The FUTURE of Domain Name Brokers and The Long Tail

[Rob Monster]

Some of you will be familiar with the term "The Long Tail". It is perhaps one of the most famous articles ever written in Wired Magazine back in its hey-day. Chris Anderson is the visionary author. The old classic can be found here: https://www.wired.com/2004/10/tail/

What exactly do I mean by "Long Tail" Domains

There is a finite but knowable universe of people who will value the domain name TampaGolfLessons.com. If you can find them and engage them good chance that they value them for some price that allows them to earn a return from switching from what they use now to something better.

To illustrate, these are classic :"long tail" domains:

The Barrier to entry to become a Domain Broker is effectively zero

Why I think it matters to domainers is this: the super-brokers might not have any interest in brokering a 3 figure domain or a 4 figure domain because of the size of prize is too low, even at a 20% commission. Some brokers won't even take on a domain for less than 6 figures, again due to small size of prize.

On the other hand, in some parts of the world, notably in emerging markets, many people have more time and intellect, than they have money or domains. Nevertheless, they absolutely do have much to offer the domain industry by using their time and talent to connect supply with demand.

As we look ahead to the next phase of domaining, I foresee an explosion of Domain Name Brokers. The long-time brokers might perhaps dreading this day because they will up against a dual squeeze:

1. Godaddy, the aspiring monopolist, now has 1 million owned and operated domain names that they will be eager to sell through their channel to a vast retail customer base with a brokerage team who will be under pressure to add value and have access to a large proprietary data set about who buys what domains.

2. Emerging markets are about to serve up an absolute explosion of independent Name Brokers, who can make use of a fast-expanding array of free tools for finding who owns what domains, and can use secure ways to clear those transactions, e.g. through marketplaces and escrow services.


So what is a Boostrapping Domain Broker to do?

The good news is that brokering domains is a capital-efficient way for emerging market participants to bootstrap their way into an industry, even with little or no capital.

One way to get started might be to leverage a domain liquidation service - go find a domain that is newly listed, and try to find a buyer for that domain before the reverse auction ends. After all, the price keeps coming down while your prospective buyers can be bid up.

Many people might look at domain liquidation services on the last day, looking for expiring auctions to find the bargains. However, the contrarian move is a bit different and that is to look at the new arrivals, and not just for the mispriced domains but I think more importantly for the bootstrapper, the arbitrage opportunities.

Examples:

We plan to add a "Escrow" feature right inside of our domain liquidation service so that domain flippers can essentially send a domain into escrow, cover the transfer fee, and then have a short window to make good on their purchase. If they fail to make good, the auction resumes and the broker is out their transfer fee.

Looking ahead, we have larger ideas for how a fast-expanding pool of domain brokers could leverage a domain brokerage platform. Will share more on that if folks are interested in the topic.


Why a massive increase in the number of brokers is good news for (almost) everyone

The really great news for domain owners is that there will be a vast supply of highly energetic people who will be able to help connect supply with demand, and to get more supply into the hands of end-users. The end result of this is more liquidity in the domain economy, and higher retail prices for quality inventory.

 

[Rob Monster]

For me I am not a fan of the idea of someone trying to sell a domain they don't already own. Imagine if two (or more) "brokers" find a buyer for a name on NL. One or more of them will not get the inventory to deliver. Meanwhile the buyer of the other(s) likely won't be happy and it will reflect bad on the industry as a whole. Not to mention that it will generate alot of emails to end users that will probably be viewed as spam and once again reflect poorly on the industry.

Fair point and I think the solution is Broker Exclusives. The first broker to fund the transfer fee gets a 7 day window to try to flip that domain that is trading at $900 for more than $900.

 

[Recons.Com]

@Rob Monster your energy and creativeness is admirable. Thank you, by the way, for the link to the article. It is a great read.

However, in the same article, it basically lists the necessary attributes for something to be in the long tail. And that is items/products there have to be effort-free, marketing-free etc. What you are proposing, however, runs against that as it involves lots of work and marketing (outbound) for each of those. Those efforts should be reserved for the tower, not long tail. That is why the scheme would never work.

