Domain Marketplace 3% commission?

[Sirbigman]

Hi NP,

Me and my team are thinking of getting a new domain marketplace (ie. Undeveloped, Brandbucket, Brandpa) which would work in the favour of the seller and buyer by charging a small fee of 3% per sale with escrow fees included. The marketplace would be very simple but effective, user account for buyers and sellers, auctions and websites for sale. To keep the scammers away we would verify each seller and a monthly fee of $30 would be required. My company would use those money to advertise the website in Google AdWords.

The golden question is, would you sign up for something like that?

 

[BrandMart]

Absolutely a valid point

However...

The monthly charge is for the whole portfolio and your calculation is based on one domain.

At least I would hope that is the case because on a thousand domains the costs come down exponentially.

Agreed. But the OP hasn't been specific. He just said, $30/month/seller. I get 100 sellers, I raise $3000. How many domains allowed? Unlimited or is there some catch on the domain listing too? The whole proposal needs a lot of work and proper flowchart + budgeting.

 

[namelancer]

Did he mention that the monthly fee is not per domain but per account and an account can list unlimited domains within that monthly fee?

Yes, of course, and I am attempting to present the whole body of evidence by serving the re-warmed pudding served on the same plate:

To keep the scammers away we would verify each seller and a monthly fee of $30 would be required.

As much as I would like to give everything for free, the costs of advertising can be quite high, I'm thinking 100 members per month, $3k in advertising budget, it would really help with exposure.

Especially when you combine both of these statements, all the shadows of ambiguity disappear in the clarity of the impled conclusions that can be drawn from them.

 

[Sirbigman]

Yes, of course, and I am attempting to present the whole body of evidence by serving the re-warmed pudding served on the same plate:





Especially when you combine both of these statements, all the shadows of ambiguity disappear in the clarity of the impled conclusions that can be drawn from them.

Sorry for making things slightly unclear. The $30 per month would be per seller account. The amount of domains would be unlimited. Also a portfolio page for each seller would be provided, domain parking with contact form and buy/make offer option. I hope this makes it a little bit clearer. I would like to mention also that all the features and conditions are based on research and focused on affordability and low commission sales. The system would be designed in a way that would require very little maintenance apart from the verification process which would have to be done manually for each seller.

 

[namelancer]

It's good that you are defending his cause. His idea is noble, but details wayward. Did you go thru the replies in this thread or just replied to what you saw on page 3?

I made my point there. What's unique in your business model? What's his answer? see below.

Assunmptions, assumptions...

I was defending the right of the reality not to be undistorted, ie a wrong perception of the monthly fee to be paid per domain, rather than the business model itself. Personally I don't believe that the idea of paid listings, albeit unlimited, would fly with either high or low-flying domainers.

 

[DomainRecap]

The only way to make this work is the Flippa method of offering free entrance and listing, but then trying to upsell virtually every other service or option imaginable.

 

[ET76]

Hi NP,

Me and my team are thinking of getting a new domain marketplace (ie. Undeveloped, Brandbucket, Brandpa) which would work in the favour of the seller and buyer by charging a small fee of 3% per sale with escrow fees included. The marketplace would be very simple but effective, user account for buyers and sellers, auctions and websites for sale. To keep the scammers away we would verify each seller and a monthly fee of $30 would be required. My company would use those money to advertise the website in Google AdWords.

The golden question is, would you sign up for something like that?

No thanks

 

[Sirbigman]

The only way to make this work is the Flippa method of offering free entrance and listing, but then trying to upsell virtually every other service or option imaginable.

Upselling is annoying, I would prefer to have my domains randomly listed on the front page even if it's only a few minutes per day. I understand paying to send a newsletter to all the members but a reasonable price of - let's say $50. Anyway, this is something that should be a game changer, not a copy of flippa or sedo. Something fresh and innovative.

 

[BrandMart]

Sorry for making things slightly unclear. The $30 per month would be per seller account. The amount of domains would be unlimited. Also a portfolio page for each seller would be provided, domain parking with contact form and buy/make offer option. I hope this makes it a little bit clearer. I would like to mention also that all the features and conditions are based on research and focused on affordability and low commission sales. The system would be designed in a way that would require very little maintenance apart from the verification process which would have to be done manually for each seller.

Thank you for clearer details. Good luck with your project.

Assunmptions, assumptions...

I was defending the right of the reality not to be undistorted, ie a wrong perception of the monthly fee to be paid per domain, rather than the business model itself. Personally I don't believe that the idea of paid listings, albeit unlimited, would fly with either high or low-flying domainers.

