Act as a Mediator and Resell for Profit? Ethical?

[barcode]

Hey Everyone,

I have spent deliberating about this for about 2-3 weeks now. I'd try be as transparent about the financials here so I can hear a fair judgement for the actions I may or may not take. This question is about ethics, economics, escrow and more.

So here I go:

There is a fairly large company who wants me to help with the acquisition of a domain name (fairly unimportant to domainers, my personal appraisal would be a high XX to mid XXX best case). I reckon this is for a marketing campaign they are planning to launch, and they need the URL as a backup. There are no TMs on the name, while a few companies operate with similar sounding websites. Its short and a .in ccTLD domain. For my 'services' of negotiating with the seller, buying the domain, they would pay me 10% as facilitation fee.

So basically, I would stand making x or low XX best case for a few hours of work. I have normally helped friends, and even clients/large organisations do such transfers for FREE!

In this case, the company may spend over low X million on TV campaign. And I am hoping to get my teeth wet a little more than just x/xx.

Now my question is:
How fair would it be to acquire the domain name and then re-sell it to the company (I don't think its ethical, but I don't want to hold them ransom/cyber squat either).

Just that I feel I could acquire the domain for $400 (worst case) and sell for say $1000 and make say $600 instead of the $10-20

Should I be doing this at all?

Edit: May I add here: I already asked them for a "larger fee" but they are willing to pay the seller xx,xxx, but not xxx to me, which has been the very reason I asked whether I should even think about it. Upon asking the client on the budget for acquiring the domain, he responded with $10,000 without hesitation.

Please clear my conscience and guide me.

Thanks!!

PS - Please move to the right forum if I have placed this wrongly.

 

[SlimPickins]

i am surprised you are even considering this. A better, financially and ethically speaking, option imho would be to simply negotiate a mediation fee that you would be happy with, REGARDLESS of what you are able to secure the domain for the buyer for, and then proceed in an ethical and transparent way in the best interest of the buyer that employed your services. Agreeing to work "for" them and then brainstorming ways to achieve your own agenda is, again in my opinion, a wretched thing to be considering let alone broadcasting here.

 

[barcode]

A better, financially and ethically speaking option imho, would be to simply negotiate a mediation fee that you would be happy with

May I add here: I already asked them for a "larger fee" but they are willing to pay the seller xx,xxx, but not xxx to me, which has been the very reason I asked whether I should even think about it. Upon asking the client on the budget for acquiring the domain, he responded with $10,000 without hesitation.

 

[Bannen]

i am surprised you are even considering this. A better, financially and ethically speaking, option imho would be to simply negotiate a mediation fee that you would be happy with, REGARDLESS of what you are able to secure the domain for the buyer for, and then proceed in an ethical and transparent way in the best interest of the buyer that employed your services. Agreeing to work "for" them and then brainstorming ways to achieve your own agenda is, again in my opinion, a wretched thing to be considering let alone broadcasting here.

Agree with this.
If you make a working deal to act as agent for/with someone, don't change things up down the road and reneg on the original terms of the deal. It's unethical, doesn't matter that the company is huge, and it will ensure they - or anyone that hears about it - will not work with you again.
Instead, make a more fair deal up front... if they figure to pay $400 for the name, agree but tell them it'll be a few hours out of your life and you feel that is worth a flat fee of $100 (or whatever you think is fair), as well as negotiating a further fee if any difficulties arise that make the job harder or take longer. Also establish a 'kill fee', a small fee they are to pay you regardless in case the deal should fall through, so you're recompensed for your work at least a little. The kill fee could be in the form of a 25% deposit.
My 2 cents

 

[SlimPickins]

then say that you want $1K to secure the domain for the best price possible. it seems that is the % mediation fee they are willing to pay you to secure the domain and, IF you are more motivated to negotiate aggressively and secure the domain for closer to what you feel is realistic than what their budget is, you come out ahead and, very importantly, they do too.

 

[bmugford]

There needs to be a minimum set fee for these type of services. It is a waste of time to do this type of work for virtually nothing.

I would just tell them to offer you a realistic fee for your services, or acquire the domain themselves.

Brad

 

[barcode]

then say that you want $1K to secure the domain for the best price possible. it seems that is the % mediation fee they are willing to pay you to secure the domain and, IF you are more motivated to negotiate aggressively and secure the domain for closer to what you feel is realistic than what their budget is, you come out ahead and, very importantly, they do too.

I think this is a good point. Max price they want to pay is $10,000 and my max commission on that is $1k. This fee approach should work well with them I guess. But commission > value of purchase :td:

 

[copper]

Let them know your price.
How about...

10% of domain purchase price or $500, which ever is greater.

Let them know you don't work for pennies.
Let them know it's your way or highway :D

 

[DubDubDubDot]

Your client would be very upset if you used maximum bid information against them that was given to you in confidence. Especially if you pay $100 for something with resale intent using inside knowledge that they are willing to spend $10,000. It seems like there is probably even something illegal about that.

That being said, paying $100 for the domain knowing that you can get around $10,000 for it would be extremely tempting. If you go forward with this, put privacy on the domain immediately and get paid through a 3rd party so that they do not discover you are the new seller.

Another option, though risky, is to contact the seller and demand a kickback or you are directing your client elsewhere. If he doesn't expect more than a few hundred for it, he may be very willing to cut you in on a high % of a big sale. There is nothing stopping him from keeping the money for himself though.

