If you’ve never used one before, you’re probably wondering what does a domain broker do and why would you even need one?
Buying and selling domain names can be a complicated, confusing and nerve-wracking process — especially if you’re someone who doesn’t like negotiating. Even with the advent of domain marketplaces and domain research tools, you’re still going to run into technical hurdles and inefficiencies.
A good domain broker can help you navigate these obstacles and make the buying or selling of a domain name easier.
Wondering if a domain broker is a good fit for you? We’ll explore the following considerations for choosing a domain broker:
- The benefits of using a domain broker.
- Using a domain broker to sell a domain.
- Using a domain broker to buy a domain.
- The difference between domain seller brokers and domain buyer brokers.
- Finding and qualifying a reputable domain broker.
- How are domain brokers compensated?
- What to look for when choosing a domain broker.
- Do you have to work with a domain broker?
Let’s dive in.
The benefits of using a domain broker
There are many ways a domain broker can help clients with the buying or selling of domain names. Let’s look at several below.
Sets a budget
First, and probably foremost: brokers help clients establish a realistic budget for the purchase or sale of a domain name. Because domain brokers have access to both public and private historical sales data, they know what type of domain inventory is moving right now — and what it’s selling for.
For an eye-opening look at this year’s biggest domain sales, check out DNJournal’s year-to-date sales charts.
Another way domain brokers can add value is as a neutral or impartial party in the negotiation process.
It’s not unusual for emotions to run high between a buyer and a seller, particularly if the two don’t see eye to eye; a broker helps eliminate the risk of those emotions interfering with or jeopardizing a potential deal.
A domain broker can act as a calm and patient intermediary to make sure that differences of opinion don’t get in the way of a successful transaction.
Tracks down domain owners and buyers
Another area where a domain broker can help is in reaching the unreachable. A skilled domain broker is also a really good detective — they need to be in order to track down either the mystery owner of a domain name or the perfect, most ideal, potential buyer.
Oversees the monetary transaction
A domain broker can, and should, oversee and ensure the safe financial transaction between buyer and seller.
When there’s a business deal happening between two people in different corners of the world for thousands of dollars then you, as the client, want to make sure you’re going to get the agreed-upon money or goods.
A domain broker makes sure the transaction is run through the proper channels and successfully completed. This could include papering the deal via a formal purchase or sale agreement as well as consummating the transaction through a domain escrow service.
Domain brokers also come in handy during the actual technical transfer or ownership change of the domain name.
Facilitates the domain transfer
A good domain broker will be very familiar with the different mechanisms and processes required to move a domain from buyer to seller. Not only can they oversee that process, they can also accelerate the speed of that transfer happening while making sure it’s being done in the safest and most secure manner possible.
Using a domain broker to sell a domain
A good domain seller broker can help you identify, prioritize and contact the most likely buyers for your domain.
Your seller broker would, therefore, need to take proactive action — raising awareness that your domain is for sale, and specifically targeting the most likely potential buyers of that domain name.
Domain brokers can develop and execute a marketing plan to promote the domain that the client wishes to sell. This could include things like listing the domain on marketplaces and distribution networks, putting out a press release, doing targeted advertising, or conducting a social media awareness campaign.
Using a domain broker to buy a domain
If you’re hoping to buy a domain owned by a third-party, a skilled domain buyer broker can help you set a realistic budget and identify who the most likely owner of the target domain name is, even if its owner is hiding behind a privacy shield.
If your first-choice domain name can’t be acquired, a buyer broker can help you understand what alternative name inventory is out there and available for purchase within your budget.
Buyer brokers can also suggest other domain extensions that the client may wish — or have — to consider.
This domain name price guide will help you understand the appropriate budgets required to purchase different types of premium domain names.
The difference between domain seller brokers and domain buyer brokers
There are two types of domain brokers.
A domain seller broker works for the domain owner, and their goal is to sell that owner’s domain name (or names) for the highest possible price. A seller broker focuses on trying to find buyers for the domain, and then convincing those potential buyers to buy the domain at (or above) the target price set by the seller in consultation with the broker.
The other type of domain broker is a domain buyer broker. A buyer broker works for the buyer of a domain name. Usually, that buyer is an entrepreneur or corporation who wants one or more domain names, and they hire a buyer broker to identify and negotiate with the owners of those domain names. In this context, the buyer broker’s role is to (a) try to get the desired domain name, and (b) get it within whatever the buyer’s designated budget and timeframe is.
Although some domain brokers specialize in being either a seller broker or a buyer broker, most brokers have experience performing both roles.
