Alter.com Marketplace

[Deven Patel]

Hi all,

I wanted to introduce a new premium domain marketplace we just launched called Alter. I would love to hear your thoughts! As the world’s largest community of domainers, your feedback would be invaluable.

Let me introduce myself. Although I’m new to NamePros, I’ve been around the block. I’ve been buying and selling domains for my own startup ideas for over 20 years. As a serial entrepreneur, I founded a number of startups across various industries like marketing, web hosting, social networking, blogging, and SaaS. This experience has helped me understand how indispensable a brand name is to a business.

Most new entrepreneurs don’t think twice about their company name. Our goal is to change that! A brand name literally has the power to make or break their business. This is more true today than ever before now that there are countless alternatives to every product or service imaginable. Sure, every business may have their own world-changing differentiator but from the outside they all look the same at which point the main differentiator ends up becoming their brand name. In a world full of distractions, we no longer have the attention span to thoroughly research what we buy so we rely on our emotions. This is why large businesses like Apple and Amazon spend billions on their “brand” alone because they understand that customer perception is everything.

Anyway, I noticed that most marketplaces that exist today are focused more on the seller rather than the buyer. Our goal is to reverse the equation and prioritize buyers because I think they are the key to success in any industry. The domain industry is no exception. Without buyers, there’s no money. This is why we’ve made it our mission to help entrepreneurs succeed!

And what’s with the 30-35% commission rate most of these marketplaces are charging? Unless they’re doing more work than a human broker, I don’t think anything over the industry average of 15-20% is warranted. We’re changing that. Alter has one of the lowest rates in the industry, an all-inclusive 10% commission fee when a name sells. There are no other fees or restrictions.

What do you think? Are we on the right track or barking up the wrong tree?

Deven

This was a promoted post.​

 

[timestamp]

Here is one suggestion for you and your competition:

Charge 30% for every sale, 10% for you, 20% distribute to all sellers who didn't make a sale in a current year. At least they will have some money for renewals, and keep domains pointing at your site.

This is a win-win for all, and not win-win for some.

Mark this date. Let's see how long does it take to implement this.

OK. Ready... Set... GO!

 

[Deven Patel]

Regarding installment plans- while you're right and some buyers default, the ability to pay with installments can enable sales that would otherwise not happen and installments are becoming a must in any brandable marketplace these days and also at registrars and marketplaces such as Dan.com, Epik.com, NameSilo.com etc. (I think eventually installments will get to Godaddy/Sedo as well). I'm pro installments since I both sell domains using installments and buy domains using installments. Sometimes I buy domains that I would have skipped if the option to pay for them conveniently didn't exist and for startups this is even more relevant and can allow purchases they wouldn't have otherwise made. As for sales- I've only had one buyer default so far. Also, please keep in mind that there's the option of offering installments with a big down payment- so that way the buyer is more invested from the get go and the seller gets more money upfront so even if the buyer defaults- there's a significant upside. It's an option to consider.

That's a great explanation. We'll certainly consider adding this option to our marketplace as we move forward.

As for the sales- I think you're contradicting yourself somewhat. You say that on the one hand most buyers arrive directly to the landing page of the domain they want and on the other hand- that you expect this direct traffic to generate sales for other people.

I apologize if my explanation was confusing. You're assuming that when buyers land on a domain, they have their mind set on buying only that domain. But the actual benefit comes from both of those things working together. They're not mutually exclusive. It's the total pooled traffic from all the domains listed at the marketplace that helps everyone equally. That's essentially the point of a marketplace vs individually selling domains yourself. Maybe this will make more sense if we put ourselves in the buyer's shoes for a second and walk through what they experience.

Buyer Sales Flow (direct/type-in traffic):

Let's say you're a buyer looking to start a new business.

Step 1. The first thing you're going to do is make a list of names you like off the top of your head and maybe even brainstorm a few with friends and family.

Step 2. Then you're going to check if any of those names have an available domain by directly going to that domain's landing page.

Step 3. When you find a domain that's for sale and realize it's listed on a marketplace your natural instinct is to start browsing the marketplace for alternatives. Because your goal at this point is to find the best name possible for your business within your budget.

