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?

 

[MR Harrist]

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.

I also got sales from sedo and afternic , chinese pinyin and 4L dot us, but that kind of sales are not gonna happen everday, usually after 6 or 11 month, and if i were you I will not count on marketplace, but I use them to build trust for buyer, but that's it, I have to do outbound, if I want make more sales!
but we all know, other than sedo and afternic are not helphing our sales !

 

[Daniel Owens]

If, the marketplace included unlimited .com's for $7.45 and .net and .org's at cost plus a featured ad on the website and 10 free domains, plus a 45 day free trial then I'd signup.

 

[poweredbyme]

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.

It's correct. They are like domain retailer stores with unlimited number of domains. They also offer secure transactions for buyer and seller. If I was an end user I would look nowhere else.

A new domain marketplace can't easily compete with Afternic-sedo unless something new will be offered like bitcoin payments-payouts with escrow. Afternic-sedo have everything except bitcoin.

 

[dhyane]

I advice you make it like 7% and don't charge monthly fees. Because it will make you rich but not us.

 

[learie]

There is always room for something new. You already have three categories of people
1) Those who will give it a try
2) Those who will not give it a try
3) Those who will wait to see its progress then give it a try

 

[Haroon Basha]

I will not pay $ 30 per month, not even a single cent. While hundreds of marketplaces advertises our domain names free of charges, irrespective of number of domain names listed. Why should I pay $ 30 monthly for a new marketplace. It seems it is a greedy idea.

 

[Sirbigman]

I will not pay $ 30 per month, not even a single cent. While hundreds of marketplaces advertises our domain names free of charges, irrespective of number of domain names listed. Why should I pay $ 30 monthly for a new marketplace. It seems it is a greedy idea.

Yes, fair enough but don't cry when you sell a domain for $5k and you cash out $3k.

 

[garptrader]

End users seem to be more open to the idea of paying for website development and online marketing services but not so much for an undeveloped domain -even though it could make a great brand which would drive leads (when advertised via print, billboard or tv ads). No marketplace I am aware of couples quality domains with website development in the same package. Perhaps a solution would be $100-$500+ / month for a combo domain plus website. The developers have to be paid but some domain investors might be open to receiving monthly payments and the buyer gets a finished product rather than a mere domain (which they believe they could otherwise get for under $25).

 

[Sirbigman]

End users seem to be more open to the idea of paying for website development and online marketing services but not so much for an undeveloped domain -even though it could make a great brand which would drive leads (when advertised via print, billboard or tv ads). No marketplace I am aware of couples quality domains with website development in the same package. Perhaps a solution would be $100-$500+ / month for a combo domain plus website. The developers have to be paid but some domain investors might be open to receiving monthly payments and the buyer gets a finished product rather than a mere domain (which they believe they could otherwise get for under $25).

Sounds good but a domain's SEO value goes down once it has been developed and indexed, many people would like a clean domain.

 

[namelancer]

Sounds good but a domain's SEO value goes down once it has been developed and indexed, many people would like a clean domain.

Not necessarily so, as it'd seem from other cases, as per one buyer's reply to a letter of domain solicitation:

...We can offer 1500$ for Sentence Translator .com and we’re ready to close the deal as soon as you accept the offer. Being a new domain with no incoming links nor content we think that’s fair price.

Kind Regards...

 

[MapleDots]

Anyone listing really high end domains on a marketplace needs to weigh the cost aspect of it.

On a 250k sale the cost is $7,500 and with my lander it is NIL

Marketplaces are useful but anyone that has a high profile domain and that gives up a 20% commision on other marketplaces is basically giving up 50k on a 250k sale. I'm not sure a marketplace is worth that on a high end sale when most people that shop in that price range would visit the lander.

The OP's 3% is quite reasonable but even that is expensive at $7.5k on a 250k sale and I personally would not give that up. I think there should be a ceiling on high end sales, something like 5k or similar.

At what point should commissions be limited? I mean it's not like any new marketplace would get anywhere near sedo or godaddy exposure.

 

[namelancer]

I mean it's not like any new marketplace would get anywhere near sedo or godaddy exposure.

