Domain Sales is Overdue for a Shake-up – Part 2

The brokerage model needs to change.

In the previous article in this serious I took aim at the two major marketplaces of Sedo and Godaddy/Afternic. I then proposed a business model that solved the problem of the marketplaces being full of bad domains that must reduce the likelihood of sales transactions for potential buyers. You can read more about this hear: Part 1

I now want to propose a business model to help unclog the domain brokerage arm of the aftermarket.

Escrow.com

From a high-level perspective, the state of the domain aftermarket is as follows:
1.    Massive over-supply of domains – courtesy of the new gTLDs.
2.    Same demand.
3.    Anyone can put a shingle out and say they are a broker.

The vast majority of “brokers” aren’t brokers at all but are really “order takers”. What they do is take on lots of domains and then respond to inbound queries. These “order takers” just do what every serious domain investor does, with one exception, they didn’t pay for the domain they’re selling. So who do you think is more likely to sell the domain? The investor or the “order taker”? I’ll leave this up to you to work out.

On the flip-side of the coin there are the REALLY good brokers that know how to sell and pitch domains to prospective sellers and these people get the job done. They are worth their weight in gold and on the whole do an outstanding job for their clients.

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Saturday Musings - There and Back Again...

Once again I find myself at Melbourne airport waiting for my flight…..but this time there’s a big difference. This time I’m heading to New Zealand to hike for five days with Roselyn and a couple of friends…..it’s going to be awesome!

While “walking” through the airport Roselyn constantly admonished me to slow down. I don’t know what it about airports but my legs seem to operate faster than normal as I weave my way past families and travellers that view walking to the gate as a part of their holiday.

I should say that traveling with other people is an educational experience for me. I’m used to doing whatever I can to speed my way through security and immigration but with others who are in holiday mode it can be a little bit of a challenge.

For example, my wonderful wife (whom I deeply love) forgot she had a bottle of water in her bag so she experienced the joys of a security officer rifling through her personals. The officer then forgot to return her boarding pass and so she had to go to the gate early to get another one.

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Domain Sales is Overdue for a Shake-up – Part 1

Marketplaces need an overhaul.

In this article I’m going to propose an idea that could be very unpopular amongst domain speculators but wildly popular amongst domain investors. Yes, there is a difference between those two camps and it’s this difference that needs to be highlighted.

Escrow.com

If we are to look at the domain aftermarket, there are really two major and a host of second tier (not second rate) marketplaces. If I was running either Afternic/Godaddy or Sedo I would look at two things:
1.    How I could remove the garbage domains from my marketplace.
2.    How I could make more money from brokerage.

The garbage domain problem is a real issue. When a person searches for a domain they are often presented a host a trash that covers the real gems that should be highlighted. How would I solve this problem? Easy, tax the domains.

I would charge some nominal fee per month per domain (eg. $0.10 per domain) with a minimum subscription of say, $50/month, to have your domains in the marketplace. All those with good domains will happily pay the fee and the speculated trash gets washed out. There could be a sliding scale depending upon volume, but I don’t think this is even necessary.

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Saturday Musings - Cubs, Scouts and Life

Lord Baden Powell - founder of the scouts

When I was a young strapping lad, (I sound so old!) I attended cubs and loved it. As well as learning about bush craft and how to be a better person I had the motto of “Be Prepared” drummed into my head. Some people mistakenly believe that this motto only related to the outdoors, but they would be completely wrong.

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“Being Prepared” was meant to be for all aspects of life. It was all about being prepared to do your best in every situation. For the past eighteen months, my wife Roselyn and I have been preparing for a five-day hike in the South Island of New Zealand. As well purchasing a whole lot of gear we instituted a regular exercise regime. Although it’s hard work it’s going to be well worth the effort.

Could you imagine embarking on a hike by just rocking up? You’d get to lunch and regret the food you left in the cupboard. This is how many people approach business meetings. They turn up without having prepared and expect a great outcome…..sadly, they will be mistaken.

I have a motto when it comes to business and that’s I always try and be more prepared than anyone else in the room. Given circumstances, this isn’t always possible but it’s an aspiration that I’m sure my cub leader would be proud.

The scout motto didn’t just finish with “Be Prepared” it continued on with, “Do our best!” Having a “best” mentality raises the standard not only for yourself but for all those around you. If you are leading a team and only put in your second best, then don’t expect those whom you lead to excel. They will look to you as their leader for inspiration and finding it lacking.

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The Domain Monetization Seismic Shift

Did you feel the domain investment earthquake?

Over the last few years the domain monetization industry has gone through a silent seismic shift that many investors are completely oblivious about. For the last decade it’s been assumed that with the demise of Yahoo that Google was the only alternative to monetise domain traffic…..boy has that changed!

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I went trawling back through the many presentations that I have conducted at various conferences around the world and a slide from May 2016 leapt out at me. It showed the relative difference between revenues generated from traditional domain parking versus direct advertisers.

May 2016 data

What you will notice is that around 8% of the total revenue generated from domain names came from traditional parking solutions that are underpinned by Google. The numbers came from ParkLogic and given that we run a truly competitive marketplace for the traffic it means that about 92% of the time Google paid more than direct advertisers.

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