The good Lord stopped making oceanfront property a long time ago. However, with the ocean level rising, he is taking some away. As the lines between the real and virtual worlds blur more and more, the oceanfront property of the internet is also becoming crowded and overdeveloped.
Instead of erosion and rising sea levels, established businesses and trademarks make the oceanfront property of the internet more valuable and less available.
You must be thinking, “Jeff, you must love the higher prices because that means you will make a larger commission.” My answer is, yes, on those large sales, the commission is always lovely. However, those sales have become much more complex and time-consuming from 12 years ago when I entered the business.
What is So Complex? It’s Just a Domain Name?
Our clients are at various stages of the domain purchase process. Some have not decided on a name yet; others have picked out a name and still want to buy a domain. While others are looking to shorten their domain by eliminating an action word (Get, Try, Buy, Visit) in front of the domain for example and settling for the one word .Com.
When the client has not settled on a domain name we first like to learn as much as we can about their venture—the types of products, and services they offer and their target customer. We get a ballpark of their budget and the timeframe they would like to complete this transaction. Then it begins!
We scour the internet looking for domains that fit what they are looking for. Then, we go directly to the customers we have direct relationships with, domain investors, established companies, and EVEN OTHER BROKERS!
We take all of the names we find that fit, and we like them as well. Put them on a shared Google Sheet with the client, and we start the process of reviewing the names, prices, and situations that might come with each domain.
Buyer v. Seller
Some mornings we will wake up to a Google Sheet you thought someone deleted, but in reality, it is the customer letting you know the domains we provided don’t get them excited. That means we need to do some more digging.
Sometimes we find a domain that the buyer loves, the price is in their range, but their lawyer comes back and says, “Nope!”.
– Back to the drawing board.
Then the day comes when the stars align. We find the domain name that excites our buyers; the lawyers give their blessing, but the seller …Well, the seller. They don’t feel the same way. The problem is:
The seller is a multinational company and despite the site not resolving they have an internal product based on the domain.
The seller is the original registrant with a 20-year-old email address tied to the domain. He doesn’t want to lose it.
The seller is a defunct company.
The company that owns the domain is in bankruptcy.
The seller is “Too busy.”
The seller said the domain was stolen.
The seller died.
The seller is in the midst of a divorce. The assets are frozen.
The seller has “An emotional attachment to the domain.”
The seller just doesn’t want to sell it.
The seller has other plans for the domain name.
The seller is unresponsive.
The seller will only take USD, the buyer will only pay in BTC.
The seller will not sell to a specific type of person.
The seller changed his mind and he no longer wants to sell it for the price he agreed to.
The seller’s price expectations are outside my client’s budget.
Each of these are real situations we have encountered some of them many times over our years of being in the business.
Some of these might make you chuckle reading them, but you should hear some of the excuses we have heard from buyers who haven’t made payment for domains they agreed to pay for.. However, that is for another article.
We Love the Challenge
We have seen each of these situations, been challenged, and we have overcome them. I am not going to say that we have been 100% in our efforts, and we turn water into wine, but we have had much success coming across situations like the ones listed above.
Situation: The seller that had the domain stolen.
Outcome: Luckily the person who stole the domain (who tried to sell it to our client) was unable to get it out of the registrar in time. We helped him contact the right people internally, follow the proper process, get it back and complete the transaction. The transaction was delayed for quite a bit of time working with the legal department to get the lock removed. In the end it all worked out.
Situation: The seller has other plans for the domain:
Outcome: The buyer picked out a great domain for the business. The seller said he isn’t interested in selling. He had other plans for it. Cash was not something that would motivate the seller. We decided to share the buyer’s deck with the seller. The business idea excited him. We introduced the buyer to the seller. They traded stock and an advisory role for the domain. – Great story, great ending.
Situation: The seller would only take USD buyer would only pay BTC:
Outcome: The buyer made a very generous offer for the domain name in BTC. BTC is something the seller was not interested in. I found an attorney that would accept the BTC., liquidate it then send the cash. The seller was in dispute with the attorney a few years before. The seller would not work with him. Found another company to conduct the transaction. While looking for a new solution, BTC dropped significantly in value, making the cash price unacceptable to the seller. BTC rebounded, and we completed it.
Situation: The company that owns the domain is in bankruptcy:
Outcome: We have worked with portfolio owners and other sellers whose assets are in litigation. We understand how to navigate the legal process and create the right expectations, especially regarding the timing of how everything will work out with the buyer. It took much patience, and even an appearance before a judge, but it worked out.
Situation: The seller is the original registrant with a 20-year-old email address tied to the domain. He doesn’t want to lose it.
Outcome: This happens a lot more often than people think. One of the things we do is put in the contract that the buyer will forward X number of emails, what the email addresses are for Y amount of time. It takes some explaining as to how it will work, but this is usually one that we can find a way to find a middle ground between all parties.
Situation: The problem is that the seller is a multinational company and despite the site not resolving, they have an internal product based on the domain.
Outcome: Instead of the buyer paying for the domain over time, the buyer needs to give the seller time to migrate their internal systems off of the domain name. That could take up to six to eight months. The buyer put a sizable down payment down to prove he is serious. The seller will then start the migration process and finish several months later.
Every Opportunity is Different
On top of all of this, we are still negotiating price, contract terms, jurisdiction, and a lot of times, monthly payment contracts. For many of our clients, it is the largest purchase they have ever been part of. These transactions can take months or even years to complete. It takes much time, energy, strategizing, and patience to make it happen.
Despite the challenges of being a Domain Broker, always changing one thing that will never change is that every opportunity is different. The opportunity to learn about new ideas, businesses, and technology is something that will never get dull for a guy like me.