NameSilo

Broker Commissions and the extra mile

Labeled as discuss in Domain Selling and Domain Sales started by ThatNameGuy, Oct 19, 2019.

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  1. ThatNameGuy

    ThatNameGuy Upgraded Member Gold Account VIP

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    I've started and been active in quite a few different businesses and industries in my life, but the domain business really mystifies me. The business I'm most experienced with is the debt recovery and collection business. I started a company called Credit Control Corporation in Virginia in 1973 and operated it for about 15 years when I sold it (note, it's still in business today generating 10M annually in commission/fee revenue). Not all, but most collection businesses operate on a "commission" and the last time I checked I think the "average" commission paid is around 30% of dollars collected, but the fee varied based on different criteria like the age of the debt, the amount/size of the debt and the kind of debt ie. medical, retail, financial.

    Today I saw on NP where New.Life sold two domains in one day for $63,000 (Congrats New.Life if you're reading this.) The first domain he (his broker) sold for $38,000, and he paid Uniregistry a commission of 10% or $3,800. The second domain he sold for $25,000, and paid Afternic a commission of $4,000 or 16%. My initial thoughts to commissions like this are, wow that's really cheap, no wonder domainers/brokers only sell 1-2% of their portfolios annually, and why I'm reluctant to work with a broker at all.

    Now more to the point, I'd gladly pay a commission of 25 to 50% of a domain sale "if" a broker could liquidate 5-10% of my domains annually. It doesn't seem unreasonable to me, if I were to list 10 food and beverage domains with a broker who understands that industry for them to sell one in ten. For example, I just registered a couple of domains; TopNotchWines.com (note that Elliot Silver owns a business called TopNotchDomains.com) I say this because I'm sure it will add credibility to my reputation here on NP for "crappy" domains:xf.rolleyes:, and shortly after I reg'd that, I reg'd TipsyLiquors.com because I always wanted to own a liquor store, and I know that's a pretty "catchy" name as well:xf.grin:

    My question is this, why aren't there any brokers in this industry who will go the extra mile to sell domains like I went the extra mile in the debt recovery business to collect my clients debts? My clients gladly paid me my commissions:xf.smile: because they knew the alternative was little or nothing returns:xf.frown:

    Any brokers out there reading this, I want to hear from you. What gives??? Anyone else care to opine?
     
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  2. bmugford

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

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    Brokers are not miracle workers. It is hard to create demand where it doesn't naturally exist.
    Their time is better used on high quality domains and liquid assets.

    Brad
     
  3. Jurgen Wolf

    Jurgen Wolf Top Member VIP ★★★★★★★★★★

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  4. BaileyUK

    BaileyUK Top Member VIP

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    One day my ol'mucker you'll come to realize this Domain Game is not for you. You seem to want to constantly apply 1970's business values to today internet world. In your day a customer just needed to know your location, business type and telephone number to conduct any kind of transaction. Even the name of the business was probably irrelevant unless it was a national (multi location) enterprise. Sure back then reputation carried more value than a Super-duper Business name than in today's internet world.

    I do find your posts entertaining as you fire-off in all directions looking for some sort of unification of your old business concepts in today's big online world. But your never going to find it. Or indeed any sort of resolution to your beliefs that your next 'Big Thing' is anything more than a fanciful dream. I am surprised that you don't show a better analytical mind

    To be making some of the Comparisons, you feel apply, seems to me to be on the borderline of loss of mind or certainly reality (I didn't want to use that single D word)

    Dreamers are 'Two a Penny' As we say in the UK. And why not dream away (At 64 myself I certainly do) But I do try to keep reality of the real world separate
    Keep taking the pills ;)
     
    Last edited: Oct 20, 2019
  5. namemarket

    namemarket Top Member VIP ★★★★★★★★★★

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    There's a huge difference in that by going the extra mile on debt recovery and a lot of other jobs you will with little doubt get more sales however by going the extra mile to sell domains it will be very unlikely to make any difference.

    The reason is you can only sell the domain if there is a real end-user demand for the name and you run across with help of luck finding that rare buyer but hard work will always payoff collecting debts because there's always going to be a fair percentage of people you can find and who will pay.