Step 4. If you find a better alternative for your specific business idea, you buy someone else's name. Otherwise, you buy the original name that you landed on.

And this doesn't mean that one seller benefits more than the other. Both sellers benefit from each other's traffic as long as both have similar quality domains listed on the marketplace.

If people have tons of direct traffic for certain domains- they can use Efty + Escrow.com or Efty + Dan.com and pay much less than 10%. Potential buyers from direct traffic that eventually buy a different domain account for some sales in brandable marketplaces of course, but you need to prove that it works at Alter and that the 10% comission is worth pointing the landing page to you.

The major difference with a brandable marketplace like Alter vs a regular marketplace like Sedo is that we're investing our own time and resources into marketing your domains (e.g. curating them, appraising them, designing logos, adding descriptions, categorizing, marketing through other channels, etc).

The marketing spend to get potential buyers should be significant (which might be problematic when you take 1/3 of the commission other marketplaces take and don't have that extra money to invest in marketing) and sales shouldn't be mostly based on the direct traffic the domains bring. BB and especially SH invest a whole lot of money into marketing. BB has very strong connections and repeat customers who buy many domains. SH also has potential buyers attracted by their contests.

Have the other marketplaces actually provided any solid data that shows what percentage of their commission is actually spent on marketing your domains? And what their CAC/LTV metrics are for each individual marketing channel? Every company spends money differently. Our goal is to be as efficient as possible with everything from our overhead to marketing through more innovative approaches. We're also willing to reinvest most of our profits back into the business for long term growth. All of this essentially means the sellers get the same exact benefits as on the other marketplaces but at 3X less cost.

Let's talk about data. Here's something interesting. I had listed a few of my own domains with a big competitor (brandable marketplace) in the past and then moved those domains over to Alter once we launched. Here's the traffic comparison between the two:

If this competitor was really investing time and effort into individually marketing my domains they would've received much more traffic, no? Now we do market our domains too but our marketing budget is much smaller than our competitors at this point yet the data shows opposite results.

You guys have the potential to get there, but it's a leap of faith using you at the moment. I'm not against making that leap or at least trying it out with a few domains- but at the moment, it's more likely that you'll get 10% for sales that sellers could have gotten elsewhere with a simple landing page and a lesser commission since you're just getting started with advertising and Alter is still an unproven and unknown entity. Great name, great logos and this seems serious- but it might take time until this concept proves itself (or not), with your reps closing sales and the platform proving to be 100% trustworthy. I'm all for you guys succeeding but time will tell.

Agreed, there is certainly a leap of faith here for sellers. There has to be, just like how there was for every other marketplace when they first started out. I'm here to ask sellers to take that leap of faith and give us a chance because I honestly believe that it'll be worth it.

As for: "We only transfer the domain over to the buyer once payment is successfully received."

What happens if the domain is transferred to the buyer and then it turns out that the credit card that they used was stolen or some other mischief happened. Will you still send sellers the money at your own loss, since they lost their domain?

Great question. We make every effort to ensure that payments are processed securely (i.e. for larger transactions we'll take additional steps to verify the buyer's information). Although this would be very rare if it does happen we would eat that cost. It would be unfair to put that on the seller.

I think you guys should prioritize having a FAQ section that will cover all these questions I asked and countless others (here's one: can domains be removed at any time, even though you spent money on logos and advertising or is there a notice involved etc. etc.) so every aspect of the platform will be covered and clear, both to buyers and sellers. That's an important step in making both buyers and sellers know what they're stepping into when they trust you with their domains/money.

Absolutely, we're building a list of FAQs as we speak so keep those questions coming!

 

[Deven Patel]

Unfortunately, I cannot receive email verification when registering an account with HotMail. Is there the same situation?

That's odd. Please reach out to support for help.

 

[Deven Patel]

I am all for more competition in the industry and wish you the best of luck but it seems to me you are a bit out of touch with reality with that declaration about 10% being the advantage. As already noted above by SuperBrander et al. people can get lower fees than that with their own names with other platforms and until you gain great traffic/brand recognition on your own the comparison with the 30% is inappropriate.