 

[SuperBrander]

@Rob Monster You mentioned that if a broker doesn't get a sale, the seller got a renewal for free and the listing resumes. But if sellers have their domain renewed for free, IMO in many cases, if not most cases, they won't be interested in resuming the auction. They just got another year for the domain to potentially sell. If the point was to liquidate in order not to renew... then now that won't be relevant anymore.

 

[Rob Monster]

OK, so to bring this thread back on topic (since I have finally read through it all):



As has already been mentioned, it's likely you'll attract the lesser quality 'brokers' with this strategy. Chances are they'll just try and broker the domain without pressing the Broker button (and paying the transfer fee) anyway.

But a real problem here, if they do press the Broker button, is that I might have listed a domain on NL after a domain has expired (while still deciding whether I renew or drop) and depending on how long since it expired the following may occur: A ‘broker’ comes along after a few days and the ‘broker-lock’ is applied. They don’t make the sale. Meanwhile my domain goes into redemption period. Now I am up for redemption fees to renew the domain because the auction was ‘on hold’ for 7 days, where before I would not have been up for redemption fees. OR a buyer swoops in at the end for $9 and grabs it. Is HE then up for redemption fees if it has gone into the redemption period?...



IF you're going to implement this I'd say the ‘broker’ button should invoke an email to the seller saying ‘xxx wants to broker your domain. Are you willing for this to occur?” and from there the seller can accept (name goes to escrow for 7 days) or reject (and auction continues).

However, having said that, I think that the industry needs a whole new brokerage platform unrelated to NL. At least half a dozen people have already suggested it in this thread. And as they have indicated, it's not really rocket-science: seller lists domains they want brokers for, broker selects domain, both parties must agree to terms (%, exclusivity period, etc). It's also key that the seller can add more comments if he wishes: suggestions for outbound, previous enquiries he's had, etc. And of course feedback left for both parties so others can see who they want to work with. Essentially an Upwork type platform for domain brokers. I would definitely have domains to add to that. Seems a perfect candidate for Epik Labs.

Thanks @NicTraders

In case not clear, the logic here is that to get the Broker Exclusive they have to fund the transfer. So actually, it is reducing the risk since instead of waiting until Day 7 of the reverse auction to start the transfer, the transfer is already starting immediately. The broker then has 7 days to fund a transaction at the strike price of the option, effectively getting the registrant a higher price in about the same time. Worst case, they get a free year of renewal.

As for the idea of portal for brokers, ICYMI, we have NameBrokers.com under development as a dashboard for brokers to manage their transactions while allowing them to:

- Feature their inventory
- Manage broker profiles
- Manage broker exclusives so there are not multiple exclusives on the same name
- Feedback on brokers (see TrustRatings.com for what that might look like)

@Ala Dadan is working on some mocks. We'll share something soon. There are a few projects in the hopper but this is one that I really get enthused about if we can do it right, and manage those broker exclusives while also enforcing standards.

 

[NicTraders]

Ignore what is on NameBrokers.com right now -- those are real listings but that is not the final destination of that brand. What you described there of matching talent to task is exactly what we are talking about.

Excellent! I look forward to seeing it completed then.

On a related note, I have been discussing with @Pat8 about the need for an Upwork solution. A very crude early prototype exists here:

https://www.masterbucks.com/projects/

You have to login with your Epik login to see it but the concept is there.

That could be very interesting when it's ready to roll.

it should be possible to find a broker to do buy-side or sell-side work for your very targeted niche.

It should also be possible to find a specialist to add value to your domains, e.g. add a logo, build a site, etc.

That's what we need. Well mainly the broker stuff. The other stuff is pretty easy to find now, though having it all in one place wouldn't hurt.

 

[Rob Monster]

Here is a first look from @Ala Dadan at integrating Domain Brokerage feature into NameLiquidate:

https://www.loom.com/share/1ddb04ad11684820a97e3393e34bdbe3

The Broker dialog is not done yet but you can see the next phase of NameLiquidate.com will include a Broker integration for allowing domains to be taken out for a 7 day broker exclusive.