    IMO, you can offer brokers 50% or more and not hire a broker unless your names are rare top-tier quality.
     
    Last edited: Oct 20, 2019
  6. ThatNameGuy

    ThatNameGuy Upgraded Member Gold Account VIP

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    BaileyUK...i just luv it when someone uses false, unfounded, and misleading rhetoric to TRY and tell me I can't do something:xf.rolleyes: I'm currently in the process of revolutionizing, reinventing and modernizing "GOLF", for which I own domains like RevolutionizeGolf.com, ReInventGolf.com and ModernizeGolf.com. I absolutely LOVE it when people like you tell me I can't do something. Well, I have news for you Bailey, I'm doing it as we speak so stay tuned:xf.wink:

    Now moving back to the domain industry. Trust me Bailey, I have a TOP NOTCH analytical mind else I wouldn't be looking to apply analytic's that are working "today" for one industry to another industry. Artificial Intelligence also known in the tech industry as AI is a tool that I know can be used to identify prospects for my domains whether they're Healthcare Domains, Food and Beverage Domains, Financial Services Domains, Trades (homes, realty etc.) Domains etc. Apparently you don't seem to think that graduates of culinary schools, engineers of all kinds getting degrees today won't be going into business for themselves, or healthcare professionals and lawyers for that matter don't have a need for domain names today or sometime in the future?

    Finally, you and others make the domain industry out to be "Different" or "Special" compared to other industries. Hint, the domain industry isn't that different or that special:xf.rolleyes: I sort of figured my thread would bring a lot of my critics out of the closet, and like one of my domains BetheBait.com, it was successful:xf.grin: Thanks for participating in my experiment Bailey...you're a good 'ol chap(y)
     
  7. ThatNameGuy

    ThatNameGuy Upgraded Member Gold Account VIP

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    To say domains won't sell regardless of commissions paid "unless your names are rare top-tier quality" is total BUNK imho. You mean to tell me the average "end user" knows the difference between what might be a good domain name for his/her business and a "top-tier quality" domain?....and ONLY THEN might they pay top dollar?

    Really, I still haven't heard from a broker yet worth their salt that doesn't understand my concept. Come on Sedo, Afternic, Uni, NameJet, Media Options...get some balls and speak up. The 1-2% sell through rate is DEPLORABLE and you know it. I'm even asking my buddy Rob Monster of Epik to address this issue because it's way too important to just sweep under the rug:xf.rolleyes:
     
  8. Bob Hawkes

    Bob Hawkes formerly MetBob NameTalent Gold Account VIP Trusted Blogger

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    We don''t really know the backstory on this in terms of whether Afternic and Uniregistry did a lot of work with the clients who eventually bought them at the BIN prices, or if they simply got a commission for the listing essentially. It sometimes works both ways.

    In terms of why there are not mainstream brokers who will handle lower value sales or that would handle a portfolio seeking a higher sell-through rate, I think it mainly has to do with the fact that they need enough return to make their return on work worthwhile. I do think, there is a possible place for a domain market that will make even smaller commissions but sell at a higher rate, and in a way even in the few years I have been on NamePros it seems to me that we are edging down commission wise.

    The brrandable marketplaces charge higher commissions, but they seem to have slightly edged up the rate of sales (although that is probably due to being selective in what they will list). But I think it is partly that they thought like an end user. They provide attractive marketplaces, where there has been at least some oversight of the names to rule out obvious TM issues etc., and the pricing is at least somewhat more consistent from name to name (I don't mean equal, but you don''t have someone asking $500,000 for a junk domain beside someone asking $500 for a decent domain name, which is an issue on the mass marketplaces). Despite the commissions, when I looked at their numbers, they seemed to be domainer profitable (disclosure: I have never listed or even tried to list a domain on a brandable marketplace, just looking at it from the outside).

    Now I think there might be a model for something we don't really have in this industry. I am wondering if there is space for something along the line of a used car superstore. People, whether domainers or not, could come to them with unexpired domain names and see what they would offer for them. The place would keep and sell some themselves on an economy marketplace, move some to other platforms (just as the used car places do) and probably auction off some. Yes, they would offer low prices, but they would give an opportunity for those wanting to get out of the business. Rather than most of prime names going through the current expired auction process, it would offer another option. Small businesses might be more willing to buy an aftermarket domain name if they knew there was a place like this they could easily sell it and get something back if they later no longer need the domain name.

