Working With Domain Brokers - Part 2

Working With Domain Brokers - Part 2

I’ve recently engaged a number of domain brokers to assist me with the sale of a few domains. The first thing I said to them was, “What do you think the domains are worth?” Despite my years in the industry I am unlikely to know what the “sales” market is saying right now. I’m a domain traffic specialist, not a full-time sales broker.

What I’d done is bypass the question of, “What I think the domains are worth” and jumped straight to getting the professional advice. In many respects, I’m an ideal broker customer. I want their advice and I will then accept it…..so the domains are priced to sell!

Escrow.com

I’ve received a number of offers for my domains from the brokers and they all seem to be asking whether I want to sell. In my opinion, this is a little silly. The reason why I engaged the brokers is to GET their advice. What I would like to see is an email which says, “Here’s the offers Michael, based on my experience and current market comparables I recommend that you accept.”

What I’m really saying is, “How the heck do I know whether I should sell or not?” I want the broker to provide me with their professional recommendation. Once I have this recommendation my reply would be, “Done! Let’s go through the escrow process.”

This brings me to a VERY important point. I personally would only use Escrow.com for escrow services with domain brokers…the reason being is that I know they are completely legal and regularly audited by governmental agencies. Yes, I know they’re a regular sponsor of my blog but I would only allow sponsors that I’m happy to recommend. Using an escrow service is particularly important when you have no idea who the buyer is.

Once a transaction is completed some really stupid domainers go and research the buyer and then offer additional domains to them. Their whole goal is to cut the broker out of subsequent deals and save the commission fee. This is the most idiotic behaviour I’ve ever heard of!

Let’s unpack this…..the domainer is placing no value on the broker’s professional advice. Despite the broker having a network of potentially thousands of buyers the domainer is placing all of their eggs in a single buyer’s basket. The broker has no incentive to ever work with the domainer again.

I can’t say this for a fact but I wouldn’t be surprised if brokers talk and warn each other of working with certain domainers that try this practice on. Whatever you do….don’t try and go around your broker. They play an important part in the domain ecosystem and you’ll ultimately end up by eroding both your reputation and your ability to sell your assets.

Forget all of the above reasons for not going around your broker and just consider this simple statement. This type of behaviour is what is known as, "acting in bad faith". In other words, it's conduct that you really shouldn't be associated with and is likely to really damage your reputation as a domain investor.

I wish all of the brokers and domain sellers the best of luck with the sale of their domain portfolios. Feel free to leave a few comments below of your own experiences with selling your domains. I should also mention, that I DO NOT broker domains for anyone so please don’t ask me to do so.

---------------------------------------------------

Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

Tags:
2514 Hits
0 Comments

Working With Domain Brokers - Part 1

Working With Domain Brokers - Part 1

When you really think about it, professional domain brokers have one of the most difficult jobs in the world. They have to manage both a domain owner’s and a potential buyer’s expectations and walk a tightrope whether they get paid or not. I’ve been doing a lot of thinking about the brokering industry and thought that it was about time I wrote an article or two on the topic.

Domainers, engage the services of a domain broker because they want a domain(s) sold. The reason they do this is that to date they have not been able to sell their domain at their anticipated price point. They then pass their domains to a broker in the hope that by engaging the services of a professional they will succeed in attaining a great big windfall.

Escrow.com

So what’s the first thing that a domainer does? They tell the professional what their domain is worth. How stupid is that???? The reason why they’ve just engaged a broker is to get their professional advice on the value of the domain. A good broker is a person that should have the pulse of the market….not the domain investor that has, to date, fundamentally failed to sell their asset.

Here’s the difficulty for the broker. In most cases, the domain is worth precisely what someone is prepared to pay for it. Sure, they can guesstimate, but a more professional broker will more often than not say they need to do some research on the sale price. What they are really saying is I need to make some calls, rustle a few bushes and see what falls out. This makes perfect sense to me.

More often than not, the domain owner has completely unrealistic expectations on the price. If you ask 99% of domain owners for a valuation of one of their domains they will ultimately guess. There’s no science or numbers behind what they want….they just want it. That’s all very well but what they want for the domain and what the market is prepared to pay are two entirely different things.

For example, you may want to sell one of your domains for millions of dollars but if the market is telling you it’s worth $10K then you really need to revaluate at your expectations.