The broker pays the transfer fee in return for the 7 day brokerage exclusive, i.e. they have 7 days to complete the purchase but the price is locked.

Input welcome there.

 

[7363824]

Yup, totally separate brands with separate use-cases. The login credentials are unified by single sign on across Epik brands and tools, but indeed separate user experiences on distinct URLs.

The thinking is to have verified brokers manage a profile at NameBrokers.com to be eligible to take an exclusive as a domain as a broker on a name listed in a marketplace, starting with NameLiquidate.com.

This roots out bad actors and if brokers have a poor sell-through rate, the could be held to a higher standard in terms of up front commit or maximum bid option.

I see this going further than NameLiquidate. For example, earlier today, someone approached me about buying a domain for $2K from Afternic for a flip. It seemed high risk and seasonal. It was election-related.

If we create an open API for NameBrokers.com, it would be possible for any marketplace to add a broker widget to a domain that does not already have a broker exclusive.

So, the code object has to check if a domain is already listed as broker exclusive. If so, the NameBrokers widget shows the avatar of the current broker. If not exclusive, then it invites brokers to engage,

This going to be a bit of crawl, walk, run but the concept is becoming more clear, and that is to help sellers create value with the help of verified broker who want to put skin in the game.

@Ala Dadan is working on some mocks to help make the vision a bit more clear.

My point is NameLuquidate should have no connection to NameBrokers besides simply being owned by Epik (SSO and all). Completely different use cases IMO.

 

[tonyk2000]

NameLuquidate should have no connection to NameBrokers

Exactly. First, 7 days is simply not sufficient for a brokerage. Second, introducing brokers to nameliquidate is almost the same as inviting endusers to nameliquidate. Which is not what nameliquidate was designed for. Domainers are both selling and buying at nameliquidate, and, with domains routinely purchased, domainers in buying mode are expecting and want to make money themselves - so no buyer can appericate decreased inventory, or, to be honest, his potential income going to somebody else instead (to a broker in this case, should a brokerage be added to nameliquidate).

NameBrokers .com (or any brokerage service offered by Epik) is something worth discussing, I for one have a lot to suggest etc. - but not in this thread, which is mostly about NameLiquidate. Maybe @Rob Monster can start a thread dedicated to NameBrokers?

 

[capybara]

I doubt it would work this way. If a person who is "selling" domains they don't own gets a lead on a name that is being sold there, they would wait until it hits the lowest then buy and resell.

 

[sellnow]

I feel that smarter buyer would wait at the end when domain name go to $ 9, but it is another great opportunity for brokers as long as all process doing well

 

[garptrader]

In emerging markets it is common to find many street vendors trying to sell an array of products. In the tourist areas (Bocagrande area of Cartagena, Colombia or Rodadero area of Santa Marta for example) many will promote tours, rentals and other services as well. Due to the collapse of the Venezuelan economy, there are now millions of Venezuelans living in Colombia and neighboring countries. How many of these eager individuals will find domain brokering as a source of income? Can you be a domain broker if your only internet access is via a cellphone or internet cafe which charges hourly?

 

[trelgor]

My take. Any property that is hard to navigate and has fragmented markets (sound familiar?) is in dire need of brokers. There is a built up tension for a penny to drop among brand protection agencies that maybe they don’t need to litigate the living daylights out of everything all the time. Pragmatics. Maybe they can reach their goal (read, their clients goals) through alternate means. This corporate brand protection humus + brokers can fasttrack awareness and value in a big way.

 

[trelgor]

The brokerage need is also related to the lexical uniqueness of domains.

 

[oldtimer]

Here is the thing:

If you have skills to do outbound for this kind of names, you are way better off buying your own inventory at $5 to $20 apiece and selling 10% to 20% of them at $300 to $500 each than working for commission on other people's stuff while also competing for the same inventory and end users.

How many domains does a disadvantaged but talented person in one of the emerging economies needs to buy in order to do as you say. The lack of capital in some of these places is what makes it difficult for people to get started as domainers and I believe is the issue that Rob is trying to address here, although as I have already said I am not that much of a fan for arbitrage specially if it is being done without the domain owner's permission or even knowledge.

