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Domain name sale business models

Labeled as discuss in Domain Selling and Domain Sales, started by abstractdomainer, May 24, 2020

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  1. abstractdomainer

    abstractdomainer Upgraded Member Gold Account

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    Here are some kind of deals that can be made when selling a domain name:

    1) Domain Sale for money - Buyer pays the complete selling price and you transfer the domain. Example, you both agreed on a deal of $2000. The buyers pays $2000 and you transfer the domain.

    2) Monthly/Quarterly payouts - Buyer doesn't pay the complete amount upfront. Instead, the whole amount is broken down into part-payments. Example, you sell a domain name for $2000. Buyer pays $200 for the next 10 months, at the end of which he gets the domain. Until them, you forward the domain to their website.
    Another example here is a downpayment plus a monthly pay. For example, buyer pays $1000 upfront and the rest $1000 is paid at 4-installments of $250 each, quarterly.

    3) Domain leasing - The domain is not sold. Someone uses your domain name and pays monthly/quarterly for the domain. Example, a deal for a domain name leasing for 1 year is $2400. Buyer pays $200 monthly or $2400 for one year lease.

    4) Percentage deal - Someone trying to purchase a domain name offers you a share of their company (the one to be hosted on this domain or a parent company. Example, someone offers you 10% of their company is return for the domain name deal.

    Which all model have you used in your domaining career so far. You can comment the number (1 or 1,3 or 1,2) etc.
    If you wish to share the story as well, you are most welcome, especially if it's anything other than 1.
     
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  2. lock

    lock DomainUsed.com VIP

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    1 to save everyone posting.
     
  3. Samer

    Samer Top Contributor VIP Blue Account

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  4. karmaco

    karmaco Top Contributor VIP

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    1 and 2. Number 2 is good for a steady stream of monthly cash. Have 2 going on through payments right now. Would only go this route for high ticket sales though. Not interested in 3 or 4.
     
    Last edited: May 24, 2020
  5. Sutruk

    Sutruk Established Member

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    Although almost all of us are doing number 1, in my opinion, and to the right company, number 4 is the best, hands down.
     
    Last edited: May 24, 2020
  6. Ategy

    Ategy NameCult.com VIP Gold Account

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    The only answers are to do:

    A) Whichever makes the most money. or
    B) Whichever makes most sense.

    As such all my deals so far have been cash up font. But I'm not opposed to doing a "Payment Plan" (#2) if it means making more money because the buyer did not have the budget right away.

    Leasing sounds good. But I would never refuse other types of deals because the super-majority of companies will want to own their domain. Sticking to ONLY leasing will lose you a lot of money in the long term. But I wouldn't say no to it if that's what the buyer wanted.

    Percentage deal sounds nice. And you could get lucky. But remember that most start-ups never make money .. and partnerships and partnership agreements can be a huge pain in the butt.


    Domains are very unique and can be very different from each other. In turn so are the potential buyers for domains. The key is to have a good read on your prospect and be flexible and observant enough to figure out which option will most maximise the return on your original investment.
     
  7. Pazu

    Pazu Established Member

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    1 and 2 have had success for me.

    Though I have not had any takers yet, I now offer 3 on a percentage of my names since Epik allows landers with BIN, Payment plan, and make offer all in one. Payment plan can be set to “2” but I’ve been setting as “3”, lease, because it’s a low price for the buyer and low risk for me. Specifically, I’ve opted for 10 year lease which retains a BIN price buy out option for the duration of the lease. It allows the buyer to instantly secure the name and be able to pay later at my full price. I believe there is also some psychological logic to this. If someone wants a name and they see that anyone else can lock it down for $100 to $200, I believe this provides added incentive.

    Lease is cheaper than monthly payment plan that pays off principal. If someone wants a monthly payment plan to pay down the principal, I prefer they work that out with me through direct conversation.

    Your thoughts?
     
    Last edited: May 25, 2020
  8. Mister Funsky

    Mister Funsky Top Contributor VIP

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    In order of activity: #1 first...#3 second...#2 third...#4 fourth.
     
  9. NLP

    NLP Top Contributor VIP ★★★★★★★★★★

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    I've only ever done #1.

    I find #3 (Leasing) intriguing, like the Venture.com model, but I haven't tried it. It seems like most of my buyers have needed the name right away. Sprints, not marathons. But I could see how leasing could work well, with the right name, and the right buyer.

    I guess I just don't trust people to not disappear. I like knowing that once a deal is done, it's done.
     
  10. abstractdomainer

    abstractdomainer Upgraded Member Gold Account

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    What kind of domains if you can throw some light?

    Depends on how that company performs. A number of variables to be honest, here.
    Absolutely. Good points there!

    Absolutely! And having used it for a number of months/years, we may see some traction as well, in terms of them getting attached to a name and then, ending up with a purchase.

    Any success with leasing so far?
     
  11. lock

    lock DomainUsed.com VIP

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    Option 2 part payment if went sour could leave you in legal bind.
    If option 3 becomes viable an agreement with owner is leasing. i have Site.rentals to suit market.
    But the real market will likely be single words in dot com or exact 2 word.
    Option 4 just leads to sticky situations where they abandon project usually causes problems. Fact is 1 is presently the only real way but i haven't had xx,xxx sales where anyone needed to break down payments. I know of domainer that lived off option 4 for many years.
     
    Last edited: May 25, 2020
  12. Mister Funsky

    Mister Funsky Top Contributor VIP

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    I've leased a few, but I've never had one last for much more than a year. There was a time I gave the lease option the same amount of effort as the BIN. Now I use it as a last resort option if they balk at the price. It usually makes them take the price I have listed or they counter with a more realistic offer than they made previous.
     
  13. abstractdomainer

    abstractdomainer Upgraded Member Gold Account

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    Wow. Living off option 4 - I imagine Rick Schartz here. But then, he would be living off all the 4 options...lol
     
  14. lock

    lock DomainUsed.com VIP

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    Hard to tell with only about 30 domain sales reported more a folk hero.
     
    Last edited: Jun 8, 2020

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