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My experience of selling domains on payment plan

Labeled as advice in Domain Selling and Domain Sales, started by AbdulBasit.com, Jun 8, 2020

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  1. AbdulBasit.com

    AbdulBasit.com DomainsWeb.com AbdulBasit.com PRO VIP ★★★★★★★★★★

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    Hello everyone,

    Today I would like to share my little experience of selling domains on payment plan. Although I’ve had very little experience in doing this and I know there are some domain investors doing this on regular basis.

    So to date I’ve had experienced 3 payment plans. Very few in numbers but at the same time very exciting journey which I’m sure at least some of you’ll enjoy reading it. I’ll share the surprising part at the later stage of my post.

    It was in 2015 when I first started with payment plan in the shape of MediaLounge.com for $16,560‬ on a 24 months period. We’d an agreement in place and did all the work before both parties got agreed upon. Received very few payments but within the same year, the buyer said they’re no longer interested due to some changes in company and this domain is no more required. The deal was cancelled and domain is still with me.

    Second payment plan was on Kuneco.com for which I quoted $1,988. Buyer had no money to buy in one shot and preferred to buy on a 6 months payment plan for a total amount of $2,200. Started in the last quarter of 2019 and completed the deal this April. It was great pleasure doing business with this particular buyer. Such a nice and humble person.

    Third and last one so far happened in last month MarketPal.com for $4,500. The actual deal was the final payment be made by September 2020. Somehow the buyer got good business at his end and wrapped up the deal within the last month which was surprising to me. Another great person to deal and a great negotiator as well.

    Now the biggest surprising thing is ALL the above payment plan deals happened privately WITHOUT using any escrow service. Each of the buyer believed in my business practices and I give a lot of credit to the blog I developed in 2012 and of course to my readers and commenters who likes sharing my experiences.

    Feel free to give your feedback, no matter how good or good it is 😉
     
    The views expressed on this page by users and staff are their own, not those of NamePros.
  2. Mister Funsky

    Mister Funsky Top Contributor VIP

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    As with all of your posts sharing your experiences, I appreciate you taking the time to post them here.
     
  3. BrandVenue

    BrandVenue BrandVenue.com

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    Nice read. I have Sold one domain using 12 months payment plan which was listed at Dan for $4k. Buyer paid all instalments in due time so it was a good experience. But I don't offer payment plan option by default now. I offer it while in negotiation with buyers and they always choose to pay all at once for some discounts rather than paying extra for long instalments.
     
  4. NickB

    NickB Aka MrAcidic VIP

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    Thanks for sharing Abdul, interesting they are all private.

    I am currently paying for a domain monthly and it is via a private transaction, no escrow, no marketplace involved, the seller keeps hold of the name until final payment has been made by myself then the transfer can take place.

    It has been a very smooth experience so far. The guy who owns the domain has been very easy to deal with.

    As long as both the buyer and the seller are people of their word, professional and the communication is good then I see no problems with these types of deals, as long as due diligence has been done beforehand.
     
  5. bmugford

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

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    I have tried multiple payment plans in the past and they almost always end up being a pain in the butt, where you have to keep chasing down the buyer for payment.

    I would consider doing a payment plan, but only for higher end domains and if a 3rd party did the management of it.

    Brad
     
  6. Furquah

    Furquah Brand Ambassador INDIA Epik.com Staff VIP

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    You become a 'Brand' Bhai @AbdulBasit.com you getting trust from end-user. You deserve that.

    Thanks for sharing. May more come.

    Edit:- nice new look of your blog.
     
    Last edited: Jun 8, 2020
  7. Bob Hawkes

    Bob Hawkes Top Member NameTalent VIP Gold Account Trusted Blogger

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    Glad your experience has been generally positive, @AbdulBasit.com and thanks for starting this thread. It seems a number are mentioning payment plans various places. Would be nice for one of the venues that make it easy to indicate what fraction of sales are now on payment plan, and how many of those go to completion.

    Hi Brad, I agree I would only do it when a third party do it (fortunately that is now super simple at multiple marketplaces). Why do you say only for high value? If someone else is taking care of the payments, why does it matter if it is a low value sale?

    Bob
     
  8. Thanks for creating this topic Abdul as it's a timely for me. In the last 3 months I've had 3 sales close with direct payment plans. And they are my biggest sales in this same period (not all time).

    I can't disclose the names as they're still in contract but I closed a six figure deal this past Saturday with a payment plan. It was the fastest deal of this size I've ever made. From start to finish it took 6 hours.

    Doing payment plans using escrow or epik is really the only choice if buyer/seller have reservations about the safety and security of the deal.

    But if the buyer and seller are reputable and there is trust, I think a well crafted financing agreement can help facilitate such deal. The biggest advantage to direct, private deals imo is the speed of transaction.

    For the deals I required a 20% down for the five figure names and a 10% down on the six figure name paid via paypal. The term was 12 months on all deals (I only offered 6 and 12 month periods) and now payments will automatically be requested via paypal.

    With the crisis looming and financial uncertainty abound, payment plans definitely have a place when structuring larger type deals. So I plan to always include this option when responding to price requests.
     