IMO

 

[Recons.Com]

This is not quite what I meant here.

The brokers in this example will be practicing what we refer to as a "broker spread". They are securing a domain for $X and selling for $Y. They are banking the spread.

So this is not about earning 10-20% commission on a sub $1000 domain. This is about arbitraging one man's rotting trash into someone's else's recycled treasure.

I hope to make that more clear in this thread as that is the essence of what NameLiquidate is about. The missing ingredient has been scalable, viral demand that pushes sell prices much higher for sellers.

Thanks for clarifying. So he is effectively buying the name at $x. That wouldn't be brokering though. That would be selling your own name?

 

[bmugford]

Come on now!

1. If you have skills to do outbound and get around 10% of sell through, you need just 10 domains for 1 sale or invest as little as $50 and earn $300. And now, you have $300 to buy 50 names, sell 5 etc.

2. You are focusing on much smaller problem of having $50 to start a business for a "disadvantaged but talented person", while forgetting that this person will have to overcome much bigger problems of a) language barrier; b) buyers being in the rich countries where they will distrust anyone from a developing country; c) other disadvantages like not being able to provide a phone number or make a call etc.

There is a reason brokers focus on top names and that is that selling names involve considerable effort. It makes more sense to spend 5x more time and effort and sell $xx,xxx name for 15% than work for 20% or even 50% commission for a $500 name.

It also doesn't make sense of working for 20% when you are doing the 80% of the effort/investment, as the owner invests only his $5-20, while you might need to spend hours.

Well said.

 

[capybara]

you must be transparent with the domain owner

Why? There is no reason for such "must", Escrow.com runs confidential transactions and non-transparent to either buyer or seller transactions, as these are pretty common. If you are strictly against such practice you might be losing some sales.

 

[Rob Monster]

This may be discussed in connection with a regular marketplace. Not NameLiquidate. NameLiquidate is exclusively domainer-2-domainer platform (at least by original design). So, there is no space for brokers (even legitimate brokers with owners approval), saying nothing about frontrunners...

Let's think about this for a second.

Domainers are liquidating domains. They bidding starts at $1000.

Now, a broker comes along and has an idea who should buy it. Why would you deny a broker the opportunity to put skin in the game to go close a deal with a retail buyer within 7 days and bank the spread?

I can see why buyers just want the inventory to fall to $9, but from a seller's perspective, is there really any downside to having risk-free help to sell your domain?

Perhaps we need to add an optional "Broker" button to marketplace listings generally to allow domain owners to secure the assistance of brokers on mutually agreed terms.

My thinking was to start with NameLiquidate because we are talking about inventory that the seller is LIQUIDATING and presumably will appreciate ROI of some kind.

So, thinking with your SELLER hat on, what is wrong with free help to sell a domain you are dropping?

 

[karmaco]

Let's think about this for a second.

Domainers are liquidating domains. They bidding starts at $1000.

Now, a broker comes along and has an idea who should buy it. Why would you deny a broker the opportunity to put skin in the game to go close a deal with a retail buyer within 7 days and bank the spread?

I can see why buyers just want the inventory to fall to $9, but from a seller's perspective, is there really any downside to having risk-free help to sell your domain?

Perhaps we need to add an optional "Broker" button to marketplace listings generally to allow domain owners to secure the assistance of brokers on mutually agreed terms.

My thinking was to start with NameLiquidate because we are talking about inventory that the seller is LIQUIDATING and presumably will appreciate ROI of some kind.

So, thinking with your SELLER hat on, what is wrong with free help to sell a domain you are dropping?

Its not risk free help.Thats the point. At least not to the owner. Lots of names go to auction that the owner decides to keep. Not all names will be dropped or are even dropping right now. I put up names that expire sometime in 2020. The spammers can tarnish your chances of selling the name should you decide to keep it. The spammers wouldn’t get a UDRP the owner would. The owner isn’t getting “help” they are getting charged 9% of 9 dollars. You can sell for a better fixed price here or DAN even.