The problem arises when the broker looks at what the market is telling them and then the often crazy number that the domainer wants for their domain. If the numbers are way apart then the broker knows they will never sell the domain and make their commission….so why bother starting.

If the numbers are closer together then the sale is more likely to happen and the broker can either do a quick sale or try to push things upwards. They are now wrestling with maximising value rather than whether they will put food on the table.

For example, let’s imagine that a domainer values their domain at $100K (ie. the reserve price) and the broker values it at $20K. Put yourself in the broker’s shoes for a second…..deep down they know that it will be highly unlikely if they are able to meet the seller’s price…..so why would the broker waste their time? On the other hand, if the reserve was $20K then the broker is now working towards a $30K+ sale value to move the domain on and maximise their commission.

What I don’t understand is the number of brokers that are still doing deals where they only receive a commission on the sale of a domain…..this is what I would do if I was a broker.

I would say to the seller something like, for every $1,000 that we are apart on the domain valuation you need to pay me a retainer of $10/month in advance. If we look at the above example this means the seller can either reappraise their $100K reserve or reduce it to the broker’s valuation. If the seller refuses to budge then they need to pay $800/month for the broker’s time.

What this model does is:

1.      Pay the broker for their time attempting to sell at unrealistic prices.

2.      Incentivise the seller to reduce their expectations in line with the market.

3.      Ultimately start to increase the liquidity of domains as more are sold.

We can argue about the price points and whether it should be $10/month/$1000 or some other figure but the model seems to stack up pretty well.

In the next article in this series I’m going to share some of my own experiences with engaging the services of a broker and also some of the stupid practices of sellers.

---------------------------------------------------

Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

Tags:
2410 Hits
0 Comments

ICANN Dublin

ICANN Dublin

Once again I’ll be heading off overseas to meet up with a gathering of individuals that are entirely immersed in the world of domains. This time my trek leads me to the fair land of Ireland and a people that seem to sing their words rather than speak. This is a fact that my wife absolutely loves about the Irish!

So after a short hour or so visit to Dubai and twenty-four hours in a flying tin can I’ll arrive in Dublin. After surveying the conference agenda, the first thing that has struck me about ICANN is the crazy number of acronyms. I’m a programmer and also a private pilot and let me assure you that ICANN has managed to surpass even these two noble pursuits with the number of abbreviation they inflict on everyone.

Escrow.com

A classic example is on Sunday. I’m trying to work out whether I should go to the GAC, ICG, RySG-CEO TLDs, GNSO or ALAC sessions? Of course there is always the ccNSO or ccNSO SOP or BC-BRG as options as well. Seriously???? It looks worse than my kids texting their friends!!! I must admit that there is one session that looks particularly good…..”lunch break” J

So why am I going to be attending ICANN? It’s really simple, ICANN is a place where business gets done. It’s full of potential ParkLogic clients and the information that you can pick up from talking to individuals is nothing short of brilliant.

Like any organisation, it will take some time to get to know the ropes but this isn’t my first and I know a lot more people who attend ICANN than I did a few years ago. It will be great catching up with them to find out how many of the rapid changes to the Internet over the last 12 months are impacting their own businesses.

In the meantime, I’d better go and pack otherwise I’ll miss my flight….see you all there!

Cheers!

---------------------------------------------------

Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

Tags:
Recent Comments
Edgevaderpro
Looking forward to seeing you. Again!
18 October 2015
mgilmour
We were like ships passing in the night......need to catch-up at NamesCon :-)
28 October 2015
2236 Hits
3 Comments

Sneak Preview of ParkLogic Next

Sneak Preview of ParkLogic Next

At the recent Domain Conference in Fort Lauderdale, ParkLogic released a sneak preview of what we are calling “ParkLogic Next”. We will be publishing a series of short videos featuring different aspects of Next over the weeks leading up to Namescon in January. It's something that we're really excite about!

Escrow.com

About 18 months ago, we made the big decision to rebuild our entire platform and infrastructure from the ground up. This was one of the best decision that we have ever made. With nearly a decade of accumulated knowledge and experience from extracting the full value from domain traffic we are on the cusp of releasing what we believe is a ground breaking domain platform.