No one has a wrong perception. If the details are not to the point, assumptions can be unlimited. Maybe his project is worth looking into. Maybe he can actually deliver sales and the basic model will work, but without clear points and plans, it's just another small domain listing site with no real value.

 

[BrandMart]

Upselling is annoying, I would prefer to have my domains randomly listed on the front page even if it's only a few minutes per day. I understand paying to send a newsletter to all the members but a reasonable price of - let's say $50. Anyway, this is something that should be a game changer, not a copy of flippa or sedo. Something fresh and innovative.

That might actually work in your favor. SEO/Adwords will take a toll and low investments aren't enough to get your portal on Page 1 of Google.

 

[namelancer]

No one has a wrong perception. If the details are not to the point, assumptions can be unlimited.

By 'assumptions' I meant to accentuate your automatic assumption that just because I tried to bring clarity into the meaning of a monthly fee it implied I was also defending the OP's business model, which wasn't the case at all.

 

[Sirbigman]

Thank you for clearer details. Good luck with your project.



No one has a wrong perception. If the details are not to the point, assumptions can be unlimited. Maybe his project is worth looking into. Maybe he can actually deliver sales and the basic model will work, but without clear points and plans, it's just another small domain listing site with no real value.

Thank you, I'm not sure if this will ever become reality. Scepticism is expected when it comes to something that's not tangible, people will say that it's impossible, it has been done already, it won't work etc. The only way a marketplace like that would work is if the right research would be made using previous experiences and long-term knowledge from people who have been doing this efficiently, people like you. It's very ambitious but I think it can work.

 

[namelancer]

No one has a wrong perception. If the details are not to the point, assumptions can be unlimited.

Imagine a dialogue:

-Shall we go on a fishing trip this weekend to a destination x ?
-What was caught there last week by our fellow fishermen friends ?
-Not much, just some small fish.
- Oh, so then there is no big fish to fry ? Forget it, I'm not going

 

[BrandMart]

Imagine a dialogue:

-Shall we go on a fishing trip this weekend ?
-What was caught last week ?
-Not much, just some small fish.
- Oh, so is no big fish to fry then there ? Then, I'm not going

lol.. i know what you are getting to.. I'll better buy a lobster then.

New ideas have to face the criticism to improve. I hope @Sirbigman takes all the info and maximizes his projects' potential.

 

[tupungato]

$360 annual fee even if I don't sell anything? No, thank you. MAYBE $50 might be acceptable, assuming you already have presence and customer base.

 

[Anjani]

I guess most would have no problem paying if someone takes the onus of doing outbound sales. At this point in time it's no less than a miracle when a sale takes place even on established platforms like godaddy, sedo etc. There is no differentiation in service

 

[xynames]

Here's someone already doing it for 0% commission, and $1. - $2. per month.
https://www.basdn.com/

 

[Sirbigman]

Here's someone already doing it for 0% commission, and $1. - $2. per month.
https://www.basdn.com/

That website has some issues.

Looks like a codecanyon style script built on lavarel.

 

[Ategy]

To me it was fairly clear based on discussion it was $30 per account.

That being said .. where I have a problem is that if I have 1000 domains and most others have about 50 .. then that's amazing for me .. the others are subsidising my domains being advertised. At the same time .. if several people adds 10,000 domains .. then my $30 no longer becomes worth it as my names get lost in the crowd ... much how BrandBucket might have been good when it started .. but now they have tens of thousands of domains and paying to get listed there is just bad math!

Honestly .. a straight commission would be the best in my opinion.

What you're talking about could be cool if you had a small number of similar domainers who wanted to start their own thing and share the costs .. but a payment structure would be needed to keep things fair. Either be sure everyone had the same number of domains .. or adjust the payments per domain .. or simply be sure visibility were equal (if I have 1000 and someone else has only 100 .. then each of their domains would show up 10x more than mine so that total impressions were equal!

 

[Kate]

Very bad idea. No domainers are going to pay to subsidize a new, non-established platform.
Even BB doesn't charge recurring fees.
And I thought we already have too many venues.

In fact it doesn't really matter where you list your names. If you have names that people are looking for, then they will find you. The marketplace is just a facilitator. On its own it seldom brings an interested party to your domains, if the need isn't already there.

 

[DBurn]

Yet everyone complains about the 15%-20% commissions on the big marketplaces. If a domain auction site can have a slimmer margin with a lower overhead, with only a 5% commission with a small listing fee (to keep it from getting flooded with poor names), don't you think domainers would like this approach? Oh, and the 5% fee includes an escrow-type assistance in the transfer of money and domains.