I wish I knew about the ability to cancel a listing once you’ve listed there as someone bought a name I renewed (for them apparently). $9 (8.20) is not enough. Lesson learned.

 

[SOLR]

That may address one concern but there are others too. I don't think NL is the right way to accomplish this. But I think there may be a way to accomplish this with a separate platform dedicated solely to this. If I as a domain owner could list domains that I think could have outbound potential but do not wish to do myself Epik could review and rate the opportunity and connect with those who don't have the means to buy their own names but wish to try brokering the names. It would be done with the consent of the domain owner, be exclusive to one "broker" for say 60 days, have a predetermined split between the owner and the broker, and could be processed by Epik escrow (which btw I am hoping will become available in Washington soon).

Could be cool to have some type of crowd-sourced Epik-affiliated (or totally 3rd party) brokerage that could be offered to other registries as well. Even GoDaddy would have a hard time turning down allowing GoDaddy-registered, Afternic parked domains from being outbounded so long as they are getting a cut of the commission alongside increased liquidity.

 

[equity78]

Could be cool to have some type of crowd-sourced Epik-affiliated (or totally 3rd party) brokerage that could be offered to other registries as well. Even GoDaddy would have a hard time turning down allowing GoDaddy-registered, Afternic parked domains from being outbounded so long as they are getting a cut of the commission alongside increased liquidity.

GoDaddy is never participating in that, they have their brokers.

 

[SOLR]

GoDaddy is never participating in that, they have their brokers.

I meant names registered at GoDaddy, not GoDaddy owned portfolios. But you're probably right irregardless. I'm more just saying if there was a competent and organized pool of independent brokers that could sell $1k to $10kish names in a manner worth the broker's time investment, and who shared some of the broker commissions in some way with the registrars who enable them to sell names registered by the public/domain investors at said registrar, it would be difficult for registrars to turn down more liquid income. I would imagine the domain investors would opt part of their portfolio into such a program in order to increase liquidity. I know I would if it was proven to be effective at improving sell through rate without asking too much commissions in return...

 

[Ostrados]

Fair point and I think the solution is Broker Exclusives. The first broker to fund the transfer fee gets a 7 day window to try to flip that domain that is trading at $900 for more than $900.

Ok. But why would anyone pay to reserve a domain for short 7 days period?! Someone can find a buyer first then come back and buy the domain from NL and resell it risk free!

I am against this practice and I am afraid some people will like it and start doing at on scale without even waiting for you to add broker button! And again this practice is not brokerage and should not be tolerated in NL as a good thing to do!

 

[Rob Monster]

Ok. But why would anyone pay to reserve a domain for short 7 days period?! Someone can find a buyer first then come back and buy the domain from NL and resell it risk free!

I am against this practice and I am afraid some people will like it and start doing at on scale without even waiting for you to add broker button! And again this practice is not brokerage and should not be tolerated in NL as a good thing to do!

The amount the broker would have to pay up front is just the transfer fee.

So, for say $8.49 a broker gets a 7 day exclusive to flip a domain for more than it is currently listed at. If they don't complete the sale within 7 days, the seller has gotten their domain renewed for free, and their auction listing resumes.

It seems viable to me. We'll do some design mocks for the concept. However, no debate that this needs to be done as exclusives and sellers should have the ability to opt out of the broker scenario.

Also, brokers should perhaps be screened/approved for this service in order to maintain some standard of quality and code of conduct

 

[Rob Monster]

@Rob Monster You mentioned that if a broker doesn't get a sale, the seller got a renewal for free and the listing resumes. But if sellers have their domain renewed for free, IMO in many cases, if not most cases, they won't be interested in resuming the auction. They just got another year for the domain to potentially sell. If the point was to liquidate in order not to renew... then now that won't be relevant anymore.

Exactly. Heads they win. Tails they win.

The point of NameLiquidate is to help registrants with perishable inventory to extract value. If they get another year of runway, that is a win too. The upside for Epik is that the domain came to Epik even if there was no margin on the transfer. We don't monetize the expense anyway. We monetize the exit.