Finding and qualifying a reputable domain broker
Unlike with insurance and real estate, domain brokers aren’t required to be certified, licensed or even formally trained. Anybody can hang up a shingle and claim they’re a domain broker even though they may have little to no experience and training.
That’s why it’s important to do some due diligence when you’re considering hiring a domain broker.
One of the ways to find a good domain broker is to ask people in your business network which brokers they’ve worked with and liked. You can also do some Google searching or check on LinkedIn.
Be sure to research the broker’s background, look for testimonials, and maybe even ask for client references.
How are domain brokers compensated?
Domain brokers are compensated in several different ways. Some brokers are compensated purely on commission; they get a percentage of either the domain purchase price or the sale price.
This is a very common model although the exact percentage amounts will vary.
Other brokers are compensated by a flat fee. There could be a flat fee for them to begin working on the project, and there is probably another flat fee if they’re successful in buying or selling the domain.
Some brokers work on a fee structure that’s similar to how lawyers charge and are paid by the hour. Although this last scenario is atypical, it’s a model some clients prefer because they’re used to it.
No matter which compensation model the domain broker is using, what’s most important is that it’s as aligned as possible with your goals as the client.
If you’re the buyer, you want a compensation model that rewards your broker for getting you the name within your budget. If you’re working with a seller broker, you’ll want a model where your broker is motivated to sell your domain for the greatest amount of money.
Always aim for a compensation model that matches your goals.
What to look for when choosing a domain broker
Now that we’ve covered the basics, you might be ready to find a domain broker for an upcoming transaction. But don’t settle on the first name you come across.
Let’s go through some things you should look for when you’re evaluating potential domain brokers.
You want a domain broker with a successful track record. Have deals they’ve brokered been covered by the media or domain industry publications? A quick Google search should be revealing. How long have they been brokering domain names? Do they have testimonials from clients there?
Ask the broker about their negotiation philosophy.
Prior to working as a domain broker, some have worked in other fields (such as sales) where negotiation was central to the role. Other brokers have had formal training in it.
Ultimately, you’re looking for somebody who will be effective at representing your best interests in a deal, and who is good at understanding the person they’re trying to convince to either buy or sell your domain name.
The more experience the broker has in negotiation or sales (or both), the better.
Ask the broker about the size of their business network. A quick look at their LinkedIn profile can be illuminating. Especially for seller brokers, you want someone with a vast, multi-industry set of contacts because they’ll need to work those connections to find the ideal buyer for your domain name.
A good domain broker also needs solid research skills. Ask them how they track down potential buyers. Ask them how they track down domain name owners.
You want a broker who can think outside the box, and is adept at finding both buyers and existing owners.
Look at how enthusiastic (or not) the broker is about the domain name you’ve asked them to sell or acquire for you. If they’re not excited about working with you on the project, chances are the broker will lose interest during the course of the engagement and it may not be successfully completed.
Since a transaction might take months to complete, choose a broker that will be unwavering in their commitment.
To be successful, a domain broker must be very persistent and not give up at the first sign of rejection. It requires a tough skin, especially for seller brokers who will face an avalanche of no’s before they get the yes.
Ask the broker how long and hard they will work on the project. Are they going to try for just a couple of days and then give up, or are they in this for the long haul?
The most important thing to consider when choosing a domain broker is a personality fit. You may be working with this person for weeks or months, so you need to make sure you (and potential buyers or sellers) can get along with them.
The domain broker you choose will be the primary point of contact for your domain name to the outside world, so you want someone whose attitude is appropriate for the project.
You may require a broker who takes a gentle and measured approach, or you may require one who is assertive and hard-nosed. The choice of styles will depend on the specific project, and both approaches have their place.
Do you have to work with a domain broker?
You certainly don’t ever have to work with a domain broker; it’s not mandatory. You could, in theory, go the do-it-yourself route and attempt to buy or sell a domain on your own.
The questions to ask yourself are these: What’s the best use of my time? Is it hunting down potential buyers or owners of a domain name? Or would my time be better spent focused on my existing business or project that I need the domain name for?
Before you attempt to broker a domain name by yourself, take an honest look at your own strengths and weaknesses. Selling or acquiring a domain name demands a lot of skills that not everybody has. If you’re great at research, sales, negotiation and are good with people, you’re probably a great candidate to do the domain brokering yourself.
If you’re not great at research, don’t like rejection, are uncomfortable with negotiating and/or lose your cool quickly, then you should seriously consider hiring a domain broker.
Ready to get started? Contact GoDaddy’s Domain Broker Service and get going.