  9. ultradog

    ultradog Established Member

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    I've had 3 sales using payment plans, 2 with Escrow. The biggest hangup for these is that during the period before the payments are complete, the buyer usually wants to have the domain pointed at his site, and if he can't manage this himself, he'll usually request help from you.

    Sometimes the buyer can't communicate what the problem is with pointing the domain due to inexperience/lack of technical know-how, and even if you have the knowledge to assist, it may be hard to help. That, for me, is one reason why I might prefer to use Escrow.com for payment plans.

    Even the sale that we did without Escrow, with a very pleasant buyer, might have turned frustrating if I didn't have a coworker who knows all about the technical stuff -- who was able to solve the problem when the buyer couldn't. It turned out he'd set up a very odd thing with Cloudflare that wasn't going to hold up.

    I wonder how others have managed with this possible problem, when doing payment plans without a company to manage them.
     
  10. ultradog

    ultradog Established Member

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    Actually I meant when pointing our domain at the buyer's site, he has to have his site/hosting configured correctly for that. If he doesn't then our efforts won't work.
     
  11. biggie

    biggie Top Contributor VIP ★★★★★★★★★★

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    Hi

    I've had a couple as well and all were done in same manner
    except no one defaulted and payments came via PP.

    longest time, 3 yrs.

    imo…….
     
  12. Pazu

    Pazu Established Member

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    Thanks for sharing about this, Abdul and others.

    I have a question for Abdul... since you did the payment plans privately, did you accept the funds through Paypal or some other method? Did you maintain possession and then forward the DNS for them? I don't see myself doing this personally, but may consider it if the buyer is really stuck on price and doesn't want to pay upfront as well as commission fees.

    I have one payment plan going now, halfway through 5k over 12 months. I use the money solely for renewals, which helps cover overhead for the month. Buyer seems happy and told me he should finish development and the associated product launch this year. I did this deal through Namesilo, which takes less of a commission than other services. It's a variable rate depending on the buyer's payment method each month, up to 7.5% by credit card, but I believe as low as 3% by wire transfer. Epik takes 9%, but I'm fond of Epik at this point and have many landers there. On my landers, I tend to offer BIN or LEASE, but monthly payment plan with accrued balances could be negotiated directly and the lander quickly modified to express the negotiated terms.
     
    Last edited: Jun 10, 2020
  13. AbdulBasit.com

    AbdulBasit.com DomainsWeb.com AbdulBasit.com PRO VIP ★★★★★★★★★★

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    Thanks everyone for the feedback and sharing experiences :happy:

    As @Bob Hawkes asked, @bmugford I'm curious to know why you would be interested only in higher end domains on payment plan?

    @OnlineBusiness.com - Amazing to hear you sold a domain for 6 figures which took only 6 hours! Buyer must have thought of getting a great deal and I'm sure you're happy with this sale too.

    @Pazu
    I accepted payments via PayPal (friend and family) so no risk of chargeback. The last one made payment via TransferWise. Ofcourse I retained the domain ownership until the final payment was made.

    Thanks once again everyone for giving your inputs (y)
     
  14. SuperBrander

    SuperBrander Top Contributor VIP

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    Thanks for sharing your experience. I think using a third party to handle it is better though. If both sides trust each other that's great of course, but what happens if unexpectedly something bad happens to the domain owner while the domain is still being paid for? I know that as a buyer I would never want a domain I'm paying for with installments to be in the hands of one single person whose health I need to depend on in order to eventually get the domain. When the domain is being held by a trusted company, you can know that even if something happens to the seller- as long as you make the payments, someone from the company will transfer the domain to you when you're done paying. That's my 2c worth anyway.
     
    Last edited: Jun 10, 2020
  15. AbdulBasit.com

    AbdulBasit.com DomainsWeb.com AbdulBasit.com PRO VIP ★★★★★★★★★★

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    That's the only concern when doing privately without any escrow. But I've shared all my email IDs/passwords/domains detail with some close family members to handle things if any mishap occurs at my end.

    I appreciate you raising up this point (y)
     
  16. SuperBrander

    SuperBrander Top Contributor VIP

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    @AbdulBasit.com Thanks. Yeah, in your case it's obvious that you'd do that because you're an honorable person so your buyers are in good hands. But in general, when entering an installment plan as a buyer it's something that I feel is better to avoid and even for that reason alone- the commission to a platform is justified. It's one thing to trust someone you're dealing with, but trusting their relatives to do the right thing in case something unexpected happens to the seller... definitely much harder. Personally I sleep better knowing that the domain is held by a third party.
     
    Last edited: Jun 10, 2020
  17. AbdulBasit.com

    AbdulBasit.com DomainsWeb.com AbdulBasit.com PRO VIP ★★★★★★★★★★

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    Well said!
    Totally agree with you :xf.smile:
    It would be difficult as buyer for myself too to trust someone with no background or credible information to deal privately.
     
  18. Save Breach

    Save Breach Established Member

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  19. Pazu

    Pazu Established Member

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    @AbdulBasit.com That friends and family Paypal tip seems like gold! I had never heard or thought of that as a solution for chargebacks. Of course, if it's done by credit card, I think there is still a chance of chargeback with the credit card company, if not on Paypal's end, so I'm still skeptical of this method for larger transactions. Have you been applying this method to many non-payment plan sales as well? Thanks!
     