    Bob
     
  9. xynames

    xynames XYNames.com PRO VIP

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    Interesting - 10% at Uniregistry and 16% at Afternic aren’t their usual commissions. I saw that thread about the $63K in off brand extensions sold in one day didn’t bother to comment.
     
  10. NameDeck

    NameDeck Design. Develop. Deploy. VIP

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    Try giving your broker a monetary incentive to do better if you trust them enough. Say you want 10K for a name, paying 10% commission. Offer him a high(er) % over the amount that exceeds 10K. Like 20% over everything that exceeds 10K up to 12K, 30% over everything that exceeds 12K up to 14K, etc.
     
  11. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    10% is Uniregistry commission for placing a landing page with bin price, no broker involvement. Someone simply comes and hits the bin and checkouts. Not a bad commission for checking out a customer .

    For afternic it is a blended commission for a higher sale price, rather tha the typical
    20%.

    Given their is no real world physical inventory, and all paperwork is electronic, and a broker does not have to drive to a open house, or provide physical security of inventory of an item, the commissions in this industry are typically very high compared to other brick, and mortar industries.

    As for debt collection, 30% is seriously aged uncollectable debt, and most likely unrecoverable, that debt is usually sold upfront for a % of what’s owing. You can’t compare such industries. I believe inventory 1-2 years aged is probably sold for much less pennies on the dollar. The majority of such debts are medical bills which people probably put on payments and defaulted as they probably can’t afford to live, and pay such an enormous debt at the same time. Most likely headed to bankruptcy, unless thru can negotiate something given they have bought it for pennies on the dollar, any full payment can be a 10x return, or a settlement can be a double.

    Maybe try using real estate, or auction house comparisons.
     
    Last edited: Oct 20, 2019
  12. Mister Funsky

    Mister Funsky Top Member VIP

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    Well said.
     
  13. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    I feel it when I see people paying 30% on some of these exchanges. Commissions used to be much lower back in the day, around 10%, as domain prices, and sales increased so did commission rates, should
    have gone the opposite way, especially with the engagement of better technology.
     
  14. ThatNameGuy

    ThatNameGuy Upgraded Member Gold Account VIP

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    That would only work "if" the broker agreed to "go the extra mile" in order to deserve the greater commission. In the debt collection business, in order to collect/recover the debt where I earned 50%, I would need to typically spend more $$$. The same would be true of brokers in the domain industry. Like I said earlier, I don't see brokers even trying to sell more domains on behalf of their clients.

    You have the right idea NameDeck, but I don't see brokers wanting to increase domain liquidation even if they could at a higher commission. There has to be something psychological, criminal or simply unethical behind their reluctance to even try to liquidate more domains even at a higher rate:xf.rolleyes:
     
  15. xynames

    xynames XYNames.com PRO VIP

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    How is paying 10% for a landing page and payment processing at Uniregistry “not a bad commission.” That’s absurd. Worse than DAN at 9%.

    My own landing page plus escrow.com is under 1% all paid by the buyer which equals zero for me. There are ways to implement BIN checkout on a landing page via escrow.com (platform API) too.

    You talk like you think that having your landing page at one spot versus another results in any difference whatsoever in terms of landing page exposure or traffic.


    Paying 20% for full brokerage help is one thing. Paying 10% for next to nothing is another.

    As far as the tiered thing at Afternic I sold a domain there not long ago for $20,000. and received $16,750. I guess it goes lower % above that; you are right there.
     
    Last edited: Oct 20, 2019
  16. ThatNameGuy

    ThatNameGuy Upgraded Member Gold Account VIP

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    Glad you mentioned that debt collection for a fee of 30% is seriously aged uncollectable debt. In order to collect that debt and earn a 30% commission, a professional debt collector generally collects/recovers 15% of the debt as compared a to domain broker collection/recovering 1-2%. I know it's hard for you to see the correlation, but it's perfectly clear to me. Question? Would your rather pay a 10% commission to a broker who sells 2% of your domains annually, or pay a 30% commission for a broker who sells 4% of your domains annually? Just do the math, and you'll see what I'm saying.
     
