Brokering Domains - Ethics? Regulations?

[BClick]

• I'm really new to the domaining world.
• Have acquired about 60 great domains.
• In the middle of building my own domain sales website.

So I'm wondering about the ethics and legalities of brokering other people's domains.

Since my own inventory is fairly limited, I would like to add a separate section to my site, something like "Other Premium Domains." Then in that section I would offer some hand-selected domains that I do not own – but could purchase from another domainer if/when I found a buyer.

I see it as an opportunity to bolster my own "inventory" without laying out the cash up front.

Anyone have experience with this?

I do not want to cross any ethical or regulatory lines.

 

[impulse]

Why do you want to buy those domains from another domainer (after you find a buyer) instead of just brokering them? If it is to make more money on them, you could instead just structure the brokerage agreement so for example you split 50% of the sales proceeds over a certain price. Or, you could spend a small amount of money to buy an option on those domains from the seller, and then you get to keep 100% of the amount of the sale over what your option price is.

 

[bmugford]

So you are basically asking if it would be ethical to list domains other people own on your website without their permission? I think the answer is obvious. Unless you have their permission it is not ethical and could cross some legal boundaries as well.

Brad

 

[BClick]

Cool. Thanks for your thoughts, guys.

 

[S-B]

If you need ethical guidance just follow my posts then do the opposite.

 

[N-A]

So you are basically asking if it would be ethical to list domains other people own on your website without their permission? I think the answer is obvious. Unless you have their permission it is not ethical and could cross some legal boundaries as well.

Brad

I find nothing wrong listing other people's domains in a separate category that have BIN prices and are associated on marketplaces such as GoDaddy where, when and if a sale took place, a commission would be made. I wouldn't say that you're a "broker" and are associated with the sale of those names in any way. But, there's no reason that this shouldn't be allowed for as long as GoDaddy and others provide public feeds of domains they have listed. Simply change the link with your affiliate code and profit. I'm sure sellers would be more appreciative of you had you contributed to that sale...

If you need ethical guidance just follow my posts then do the opposite.

Sure

 

[N-A]

@bmugford, case in point, @Domain Shane does this weekly in his blog posts and I know others follow suit as well with "daily picks" that include affiliate links (or even donation requests). I see no claim of ownership or brokerage of these names by Shane; they're simply affiliate links that would earn him money. Why would the same principle applied to a marketplace not be ethical for as long as they may be "suggested" or "sponsored" names? Is this not how Sedo MLS was intended to work (though, you had to opt-in of course, so maybe a bad example).

See: http://domainshane.com/dsad-com-domain-shanes-daily-list-domains-auction-wednesday-september-21st/

Maybe I misunderstood you though.

 

[wwwweb]

Brad is right, if a UDRP was filed, and the basis was that the domain was offered for sale to a mark holder, and they lost the domain.

They could turn around, and come after you legally for such damages, it is a slippery slope for sure.

More than likely to happen with high value, high commission domains, as we need to face the facts, everyone is trademark happy, and common terms now carry recent marks.

 

[bmugford]

@bmugford, case in point, @Domain Shane does this weekly in his blog posts and I know others follow suit as well with "daily picks" that include affiliate links (or even donation requests). I see no claim of ownership or brokerage of these names by Shane; they're simply affiliate links that would earn him money. Why would the same principle applied to a marketplace not be ethical for as long as they may be "suggested" or "sponsored" names? Is this not how Sedo MLS was intended to work (though, you had to opt-in of course, so maybe a bad example).

See: http://domainshane.com/dsad-com-domain-shanes-daily-list-domains-auction-wednesday-september-21st/

Maybe I misunderstood you though.

The OP does not say where the listings would come from. Is he only going to post domains that are listed on major venues?

Also, is the section "Other Premium Domains" going to make it expressively clear that those are not his domains?

Brad

 

[N-A]

The OP does not say where the listings would come from. Is he only going to post domains that are listed on major venues?

Also, is the section "Other Premium Domains" going to make it expressively clear that those are not his domains?

Brad

I agree, we need more information in regards to intent for sure or we could jump hypothetical to hypothetical all day long.

 

[hxp]

Do not do this.

Not only are domain owners going to be concerned and pissed-off, but you're highly likely to ruin your own reputation.

Imagine you listed a domain for sale, and suddenly the owner decides to raise the price, or they decide its not for sale anymore. You're going to have a very angry buyer on your hands...

Instead, create a section for "Domain Acquisition". The buyer will come to you with a domain they're interested in, and you will do your best to acquire it for them. It's a much smarter and safer way of doing the same thing.

 

[Kate]

• I'm really new to the domaining world.
• Have acquired about 60 great domains.

