. To confirm, we take our commission on each monthly payment as it gets paid, not all up-front.
     
  15. HandMadeDomains

    HandMadeDomains Established Member

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    I'm also trying see the end user's point of view.

    On one hand leasing a domain seems like a cost effective solution.
    You could make the case for very topical "of the moment" domains, or specific short term marketing campaigns for example.

    But if the end user is serious about creating an internet business solution, wouldn't that tend include securing a domain outright in the initial funding startup?

    Does anyone have any statistics or anecdotes on conversion of leasing to sales?
    Or what types of businesses have made use of domain leasing? (Don't necessarily have to name the companies, just looking for category types)
     
  16. Pazu

    Pazu Established Member

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    Thank you, Bob, for all the insightful and balanced articles. The maturity with which you approach your work and communications continues to inspire me.

    I'd like to share my recent story, as it ties in with this thread.

    An inbound offer came in on my Efty marketplace lander for a name registered with Namesilo. The buyer, who supplied his identity through Efty, made a substantial offer of 40% of my asking price and said he couldn't pay my full price.

    I emailed offering to cut my price 20% for a cash deal or pay my full price on a monthly plan using Namesilo over 24 months. A week later, I email again and the buyer replies he we will do the deal if we combine option 1 and 2 ... 20% off and a monthly plan. I agree and set up a private marketplace listing on Namesilo as per our terms, but I find Namesilo has a maximum 12 months on plans (fair enough).

    I email the buyer again with instructions and say sorry it's only 12 months. A few days later the buyer emails me saying he has trouble completing the transaction - it won't let him choose 12 months and I spend time with support isolating the problem. If I had read this forum thread earlier, maybe I would have saved myself a headache. The domain was up for renewal in three months and was only presenting the option to pay over three months. When I renewed the domain until 2021, the buyer was immediately able to complete the transaction as desired.

    The payment length on Namesilo can only be as long as the current expiration (as pointed out previously). So if it's important to you that 12 months be consistently available to the buyer, e.g. if you were parking with Namesilo, you'd need to go above and beyond the standard one year renewal. Or wait for the buyer to contact you asking for a longer term and then manually go in and renew an additional year (as happened in my case).

    In deciding whether I would transfer the name to Epik or DAN just to get a 24 month payment plan, I found Namesilo takes 3 - 7.5% commission depending on payment method. In the first buyer payment, yes, Namesilo did take 7.5% of the payment amount off the top, with the balance to clear in a week before added to my account funds. Epik and DAN charge 9.0% but have better payment options. Epik's customization of the payment plans is astounding! Namesilo allows buyer to be in default for 3 months before repossession. Epik says their repossession would be very prompt. Also interestingly, Epik tries to guarantee the payment method with renewed payments over the term - automatic payments? Namesilo lets the buyer vary the method of payment each month, so theoretically the commission rate could vary.

    Maybe the buyer would have been able to come up with the price I requested up front, but certainly this made it easier. He came in offering 40% and ended up paying less than 10% to get started. I'm in domaining for the long game and I think this name would only appreciate, so in case of non-payment I'm happy to take back the name.

    I will use the payment plan option more in the future, starting with Epik landers because they present the options to the buyer so clearly, but also I think it's worth mentioning in email responses to inbound price requests. I was at first worried that I was over-complicating the negotiations by presenting options, but in fact the buyer wanted the option. It's nice that we have such a strong arsenal of payment options available to us to help complete sales that work for both the buyer's and seller's needs.
     
    Last edited: Dec 13, 2019
  17. NicTraders

    NicTraders Upgraded Member Gold Account Blue Account VIP

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    LasVegas.com is apparently being paid off in instalments over 35 years. $90mil. I'd say that's a serious buyer, and at that price the instalment solution is likely appreciated. No, it's not exactly a start-up but I think the example is still valid - startups don't have pies of funds available either (or many other important things to spend them on) so I reckon payment options would open them up to consider domains that might not have been under consideration otherwise.
     
  18. NicTraders

    NicTraders Upgraded Member Gold Account Blue Account VIP

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    Umm, that should be PILES, not pies!
     
  19. garptrader

    garptrader Top Member VIP ★★★★★★★★★★

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    At first glance, extended payment plans seem to be a means to generate recurring income which with enough simultaneous rentals could pay for a portfolio's renewal costs as well as generate passive income. However, Godaddy and Afternic where most of my sales occur do not offer this option. As well, we still live in a world that generally speaking places little value on domain names. So the domain you might be willing to lease for $250/month for five years the end user wants to buy for $79 BIN.
     
  20. Samer

    Samer Top Member VIP

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    Not anymore. March 19, 2019

    Remark sold Vegas.com, to VDC-MGG Holdings LLC, an affiliate of Remark’s senior lenders for $45 million, used to pay back the lenders, and left $10 million debt.

    "We purchased Vegas.com three years ago as a turn-based... time new ownership..."

    "significantly reduces debt, restructure balance sheet and streamline cost...”

    https://www.prnewswire.com/news-rel...s-agreement-to-divest-vegascom-300814757.html
     
    Last edited: Jan 8, 2020
  21. NicTraders

    NicTraders Upgraded Member Gold Account Blue Account VIP

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    I believe that's Vegas.com, not LasVegas.com. It's a different deal to what I'm talking about. The deal for LasVegas.com was initiated in 2005 and is still ongoing (still paying instalments) as far as I'm aware.
     
  22. Mister Funsky

    Mister Funsky Happy New Year VIP

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    Good point. Now I have something to add to my 'to do' list...check TOS of lease/finance providers I am using or will use.
     
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