Please see my response to SuperBrander above. I even included some data that shows you an apples-to-apples comparison between Alter and one of our major competitors.

The major difference with a brandable marketplace like Alter vs a regular marketplace like Sedo is that we're investing our own time and resources into marketing your domains (e.g. curating them, appraising them, designing logos, adding descriptions, categorizing, marketing through other channels, etc).

Sure, the other brandable marketplaces have some name recognition but nowhere near enough to justify the outrageous commission they charge. Most buyers don't have a clue who they are and in the brandable domain business repeat buyers are rare so that recognition doesn't help as much as it would help a registrar like GoDaddy.

Also, every company spends money differently. Our goal is to be as efficient as possible with everything from our overhead to marketing through more innovative approaches. We're also willing to reinvest most of our profits back into the business for long term growth. All of this essentially means the sellers get the same exact benefits as on the other marketplaces but at 3X less cost.

 

[Deven Patel]

Please share some sold history/data from the marketplace if it made

Unfortunately I can't share this publicly in order to keep competition at bay. But you are more than welcome to list your domains with us and compare the end results yourself.

 

[Deven Patel]

Here is one suggestion for you and your competition:

Charge 30% for every sale, 10% for you, 20% distribute to all sellers who didn't make a sale in a current year. At least they will have some money for renewals, and keep domains pointing at your site.

This is a win-win for all, and not win-win for some.

Mark this date. Let's see how long does it take to implement this.

OK. Ready... Set... GO!

That's an interesting idea but I don't really think it would work because not all sellers are the same. Some sellers invest heavily into building a quality portfolio while others buy everything in sight. Quality vs quantity. It wouldn't be fair to treat both equally.

 

[SuperBrander]

@Deven Patel Thanks for the response. Good to hear about the fraudulent buyer scenario, about consideration of installments and the FAQ section. As I said, there's no dispute that traffic from one domain can lead to a sale of another, but you guys seem to be counting on it to a much larger extent than you should. Most brandable domains (ignoring popular dictionary words and the like) even ones that sell for $XXX-$XXXX in the wholesale market, don't get a ton of traffic. I understand that the pool will help, but any brandable marketplace offers that. You said that Alter is buyer oriented but I still don't understand what that means. The only thing I see in relation to that is the 'Featured Business Ideas' trying to pitch a few ideas to entrepreneurs. Personally, I don't think people step into a site without an idea and look for an idea to buy a domain for. But maybe I'm mistaken.

As for the traffic comparison you made- your marketplace currently has around 300 domains. Other marketplaces have tens of thousands of domains. So expecting the traffic for each domain to be higher or equal there... isn't really fair, IMO. In fact, if anything- I would have expected the traffic to be much higher at Alter based on the fact that a person can browse your entire inventory within a few minutes at the moment.

A few additional issues that perhaps you could address:

1. Visibility. You guys currently have the same domains always at the top as featured so any visitor of your site is always exposed to them first. All marketplaces shuffle listings around, so you guys should do it too. Not sure that the 'popular' setting should be the default when people reach the site. Perhaps new arrivals should be at the top.

2. I submitted a few domains to see if they'd be approved and for how much. 4 out of 5 were approved, all dictionary words and they were all priced very low, so I can't publish any one of them. Also, I won't mention specific names listed at Alter but there are quite a few listed brandables that are priced very high. IMO, other marketplaces would have priced them much lower. So that kinda makes me question if you guys have your pricing figured out. What good is a 10% vs 30% commission when the pricing can be off to a degree where listing domains isn't worthwhile?

3. Are there "house" owned domains at Alter? Meaning, are you or the staff listing your own domains? Personally, I'm not a fan of marketplaces "competing" with sellers. BB does it and it's caused a lot of controversy in the past. It can create situations where the site owned names are or at least seem to be featured and/or selling more than sellers' names and it creates an air of general mistrust.

Anyway... thanks again for the responses. It's cool that you're not shying away from answers and giving in depth replies.