  20. creataweb

    creataweb Some Guy with Awesome Senior High School Photo VIP ★★★★★★★★★★

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    Friends & Family can be reversed if the buyer states fraud via the card / account. Saw some horror stories of people complaining about this after doing deals. Not domain related but thru markets like CL / FB.
     
  21. WatchDogue

    WatchDogue Top Contributor VIP

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    Always an enjoyable and informative insightful post whenever you reveal a bit about your sales and, your sales methodology.

    Great that you have earned that type of trust factor with your clients and their payment plans!
     
  22. AbdulBasit.com

    AbdulBasit.com DomainsWeb.com AbdulBasit.com PRO VIP ★★★★★★★★★★

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    I've used friends and family option with lot of people including with payment plan and non-payment plan deals and never had any charge back issue.

    But as @creataweb mentioned there are some horror stories about charge back even with FNF option, this is something new to me. However, per my experience I never had any issues and I've also heard that FNF is safe and there cannot be any charge back if using this method.
     
  23. OhYeah

    OhYeah Established Member

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    As for escrow - I probably did over 300 or so deals in $low - mid range. Only few required Escrow.. :)

    PS, and I got scammed 2 times.
     
    Last edited: Jun 12, 2020
  24. NameBuyer.com

    NameBuyer.com Top Member PRO VIP Gold Account ★★★★★★★★★★

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    Thanks Abdul!

    I currently have a total of 23 active lease-to-own domains for a total of around $1,700 per month. I was close to 30 leases, but I recently had a wave of them get paid off as their lease terms were up.

    What I'd recommend to anyone, is having the lease-to-own option on your "For Sale" page along with the monthly rate. That way, the customer can figure out how it fits into their plans and their budget without even talking to you. Even better, it prevents you from negotiating upfront based on what's in their bank account, and then switching to talking about a lease-to-own after the price is reduced.

    If someone contacts me and asks me about a discount, I simply say that if they're paying upfront we offer a flat discount of 3.5% (depending on the domain). This virtually eliminates the discussion of the domain price and the buyer then bases their decision on the value it brings to their needs. I also avoid offering anything more than a nominal discount for the upfront pricing. Offering more than a nominal discount introduces distrust in your pricing if you start slashing 20-40% off the domain price, and this creates buyer uncertainty.

    I'd say about 95% of my lease-to-own arrangements sell at the full asking price, with no interaction until the setup fee is paid.

    As for hosting these yourself, it can be convenient and simple for the seller, but adds a huge amount of risk to the buyer. As a buyer I'd have a really hard time doing it on any domain over $500. I wouldn't even consider buying a $1000+ domain like this personally without it being handled by a third party. I've bought about 3-4 domains via monthly payments on NamePros in the $500 or less range. For one of those purchases, I was concerned about the transaction not completing based on some interactions with the seller. I bought another name at $1,700 from someone via email who appeared to run a reputable design business. They wanted to do a 6 month lease where I just send the money to them directly, and there was no way I was going to do that. I steered it over to a domain platform to complete the sale and I paid any associated fees. In this case, the domain price was only $1,700, but the value to me was over $5,000 and I really needed this transaction to complete. I've also had one purchase with HugeDomains via payments for SuperPremiums(.)com ($3,195) but they are such a large business that I was fine doing it. The last one I did was for $7,500 via undeveloped/dan that is still active. I'm in the domain industry, and I still feel uneasy about this transaction not being closed for another 10 months.

    Even if we operate a site that appears "big", there is always the risk of death :dead:(and the domain expiring 2 weeks later), divorce :greedy:, identity theft :pirate:, business partnership dissolving :rage:, or even if the domain is mistakenly relisted as a buy now in Afternic :bag:. If anything happens to me today, my family will receive all the remaining payments for all 23 lease-to-own arrangements, and the buyers will all receive their domains without a single interaction from my side.

    For me, the uncertainty doesn't come from a distrust in people. I just try to avoid encountering Murphy's law nowadays. In the past I've had unexpected situations arise. One of these was years ago, back in 2007. I sold a domain to a giant game corporation for only $1,000 and they assured me over and over that no escrow would be needed and to send them the domain first while they process my payment. I did, but then I then spent the next 1 month contacting different people in the company so I could get paid. Luckily, this was one of my first big sales and I never went escrow-less again.

    In my last 1.5 years in college, I sold a total of $54,000 worth of software. The majority of my sales were in the $100+ range. The only negative transaction I remember was one of my lowest sales for $15. The buyer had wrote me a bad check, so from that point on I never deviated from my Cash-On-Delivery (COD) rule. Don't want any negative energy following me around. :xf.wink:

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    Last edited: Jun 12, 2020
  25. AbdulBasit.com

    AbdulBasit.com DomainsWeb.com AbdulBasit.com PRO VIP ★★★★★★★★★★

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    That's impressive you did over 300 deals! (y)
    Care to share how you got scammed twice?
     

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