We had a number of goals in designing Next:

  1. Informative – you can now view different aspects of your data at the click of a button. Everything from Excel like filters to adding trend lines are at your fingertips.
     
  2. Actionable – you can make decisions from the data before you.
     
  3. Fast – we don’t want clients to have to wait for extended periods of time for their data.
     

With these three goals in mind we have now released a video outlining some of the features of the Next dashboard. The entire dashboard has been built by accessing our own API which empowers clients to also easily integrate their own variation of the Next platform into their own systems. There is no custom secret code....everything is in the API and accessible to clients.

Putting everything into the API is an important principle. It means that larger customers, registrars and registries can easily integrate Next into their own brandable interface. It also provides a huge amount of flexibility for domain investors who like both an online interface and one that allows them to get under the numbers.

A number of the features of the dashboard include:

  • Adding trend lines at the click of a button
  • Being able to see all of your data via a slider snapshot
  • Instantly move data from a chart to a table for more detailed analysis
  • View the breakdown between mobile and desktop traffic
  • View top referrers, geo-split data and what domains made up a days data
  • Excel like filter functionality to zoom in on the data that interests you.
  • Everything exportable to a CSV file
     

During the next months we will be continuing to extend the Next dashboard and the underlying functionality that will make it the most advanced domain management interface in the world. We hope that you enjoy the first short video giving a glimpse of ParkLogic Next.

---------------------------------------------------

Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

Tags:
2924 Hits
1 Comment

Practicing What I Preach!

Practicing What I Preach!

Why is it that the lights at an electrician’s house don’t work, taps malfunction at a plumber’s and domainers seem to forget why they bought their domains? At the recent domain conference in Florida I found myself sharing about domains and I thought to myself, “It’s about time that I reviewed my own portfolio!”

Escrow.com

Too many of us are so busily acquiring domains, working on projects or just having a good time that we risk forgetting that we’re actually running a business. Unlike a hobby, a business needs to have an outcome that involves some sort of profit….and in many cases it’s really simple to generate but we just don’t seem to bother.

Take me for example. A few days after they poured me off the plane (it’s a 30 hour journey from Fort Lauderdale) I began working through my personal domain portfolio and noted beside each of them what business model I was applying to them. This isn’t really that hard as there are 4 primary business models to think about.

1.      Traffic domains – revenue comes from domain traffic

2.      Stock turn domains – selling the domains for around $X,XXX

3.      High value domains – selling domains for $XX,XXX+

4.      Development

The next thing I did was contact Chris Leggatt at domain holdings and said, “Hey Chris, how’d you guys like to broker gx.com.au?” It’s a two letter com.au that would be great for a forex website as it could stand for “global exchange”. I’ve had the domain for years I thought that it was about time I did something with it or sell it off to someone that will.

I then looked at another portfolio that had about 30 three and four letter .com/net domains in it that once again I’d been happily renewing year after year. I called up Tessa Holcomb at Igloo (like Chris, she’s an awesome broker) and passed these across to her. If you’re interested in these domains then reach out to her at “sales at igloo.com”.

Making sure that my traffic domains were looked after was a breeze….after a review, I handed them all over to ParkLogic. Even though I’m one of the founders of ParkLogic, let me say that I eat my own dog food….!

The developmental domains are already secure in various businesses that are progressing forward quite nicely (whizzbangsblog.com is one of them).

So once the brokers have completed (or not) a series of transactions I will just move through my list. Anything that doesn’t have a business model gets rejected and dropped.

What am I actually doing here? I’ve essentially outsourced all of my domain management to experts in their fields. I’ve been in the industry for way too many years and there’s one thing that I’ve learned….don’t try and do everything yourself! Speak to experts in their fields and get them onboard working for you.

I will unabashedly say that I’m an expert in traffic monetisation….there’s very little I don’t know about how to squeeze every last penny out of domain traffic. Although I also know quite a lot about selling domains I pass the challenge onto experts who do this day-in and day-out. This will maximise my sales and also frees up my time to focus on other opportunities.

I said it at the Florida conference that one of the problems that domainers often have is that they value their time at $0. Don’t fall into this trap…..outsource your different tasks to experts and move on. Whatever you do….don’t be like the electrician and plumber!

Have a great weekend!

---------------------------------------------------

Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

Tags:
2644 Hits
2 Comments