  17. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    Ha ha meant not a bad commission for the house.
     
  18. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    Thing is brokers cherry pick inventory, high quality domains have a better chance of selling based on a willing seller.

    They are not taking those 1-2% sell thru type names unless you are giving them a golden nugget within it, or you have a high quality portfolio they want access too.

    Let me spell it out for anyone here, if you can pick up a phone, and have meaningful conversation with someone, and know, and can provide a reason someone would want your domain you can be a broker also.
     
  19. ThatNameGuy

    ThatNameGuy Upgraded Member Gold Account VIP

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    Bob...my point is a broker to sell more domains, more likely than not needs to be paid a higher commission, not a lower commission. Lets say for example you own a portfolio of 100 domains whose "average" value is $1,000 per domain. Your portfolio value is 100K, and "if" you paid your broker a 10% commission and he sold 2% of your domains this year, he would net $200 or 10% of $2,000 in commission, and you would net $1,800. Now lets say your broker was paid a 30% commission, and as a result was able to sell 4% of your domains instead of just 2%. Your broker than would net $1,200 in commission and you would net back $2,800. Make sense? My point is, the additional commission you pay your broker nets you back an additional 40%, $2,800(y) vs. $1,800(n)
     
  20. ThatNameGuy

    ThatNameGuy Upgraded Member Gold Account VIP

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    In all due respect, I disagree that a broker worth his/her salt can sell more domains "if" they were to employ things like artificial intelligence to increase sales to specific industries. Note, many "end users" in industries like healthcare, financial services, and food and beverage hardly know this industry even exists....they don't know what they don't know, and it's up to us and brokers to teach them(y)
     
  21. ThatNameGuy

    ThatNameGuy Upgraded Member Gold Account VIP

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    Regardless of the way commissions are going, we both agree that domain sales should be better due to technology and AI, but they're NOT. Why?
     
  22. New.Life

    New.Life THE.COMPANY

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    To clarify a bit:

    New.Work - was sold at $38,000 BIN price. No broker was involved.
    They have a 10% commission for this. If this is not a large amount of money, and the buyer pays for example with a debit/credit card, then everything happens automatically within a few seconds or a couple of minutes.

    In this case, because the sum of money is relatively large, the Buy-It-Now Support team / Transfer Specialist worked a little with the buyer and asked some questions to verify the buyer's identity.

    ---------------------------------------------------

    All.Life - was sold at $25,000 BIN price. Probably the buyer made an offer to buy on some Afternic network website, that's why at first I received an automatic Afternic price request, when the broker sent me a message, I replied:

    123.png
    If I knew who the buyer is (!) then I would not be shy to send $50K BIN. :) That's for sure!

    For the Company with:

    123a.png

    it is almost nothing.

    their commission for this sale is calculated like this: "$25,000 and over $4,000 +10% of amount over $25k."

    Thanks to both domain markets! ...and thank me for paying them $7,800 :)

    There will be even more to come!
     
  23. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    People with good domains, are making sales at decent prices. You see on a daily basis a crappy domain sell that makes us all shake our head for crazy amounts.

    Gtlds have given consumers many options that they don’t need to dip into the aftermarket during the hobby, or startup stage.

    You really need a diverse targeted portfolio to stay in the game, aftermarket prices being at record highs doesn’t help, nor does the fact that Huge Domains bot pushes the bid up on every domain.

    If I had to start over, and build my portfolio starting today I don’t think I would make it very far as the cost of acquiring good inventory is way to expensive which is going to lead to lower sell thru rates based on higher asking prices.
     
  24. xynames

    xynames XYNames.com PRO VIP

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    Given that Bulloney/That Name Guy started this thread and is questioning the entire domain industry - fair enough maybe he has some points - I think it on topic enough to question the questioner, as in - how does one join NP now two years ago and remain “Restricted” the entire time?
    [​IMG]
    [​IMG]
     
    Last edited: Oct 20, 2019
  25. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    Uniregistry credit card payments are capped at $5K. Agreed accepting that payment might require a phone call, and payment/id verification. Given the sale amount, you had the margin to not even blink at the commission.
     

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