There is misunderstanding among respondents to this thread. The purpose of this marketplace is not so much to raise the sweepstakes flag highest in the exposure lottery alongside other reputable domain venues, as by providing visibility of the sellers' domains throiugh two mechanisms:

1. Targeting with specific keywords would-be buyers when searches are made for domains to buy (as opposed to using the keywords suitable for domain sellers on the lookout for a sale to attract them to a particular site );

2. Providing the demand - currently lacking in any other existing marketplace, except for similar circumstances of promoting domains by front-page or category/keyword placement - of a seller's undeveloped domain appearing in the search query for either exact or non-exact-match keyword as performed by the seeker/potential buyer on the pages of generic search engines.

 

[DBurn]

Hard to get a domain marketplace off the ground - we tried. With only a $2 listing fee (per domain) and 5% commission - which includes an escrow-type support, we got some listing, made some sales, but it was a lot of work for not much success. We also offered Facebook, Twitter and Instagram posts for each listing (with relevant keywords) and each domain name listing had its own landing page - linked to each social media posting. Did a PR news story, paid for some Facebook ads, etc. Just didn't get much traction.

 

[Daniel Owens]

20% commission for not paid members, or $30 a month no commission for paid members might be an idea. However, you got to prove that your platform actually sells domains rather than just advertises them. You, need to get a good rep going. Keep in mind you'll be competing with the tops cats GD, Sedo, Namepros, etc. So don't cry if you don't do well and don't be so dang greedy lol.

 

[BarryDavis]

I had a different idea for a domain business. I had an idea for a holding company for premium domains. If you have a domain you could sell the name to the holding company for cash or receive shares in the holding company. Lets say the shares are $10 per share. If you have a 3 letter dotcom lets say the market will pay $15,000. We would offer $12,000 or 1200 share. If the value of the domains in the holding company doubled in value than the shares would be worth $20. The benefit to the seller is he could sell all or part of his shares at any time. New investors could invest in premium domains one share at a time if they wanted to.

The holding company could build sites using the domains or earn revenue from pay per click etc to pay expenses and generate revenue for the holding company and share holders. There would also be revenue generated when the domain names or websites are sold.

this was the basic concept. My problem with it is that there is a large degree of judgement in determining value of domains. Some 3 letter dotcom domains aren't worth buying for $10,000 and one name sex.com was worth $13,000,000. Cars.com is valued by the owner at over $800 million. I believe a holding company like this if run properly could benefit all parties. If it were run improperly it would be a disaster.

 

[Ollie3000]

I think a monthly fee could be acceptable but unless you were offering something premium that the others don't offer, then it probably wouldn't work. That being said if the fee was like $4.99 a month and it offered good exposure for domains, I think you would get some sign ups.

 

[Kate]

However, you got to prove that your platform actually sells domains rather than just advertises them. You, need to get a good rep going.

And this is where I step in to crash the party and dispel a myth that is common among domainers

The thing is, the platform doesn't sell domains, it almost never happens. The domain sells for itself because somebody is looking for it, and is willing to pay for it. The platform merely facilitates the sale, it does not create the need. At best it is a catalyst. The success of the platform (or the lack thereof) depends a lot on the inventory. People are expecting too much from the platform, it's all about the domain, their domain. If you're not making sales it's your fault, you're the only one to blame.
If the platform has a lot of good names priced right, it will do business. But the average registrations from domainers do not meet either criteria, most of the time.
Good names sell for themselves, so paying for exposure is seldom justified.

Keep in mind you'll be competing with the tops cats GD, Sedo, Namepros, etc. So don't cry if you don't do well and don't be so dang greedy lol.

Exactly, with the exception of a few players like BB most marketplaces charge a commission on result only. No cure no pay.

I think we have too many marketplaces for domain names already.
If you persist in this idea you need to find your niche. Are you going to be a platform for resellers and compete with Bido and Cax (that I doubt are very profitable), or are you going to be a platform for end users, then you're competing against Sedo, GD and you need to offer something special that they don't.
There may be a niche for certain segments of the market like brandables but the niche is pretty much cornered.

I'm not sure but I am wondering if platforms like BB were not selling their own inventory only in the beginning, and then they started accepting third-party listings. What I mean is, they tried the concept on themselves first. I firmly believe in being your own best customer.

 

[Chris Wright]

We set up Domain Burn about 6 months ago - tried a small listing fee...