 

[garptrader]

Domain investors are willing to pay a commission on a sale. Yes, they want to keep as much of the sale as possible, but they are hesitant to increase portfolio administration costs with little assurance those costs will increase sales (monthly fees). The problem with using Adwords to drive marketplace traffic is that the vast majority of individuals looking to buy a domain view a domain purchase as a $10-$50 expenditure. Most domain investors have their inventory priced $500-$5000 or higher. How do you drive traffic to a website where the seller is looking for $5000? Perhaps in the ad text you could state premium-quality domains but then the marketplace might have to place restrictions on sellers who want to list new TLDs, alt TLDs, hyphenated domains, recent handregs, etc.. Perhaps a premium marketplace would have to limit the number of domains a seller could list so that they would only list their best inventory - by default reducing the number of low-quality listings.

 

[briguy]

Hi NP,

Me and my team are thinking of getting a new domain marketplace (ie. Undeveloped, Brandbucket, Brandpa) which would work in the favour of the seller and buyer by charging a small fee of 3% per sale with escrow fees included. The marketplace would be very simple but effective, user account for buyers and sellers, auctions and websites for sale. To keep the scammers away we would verify each seller and a monthly fee of $30 would be required. My company would use those money to advertise the website in Google AdWords.

The golden question is, would you sign up for something like that?

You will have to crunch the numbers with my suggestion..

(a) Raise your fee per sale with escrow fee included ..
(b) Offer free membership to a limited number of people (250 for example)
(c) Use a minimal yearly fee ..

or Find a "angel" (investor) that will finance you till profitable, you will have to negotiate a sweet deal to get this person involved..

 

[MR Harrist]

just suggestion! before you jump to any biz, try to be one of them! or be like them! so you can understand where the problems is ! if you can solved the problems and have good solution , most of the time, you'll get money a lot! not only $30 , I am not saying $30 to low!

but it seem you don't understand where the problems is ! and most(some) domainer know, Marketplace don't do anything! they not helping to make sales! because we know, sales happen from type in traffic(direct traffic)! so basically domainer don't need marketplace! but to avoid chargeback, or paypal refund, domainer use 3rd party to handle that isue!

so the question is why we have to pay $30 if you do nothing Even The World's Largest Registrar Cant do anything about domain sales! btw I already pay them 19.99 for some of my domain! if you can help with domain sales! trust me! thousands domainer will pay more than $30 every single day! not only month!
the question is can you do better than godaddy ?

and remember most people in here selling non seo domain! but I am sure you already know about that!

 

[Kate]

Yet everyone complains about the 15%-20% commissions on the big marketplaces. If a domain auction site can have a slimmer margin with a lower overhead, with only a 5% commission with a small listing fee (to keep it from getting flooded with poor names), don't you think domainers would like this approach? Oh, and the 5% fee includes an escrow-type assistance in the transfer of money and domains.

I think the answer is obvious, it's not profitable.

For instance you could sell names on Ebay, and you will pay less in fees because for Ebay the process is automated: you will be dealing directly with your buyer. So they can afford to charge a small fee. Ebay will only get involved if there is a dispute.

On the other hand if you want to provide transfer assistance like Sedo does, you will spend a lot of time with inexperienced buyers, difficult registrars sometimes, and EPP codes that never arrive because of some spam issues. And some ccTLDs may involve paperwork or a different process, if you are not already familiar with it, you are going to take time to figure it out.

That's why Sedo charge a minimum of $60, and this is for mainstream extensions. Exotic or not so exotic TLDs cost more (something like $150 if I remember correctly). They used to charge 10% with a minimum of just $6 years ago... clearly not profitable for low-value sales.

So again, the OP should think carefully about what kind of service he intends to offer for 3% and what minimum amounts would apply. Buy paying just for the privilege of listing a name is not a value proposition.

 

[domeen]

domainer know, Marketplace don't do anything! they not helping to make sales! because we know, sales happen from type in traffic(direct traffic)! so basically domainer don't need marketplace! but to avoid chargeback, or paypal refund, domainer use 3rd party to handle that isue!

That's where you are wrong! These days most end-users come directly from registrars! That's a fact! Who has most connections is the winner! Like Aternic and maybe also Sedo. I gladly pay the 20% for the service. It's a business expense. I have had sales where the parking page has 10% off the price that its sold via the registrar. End-user doesn't even visit the parking page.
You can add domains to afternic and sedo and activate Fast transfers. Other marketplaces are not even worth time adding domains to them.