 

[xeroox]

Is normal that the font of the business card mockup goes out of the line? https://prnt.sc/ujs9ev

The 7.5% commission you mentioned is really for a Sedo/Afternic/DAN-like experience that offers no curation whatsoever. You're basically asking buyers to find a needle in a haystack of low quality domains. No buyer is going to put that much effort searching through them. I know I never did when I was a buyer.

And I understand why sellers get excited about white label options but I haven't seen any solid data that supports the theory that white label is better than a well-trusted brand like the marketplace itself (i.e. if you were a buyer would you rather buy a domain on GoDaddy or KoolBizNames.com?). I mean I understand white label makes us feel better and we think that buyers will only see our domains vs the others on the marketplace but on the contrary I think buyers are much smarter than that especially when it comes to buying high end domains. They're not going to spend thousands of dollars without thoroughly considering the available alternatives.

Isn't Alter in the same situation? Noone knows about Alter so why a customer should trust more Alter than any other whitelabel marketplace? Squadhelp besides direct traffic have their own way to acquire new buyers, Brandbucket has a huge buyer base with their years of work

 

[Deven Patel]

As I said, there's no dispute that traffic from one domain can lead to a sale of another, but you guys seem to be counting on it to a much larger extent than you should. Most brandable domains (ignoring popular dictionary words and the like) even ones that sell for $XXX-$XXXX in the wholesale market, don't get a ton of traffic. I understand that the pool will help, but any brandable marketplace offers that.

It seems like there is a misconception here. I'm not saying we're counting on direct traffic as our only source of marketing. I'm saying that direct traffic already accounts for a bulk of the traffic on these brandable marketplaces. Yet they charge an outrageous commission. My point is that the additional marketing they say they're doing can be done for much cheaper and isn't worth the extra 20%+ in commission. Of course we're going to utilize other marketing channels. There's no doubt about that!

You said that Alter is buyer oriented but I still don't understand what that means. The only thing I see in relation to that is the 'Featured Business Ideas' trying to pitch a few ideas to entrepreneurs. Personally, I don't think people step into a site without an idea and look for an idea to buy a domain for. But maybe I'm mistaken.

What I mean by that is we're going to dedicate more resources to buyers than other marketplaces. Even our name and slogan are buyer-oriented. Yes, the business idea section is part of it but there's much more to come. And I agree, most buyers will already have an idea in mind. This section is really for those who don't but are still ambitious to start a business. It just means that when it comes to allocating resources, buyers will be a higher priority because ultimately they're the ones that bring in the money.

As for the traffic comparison you made- your marketplace currently has around 300 domains. Other marketplaces have tens of thousands of domains. So expecting the traffic for each domain to be higher or equal there... isn't really fair, IMO. In fact, if anything- I would have expected the traffic to be much higher at Alter based on the fact that a person can browse your entire inventory within a few minutes at the moment.

Sure, but keep in mind that we haven't really invested much in any of those "additional" marketing channels like other marketplaces so the traffic on Alter should actually be lower, not higher. Maybe it's some of the other behind the scenes stuff we've been working on. Anyhow, regardless of the reason I don't see an issue if Alter brings more traffic to your domains. And this traffic will actually increase over time too as we ramp up our marketing efforts.

1. Visibility. You guys currently have the same domains always at the top as featured so any visitor of your site is always exposed to them first. All marketplaces shuffle listings around, so you guys should do it too. Not sure that the 'popular' setting should be the default when people reach the site. Perhaps new arrivals should be at the top.

Great point and I fully agree. We are planning to do that soon. We just wanted to showcase some of our popular listings right now to help get more sellers on board first.

2. I submitted a few domains to see if they'd be approved and for how much. 4 out of 5 were approved, all dictionary words and they were all priced very low, so I can't publish any one of them. Also, I won't mention specific names listed at Alter but there are quite a few listed brandables that are priced very high. IMO, other marketplaces would have priced them much lower. So that kinda makes me question if you guys have your pricing figured out.