So you say you are new, and I assume you have never sold a domain ? How can you can be sure you even have good names ?
A good broker should have experience, the ability to tell good domains from bad, and appraise their market value realistically. You need experience and insight into the market. If you don't know what kinds of domains do sell, how are you going to select domains, how do you think you will find buyers ?
I think you are trying to put the cart before the horse.

HOWEVER, there is something you can do legally and ethically. For example use the feeds available from Sedo and get referral fees on sales (if the buyer came from your site). Then you can feature domains for sale, that aren't yours. But it's not brokerage. Just referral.

 

[bobbarato]

If you need ethical guidance just follow my posts then do the opposite.

Anyone else hearing Edward Norton's voice when reading this?

BClick, if I saw someone listing / advertising my domains without permission or linking back to me, I'd assume they were scam artists.

 

[Billy Wagner]

If you need ethical guidance just follow my posts then do the opposite.

LMAO!!!!


@BClick if you're new to domaining, I would say give it at least a year to learn before you starting brokering other peoples domain names. That will give you time to learn the ropes at different registrars, what they require to transfer/push domains, how to price domains, ect.

 

[joro001]

To the OP:

I just recently had someone trying to sell one of my premium domains to the owner of the .net who also happens to be a good friend of mine and we've also done big business together. He showed me the email he received indicating this person was the broker acting on my behalf. I can't tell you how annoyed I was and told him in no uncertain terms he should not try doing this again.

I know it's not exactly what you are asking about but I would say be very careful trying to sell/broker domains that you don't own/don't have permission to sell. I hate it being done to me and i'm sure i'm not alone!

 

[BClick]

Also, is the section "Other Premium Domains" going to make it expressively clear that those are not his domains?

Yes. I used the term "Broker" above. I now prefer the term offered by HXP, "Acquisition." I have zero desire to deceive anyone. Period. So I will make it clear that my "Acquisition Domains" are not owned by me. I plan to handle it similar to the way various companies currently offer Backordering services.

...section for "Domain Acquisition"....

Yep, I like that. Your terminology is better than mine and more in line with what I have in mind.

How can you can be sure you even have good names ?
A good broker should have experience, the ability to tell good domains from bad, and appraise their market value realistically. You need experience and insight into the market. If you don't know what kinds of domains do sell, how are you going to select domains, how do you think you will find buyers ?
I think you are trying to put the cart before the horse.

HOWEVER, there is something you can do legally and ethically. For example use the feeds available from Sedo and get referral fees on sales (if the buyer came from your site). Then you can feature domains for sale, that aren't yours. But it's not brokerage. Just referral.

Good thoughts, Kate. Thank you for this. Yes, my domains are good. Some of them are actually superb. As for appraisals, I have much to learn. As for finding buyers, I have much to learn. That's not to say I know nothing or that I have zero experience ... only that I have a lot to learn. A big part of my strategy is to create a pro-grade portal to showcase my domains. Then use that as a foundation for directly contacting potential buyers. Also... thank you for the tip about SEDO's referral program. Didn't know they offered an affiliate program.

BClick, if I saw someone listing / advertising my domains without permission or linking back to me, I'd assume they were scam artists.

Very good point. Thank you.

I know it's not exactly what you are asking about but I would say be very careful trying to sell/broker domains that you don't own/don't have permission to sell. I hate it being done to me and i'm sure i'm not alone!

Noted. Thank you for your anecdote. My plan does not involve direct promotion of domains that do not belong to me. In other words, I would never email a potential client promoting someone else's domains. Instead, these 'acquisition domains' will be passive listings on my site. As in... "You may also be interested in..."

Appreciate all the help guys. I believe I've got a better plan than I did before I started this thread.

 

[gilescoley]

Welcome to NP

• • I'm really new to the domaining world.
  • Have acquired about 60 great domains.
  • In the middle of building my own domain sales website.
  So I'm wondering about the ethics and legalities of brokering other people's domains.
  
  Since my own inventory is fairly limited, I would like to add a separate section to my site, something like "Other Premium Domains." Then in that section I would offer some hand-selected domains that I do not own – but could purchase from another domainer if/when I found a buyer.
  
  I see it as an opportunity to bolster my own "inventory" without laying out the cash up front.
  
  Anyone have experience with this?
  
  I do not want to cross any ethical or regulatory lines.

Selling domains is not something you just jump into, it takes a long time to figure out what makes a name valuable and how to sell them. Its not just about making contact with a company, but about making contact with the right person, the decision maker, this is the most important bit if you want to make sales.

