Horse Trading and Web Site Domain Buying
While e-commerce has become mainstream on the Internet, I recently discovered there are still parts of the web that resemble the Wild, Wild West. If you’ve ever tried to buy a web site address from a seller, keep your wits about you.
When we decided to re-brand the company to InvestorCOM, the first thing I did was investigate whether or not the web site address was available. I was able to register the .ca domain, but was disappointed to learn that the .com URL had been owned by a Cayman Island-based company since 1998. I’d bought many new domain names over the years, but I’d not tried to buy an existing one from another owner and so looked to the Internet to see how best to approach the situation.
Fortunately, there are brokers who specialize in just such a service – having an understanding of the marketplace and recent domain buy/sell activity and for a fee, they would advise me how much I could reasonably expect to pay for the desired domain name. The largest of these domain name brokers is SEDO.com.
Through a series of seemingly straightforward steps, I was led down the garden path (and out to the wood shed, as it turned out). I first paid 99 $US for a domain appraisal and market assessment that promised price guidance for purchasing the domain. A couple of days later, I received an elaborate 10-page report containing recent purchase activity and an overall assessment of how much the InvestorCOM.com URL would likely cost. For $2,000 (plus a 15% commission) I could likely purchase the domain. I bid $1,000. Two days later, the SEDO broker sent me another recommendation, this time that I raise my bid by a thousand percent to $20,000 for the same domain. I asked what had been the counter-offer to my first bid? The SEDO broker fell silent, ignoring my question, but explained that they knew this seller based on previous transactions and they didn’t think he’d deal for less than $20,000.
I didn’t know the seller, but was quickly getting to know the broker. I went back online and looked up the domain at whois.com to find a masked email address for the Cayman Island company that had parked the domain 15 years ago and so sent off an email directly, expressing my interest in buying the domain. Three weeks went by before I heard back, but they would sell this domain. An exchange of emails over the next few weeks, a little negotiation before agreeing to a $2,500 payment though third party Escrow.com and we were the proud owner of InvestorCOM.com. Just slightly higher than the original price from SEDO. Apparently the broker does know domain prices, but where they really excel is in horse trading.
If you ever need to buy an existing web site domain from a seller, I’d suggest you do the leg work yourself. It will take a little effort and some time, but you’re less likely to be lasso’d.