We use a number of factors including the name's meaning, length, brand potential, and comparable sales to determine the price. We're looking for names that entrepreneurs can essentially build a company on. Dictionary words are tricky. Some fit this criteria really well (e.g. apple, oracle, alphabet, etc). While others don't (e.g. kicking, loudness, doubtfully, etc). As you know, a lot of this is subjective and up to the person reviewing the names so apologies if you think some of the names or prices don't make sense. I myself have seen countless names on other marketplaces where the pricing is way too low or high. Like the saying goes, one man's trash is another man's treasure.

What good is a 10% vs 30% commission when the pricing can be off to a degree where listing domains isn't worthwhile?

The pricing across all the different marketplaces will be different because they're all subjective. But most should be in the same ballpark. This is exactly why we chose to offer 10% and not 29% commission. Even with the fluctuations in pricing 10% commission still works out to be much better.

Though keep in mind other marketplaces may be inflating their prices just to get sellers on board. That's pretty dangerous in my opinion because in that scenario the marketplace wins but the seller loses. Our goal is to stay true to what we think is the domain's market value. Having a lower commission helps us achieve that too.

3. Are there "house" owned domains at Alter? Meaning, are you or the staff listing your own domains? Personally, I'm not a fan of marketplaces "competing" with sellers. BB does it and it's caused a lot of controversy in the past. It can create situations where the site owned names are or at least seem to be featured and/or selling more than sellers' names and it creates an air of general mistrust.

We do have some domains listed but we don't treat them any differently. We had to do it to get the marketplace going. Otherwise we wouldn't have any sellers at all. I think every marketplace does this and I personally don't think it's a problem unless these domains are getting special treatment. I'm not sure why sellers feel that way about BB. All things being equal, ultimately the domain's quality determines what will sell faster. Maybe the sellers who are upset only hold low quality domains? If that's the case then I don't think it's fair. Even when every seller is treated exactly the same, those that hold a low quality portfolio will always get less traffic and sales.

 

[Deven Patel]

Is normal that the font of the business card mockup goes out of the line? https://prnt.sc/ujs9ev

That's odd. What os/browser/resolution are you using?

Isn't Alter in the same situation? Noone knows about Alter so why a customer should trust more Alter than any other whitelabel marketplace?

Of course Alter is in the same position right now just like how all other marketplaces were when they first started. That will change as we grow. The major difference between Alter vs a WL marketplace right now is we have actually invested considerable amount of resources into building our business (i.e. our name is trademarked, our domain is top tier, we offer phone support, our about page has a face of the founder, etc). Can you say the same about most WL marketplaces?

Also, most WL marketplaces aren't truly white label so buyers are redirected to the original marketplace at some point in their journey (e.g. during checkout, for support, etc). When this happens they begin to feel like they're being deceived because they were prevented from checking out the domain alternatives available on the original marketplace.

Squadhelp besides direct traffic have their own way to acquire new buyers, Brandbucket has a huge buyer base with their years of work

Are you sure about that? Please see my response to SuperBrander above. I even included some data that shows you an apples-to-apples comparison between Alter and one of our major competitors.

I'm saying that direct traffic already accounts for a bulk of the traffic on these brandable marketplaces. Yet they charge an outrageous commission. My point is that the additional marketing they say they're doing can be done for much cheaper and isn't worth the extra 20%+ in commission. Of course we're going to utilize other marketing channels. There's no doubt about that!

And sure, the other brandable marketplaces have some name recognition but nowhere near enough to justify the outrageous commission they charge. Most buyers don't have a clue who they are and in the brandable domain business repeat buyers are rare so that recognition doesn't help as much as it would help a registrar like GoDaddy.

 

[SuperBrander]

@Deven Patel Thanks. No argue about the high commissions. Lower commissions are always better, so if you can deliver the same results or better- then Alter would be the better option to choose. As for the examples you gave of dictionary words- while two of the options you gave are indeed words that aren't very usable- Kicking.com is a great word and a domain that can command a mid $XX,XXX price and perhaps even higher. A popular, short and energetic word. 'Kickstart', 'Kicking Off' something, 'alive and kicking' come to mind etc. Not to mention highly applicable to the most popular sport in the world (Soccer/Football), martial arts etc. So... not a good example, IMO. Daring.com just sold for 48K.