You say you have bought 60 great name, are these names you just hand-registered or did you buy on the aftermarket. If you hand registered these names, I can assure you they wont be great names. You have spend a decent amount these days if you want great names

Check out namebio.com and dnjournal.com, it will give you some indication on what sells

Good luck

 

[Domain Shane]

@bmugford, case in point, @Domain Shane does this weekly in his blog posts and I know others follow suit as well with "daily picks" that include affiliate links (or even donation requests). I see no claim of ownership or brokerage of these names by Shane; they're simply affiliate links that would earn him money. Why would the same principle applied to a marketplace not be ethical for as long as they may be "suggested" or "sponsored" names? Is this not how Sedo MLS was intended to work (though, you had to opt-in of course, so maybe a bad example).

See: http://domainshane.com/dsad-com-domain-shanes-daily-list-domains-auction-wednesday-september-21st/

Maybe I misunderstood you though.

Not sure if this matters or not or if I even have to. But I have the permission to list all the names on our daily list from Namejet, Godaddy, and Flippa. Yes, I am paid by each to include their names. Of course I state this in the bottom of every single post. I get to choose which names I put out of the tens of thousands of names that are up for auction. I am not told which names to list. I point this out only because its important to disclose your relationship in the sale of a domain. I make it pretty clear I am getting a cut for each name sold or being paid a general fee. i.e. I get paid for results by people that have authorized it.

 

[N-A]

Not sure if this matters or not or if I even have to. But I have the permission to list all the names on our daily list from Namejet, Godaddy, and Flippa. Yes, I am paid by each to include their names. Of course I state this in the bottom of every single post. I get to choose which names I put out of the tens of thousands of names that are up for auction. I am not told which names to list. I point this out only because its important to disclose your relationship in the sale of a domain. I make it pretty clear I am getting a cut for each name sold or being paid a general fee. i.e. I get paid for results by people that have authorized it.

Good points made.

Your blog was the only that came to mind to illustrate the fact that affiliate marketing (and in your case, very transparent) is not unethical when it comes to domain sales in this manner.

Not picking on you. Sorry if it seemed that way, again.

 

[bobbarato]

When I first saw this thread title, what popped to mind was if I were to use a domain broker to buy a domain, I would figure the broker would want the sale price to be as high as possible to maximize commission. Which is opposite of what I would want if I used a broker to sell my domain.

Yes, I know they will say "we strive to get the best possible price for our client, to build our reputation, repeat business, word of mouth...we want both sides to feel they got a good deal!"

I wonder if some domain brokers structure it so the lower the price they get for their buying client, the bigger their commission?

I wonder if there is a legal / fiduciary responsibility of a domain broker toward the client? I would be surprised if there was...

 

[bobbarato]

I find nothing wrong listing other people's domains in a separate category that have BIN prices and are associated on marketplaces such as GoDaddy where, when and if a sale took place, a commission would be made. I wouldn't say that you're a "broker" and are associated with the sale of those names in any way.

Call me slooow, but I just figured out that name.com does something like this. I use who.is which I think is run by name.com. I just looked up a domain of mine that I have listed and parked on SEDO and who.is says I can buy it now for the SEDO price + 15%.

I'm assuming name.com sees the SEDO parking name server and then looks for a BIN price. I wonder if they have a formal deal with SEDO?

So what BClick wanted to do in the opening post is kind of legit.

 

[BClick]

So what BClick wanted to do in the opening post is kind of legit.

Hi bobbarato. Thanks for your replies. Yes, my ideas are legit. It's just a matter of dotting the "i"s and crossing the "t"s so that I'm not unwittingly misleading - or stepping on someone's toes.

Uniregistry et. al. do this sort of thing allllll the time. The Registry puts out a wholesale or premium price. Then the registrar(s) pad the price however they want. Then when a sale is made, the domain is transferred from the registry - through the registrar - to the end buyer.

Not exactly a brokerage. But certainly a wholesale to retail arrangement.

Buying low and selling high... that's essentially what I'm talking about. And it's smart business to have a buyer in place before you purchase a domain (if possible). For me it's just a matter of how I'm going to pull it off. How I'm going to wrap it up. What verbiage I'm going to use.

One disadvantage we (as domainers) have is that we are individuals, not big companies. So there are potential trust issues there. When it comes to intangible assets like domain names, buyers will feel better about transacting a 5-figure sale with a big company than some guy who works out of his basement. So we have to overcome that.

And that's why I want to make sure everything is above board.

 

[equity78]

A domain investors enters into an agreement with Terms of Service in check to list their names on a website. Tracy Fogarty tried listing names she was not the broker on and that didn't go well. http://www.domaincrunch.com/you-need-to-get-permission-to-list-other-peoples-names-on-your-site/

Tracy left a comment apologizing for the listings.

You have no rights to list other people's names on your website, and you would expose yourself to potential legal liability.

An affiliate program is completely different, again all parties are agreeing to the terms of service.