 

[abc3200]

Your client would be very upset if you used maximum bid information against them that was given to you in confidence. Especially if you pay $100 for something with resale intent using inside knowledge that they are willing to spend $10,000. It seems like there is probably even something illegal about that.

That being said, paying $100 for the domain knowing that you can get around $10,000 for it would be extremely tempting. If you go forward with this, put privacy on the domain immediately and get paid through a 3rd party so that they do not discover you are the new seller.

Another option, though risky, is to contact the seller and demand a kickback or you are directing your client elsewhere. If he doesn't expect more than a few hundred for it, he may be very willing to cut you in on a high % of a big sale. There is nothing stopping him from keeping the money for himself though.

I don't think that there would be anything illegal about it. However, I would not suggest doing it for ethical reasons.

The whole setup seems to be inefficient though. If I understand the situation correctly, the better you negotiate on the buyer's behalf, the less you make. That is a perverse result. You should negotiate a base fee plus a percentage of the difference between their max price and the actual price. If the company does not agree to that, they are asking to get jobbed by you buying from the seller and reselling to the buyer.

 

[Jeffrey]

Think of the future and your reputation. If they found out, they may not ask you for a bigger job in the future, and they may even tell others about you.

 

[Jawed]

Something doesn't fit here. Your client is willing to pay $10k for the name and you believe that you will acquire the name for a few hundred quid (worst case!). I doubt it very much. Have you contacted the seller yet? I won't be surprised if he asks for $20k or more. Please keep us informed.

 

[Archangel]

SEDO and Afternic do very little and they make more in an hour than most of us do in a month.

I'm just sayin' $1000 can be done without much time, compared to 40-hours-a-week jobs.

A $1000 for a few hours of work is a hell of a lot of money imo. There is a very small percentage of people that make that.

 

[glaxxon]

Ok then can someone point out how brokering services like sedo work? Wont their brokers be tempted by similar situation? I remember someone telling that the budget that the buyer submits is to be paid even if the broker acquires it for a lower price. Is this true? If so then i dont see anything wrong with what op is asking about...

 

[Archangel]

I was just highlighting that some companies do little to nothing and make a lotta money. There is no reason the OP can't do this since SEDO etc do pretty much the same thing.

I realize this. Their situation is volume.

---------- Post added at 01:09 AM ---------- Previous post was at 01:08 AM ----------

SEDO doesn't really earn it money aside from acting as the middleman. Other than that, they're pointless wastes of one's time.

Ok then can someone point out how brokering services like sedo work? Wont their brokers be tempted by similar situation? I remember someone telling that the budget that the buyer submits is to be paid even if the broker acquires it for a lower price. Is this true? If so then i dont see anything wrong with what op is asking about...

 

[glaxxon]

I still dont get it. Do other brokerage companies require to pay the whole budget given by the buyer? Also does the broker have the means to actually pay lesser to the seller than what the buyer pays to them?

 

[Spade]

Some companies dont have the skill or the knowledge in order to go out and acquire a domain name (and sometimes they have it, but wish to remain anonymous) - these are perfectly good reasons a company may use a third party to broker the deal.

In this case though, you cannot offer to accept a fee to broker (even if that fee is smaller) then acquire the domain name and resale for more. That is Unethical. Especially if your job is to acquire a domain name at the lowest possible price.

Whenever I am contracted out to acquire a domain name, Depending on the estimated acquisition price, I normally quote a fixed amount for the work. This way you dont have incentive to charge the buyer the most he is willing to pay (and instead, are working for him)

In this case, your in a tricky spot. It sounds like you have already agreed to the fix price in exchange for the work. If thats the case - Honor your agreement and do the right thing.

 

[barcode]

Hello everyone,

Thanks for being a good sounding board. I completely concur with everyone - I shouldn't buy and resell the said domain to the client.

I wrote to the owner of the domain. Turns out he is in the same city as me. After an email exchange we chatted up on the phone. Turns out, he just bought the domain as part of his college entrepreneurship project, but he is willing to let go of it for some cash. He even has a few other similar domains that the client should be interested in.

He quoted $200 for the domain. And another $100 for 2 more domains that compliment the first domain. He is willing to pay me commission if I can sell those to the client as well. They are variations of the original domain (more like how the word can be spelled in different dialects.)

I am going to propose a fixed fee of USD 100 to the client and make this quick rather get greedy about it.

Thanks for all the feedback

---------- Post added at 10:31 PM ---------- Previous post was at 10:29 PM ----------

Btw, the client doesn't want me to buy the domain at the "lowest possible price". He just wants me to buy the domain and hand it over to them. This is in absence of knowledge, any internal expert, operational task, very unimportant for my client (important for his boss though). Since as a commoner he knows domains like business.com, sex.com selling for millions of dollars, he thought this domain would cost a few hundred grand too!

I was just confused between acting like a broker OR acting like a trader who would buy goods and resell them. Acting like a trader would have made me a lot of money for sure!

About the client, he doesn't care. His CEO wants the domain at virtually any price

 

[abc3200]

It'll be interesting to see what the domain name is once you are able to post it.

 

[Archangel]

I'm curious of this as well.

It'll be interesting to see what the domain name is once you are able to post it.