Your fee structure could've worked.
You should burn your domain and find a better hand reg.

maybe you won't want to name it "domain burn" next time

You could also get professional graphic design.

...We also offered Facebook, Twitter and Instagram posts ... a PR news story, paid for some Facebook ads...

This is called putting lipstick on a pig.

...
I'm not sure but I am wondering if platforms like BB were not selling their own inventory only in the beginning, and then they started accepting third-party listings...

Yeah, it was started as an outlet for their branding agency's extra domains.

 

[gina ferrano]

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?

Definitely not. You don't have a proven working model for starters. I for one don't want to pay $360 for your advertising budget. You're writing that off as a business expense anyway. 100 members X 360= 36k. That's income. It's an oversaturated market as it is. If your only differentiator is 3% commission that won't be enough.

 

[DAN.COM]

That's purely for advertising costs to solve the traffic problem.Show attachment 84646

Quite a few people are searching for this keyword alone.

The search volume is quite low. We explored those channels, they're not that interesting.

Also, take into account when you charge a low commission of 3% that you need to build some buffer for chargebacks etc. The commission also seems to be too slim to be able to fund the further development of the platform.

I'd advice to start simple, build an MVP and start collecting data and gain experience. You might then spot a good position in the market. That's the best way to collect feedback as well. If you board (paying) customers that will be your validation that you're on the right track.

Good luck!

 

[DAN.COM]

It has to do with results and traffic. Places like undeveloped.com offer all these services but have about zero traffic as far as people actually going to the site to search for domains, versus places like domainagents, sedo and afternic that gets tons of searches and traffic.

If you have traffic, people will pay you, if not - no.

Do you have a new mission in life? Which is to talk negatively about Undeveloped? As far as I know, we've never met, shaken hands or done business but you're always very vocal about Undeveloped.

You've never operated a marketplace and especially not a successful one. Try operating one, then we'll talk again.

Meanwhile, Undeveloped has grown with 140% in Q1 of 2018 alone by doing it the right way but still you have to include Undeveloped in all your posts in a negative sense and you keep spreading nonsense about us...

 

[xynames]

undeveloped doesn't market your domains at all.

I know exactly how much traffic they are getting, 3k unique on a good month. I don't know how much email and direct traffic but the organic traffic is around 3k.

I'm just telling it like it is, just like others here.

"Spreading nonsense" means - telling lies? What lies have I told.

Undeveloped has almost no traffic to speak of with people searching for domains. The sales at Undeveloped come from people landing directly on the domain, which they would anyway if the seller had his own landing page. Are these nonsense? You owe me an apology and retraction, unless what I have stated and Sirbigman has stated are untrue.

 

[DAN.COM]

Show attachment 85101

I'm just telling it like it is, just like others here.

"Spreading nonsense" means - telling lies? What lies have I told.

Undeveloped has almost no traffic to speak of with people searching for domains. The sales at Undeveloped come from people landing directly on the domain, which they would anyway if the seller had his own landing page. Are these nonsense? You owe me an apology and retraction, unless what I have stated and Sirbigman has stated are untrue.

Coincidentally, weekly I come across the same references from you about Undeveloped. The same you also shared in our review thread to which I replied extensively.

If it was once or twice I wouldn’t even have noticed it but its always you as if you’re on a mission to always include us in a negative sense.

What you’re now saying again is false again. Undeveloped brings in 1,7M uniques a month. As we grow our channels more and more non-parked names are also selling due to the continuous improvements we implement to drive more liquidity on our market.

Even though sites like Similarweb don't have 100% accurate data just look at the traffic trend: https://www.similarweb.com/website/undeveloped.com#overview

And that's why I react the way I do on your posts. I have an allergy to people spreading information that's false about Undeveloped. I'm sorry if I don't sound friendly but I'm just reacting to your actions.

You have zero insights about the sales on our marketplace and how they are closed but still act as if you do. That's what keeps bothering me about your posts about us. That's it.

 

[namelancer]

You should burn your domain and find a better hand reg.

MercyMe - Burn Baby Burn

 

[IMEZI]

Yes, fair enough but don't cry when you sell a domain for $5k and you cash out $3k.

your analogy were quite cruel LOL $2K is 40% out of $5K