As for your own domains included- l understand why you guys incorporated them to get things going but like I said, I'm not a fan of that. If you're transparent about it and will make sure that all domains are treated equally then it is what it is. With BB it created a lot of issues and mistrust. SH, to the best of my knowledge, only has one domain that's 100% theirs.

 

[Lord Antares]

Also, what's with the weird price tags?

$249,196
$6,602
$27,946
etc.

Why not round up or end in nines? I thought there was a science to that.

 

[Deven Patel]

@Deven Patel Thanks. No argue about the high commissions. Lower commissions are always better, so if you can deliver the same results or better- then Alter would be the better option to choose. As for the examples you gave of dictionary words- while two of the options you gave are indeed words that aren't very usable- Kicking.com is a great word and a domain that can command a mid $XX,XXX price and perhaps even higher. A popular, short and energetic word. 'Kickstart', 'Kicking Off' something, 'alive and kicking' come to mind etc. Not to mention highly applicable to the most popular sport in the world (Soccer/Football), martial arts etc. So... not a good example, IMO. Daring.com just sold for 48K.

Agreed. Regarding the appraisals, I was merely comparing the top tier names like Apple/Oracle/Alphabet to ones that are difficult to see as company names. Regarding Kicking.com, it's good but not great because it has a negative connotation but I agree with an appraisal in the low-mid $XX,XXX range. On the other hand, Daring.com is much better because of its positive connotation so the $48K sale price is justified.

Also, keep in mind that some of the historical sales you see are outliers. They don't always reflect market value. There will always be cases where a buyer is super attached to the name and is willing to pay much more than market value for it. But that means the seller has to be willing to hold on to the names for as long as it takes and shoot for the moon as they say. High risk, high reward.

 

[Deven Patel]

Also, what's with the weird price tags?

$249,196
$6,602
$27,946
etc.

Why not round up or end in nines? I thought there was a science to that.

We thought we'd try something different for a change. Sometimes it's good to mix things up.

But rest assured that if we discover this doesn't work as well, we'll definitely change it. Our goal is to make data driven decisions.

Edit: Prices have been updated.

 

[Winterburn]

"What cash out methods do you support?
We support PayPal and wire transfers for amounts larger than $5,000 USD. Once payment is requested, we'll process it within 24-72 hours. "

Please consider editing the text to make it clear that it's only the wire transfers that require a $5000 threshold. I understand it's not a big deal but at times these small things do count. Thanks.

 

[Deven Patel]

"What cash out methods do you support?
We support PayPal and wire transfers for amounts larger than $5,000 USD. Once payment is requested, we'll process it within 24-72 hours. "

Please consider editing the text to make it clear that it's only the wire transfers that require a $5000 threshold. I understand it's not a big deal but at times these small things do count. Thanks.

Good point. Changed!

 

[Embrand]

I'm not sure how you will differentiate from the other marketplaces. But it's nice to see a bit of humor on a domain marketplace: Specifying that the "dramatic office building" pictured on listings is not included in the price

 

[Pay.My.id]

Hi all,


Most new entrepreneurs don’t think twice about their company name. Our goal is to change that! A brand name literally has the power to make or break their business.

Deven

Hello Deven...

Good points to know your ambitions, you can build a smart team , the team only have one tasks : Know more and learn more about the targetted companies. Because we can't change their name when we never know about their main mission, so they would never said "who you are and why you ask us to change everything"

 

[Deven Patel]

I'm not sure how you will differentiate from the other marketplaces. But it's nice to see a bit of humor on a domain marketplace: Specifying that the "dramatic office building" pictured on listings is not included in the price

Hah, thanks! Differentiation comes in many forms. We're already differentiating on the price/commission (10% with Alter vs 30-35% elsewhere). I mean if that's not enough, we'd be happy to charge 30% and promise you the world like the rest.

 

[Deven Patel]

Hello Deven...

Good points to know your ambitions, you can build a smart team , the team only have one tasks : Know more and learn more about the targetted companies. Because we can't change their name when we never know about their main mission, so they would never said "who you are and why you ask us to change everything"

Thanks! I appreciate the compliments.