Lessons From An Old Dog

One of the benefits of having been in the domain name industry for a while is that you become alert to both opportunities and potential problems.

I’d like to share one such situation with you. It ended well for me, but only because I was alert to potential problems. Hopefully my experience will also help others along the way.

Background

Earlier this year, I was approached (via Domainer) to act as a domain broker for a high value Aussie domain name. The sellers had previously used another firm without success.

I hardly ever do any domain brokering these days, as I am too busy selling my own domains. However, I do love the challenge of selling 6-figure domains, so I was quite keen.

I set out the basis on which I was prepared to act – the most important of which was pricing parameters. To me, unless your seller can agree on a realistic set of numbers, then there is no sense in even having a go.

The next most important point is to protect your efforts – this is something I have learnt the hard way over the years. Things happen sometimes that are beyond your control – however, if you’ve done the job and got a deal, and the seller subsequently doesn’t accept it for their own reasons, then you still deserve to be paid.

To get this sort of protection, you need to cover this potential scenario upfront. I always charge a non-refundable engagement fee, and in my initial invoice for this fee, I outline all terms and conditions we have agreed on. I like to keep things simple and to the point, so it’s not a big document. This is the “must have” money clause:

“If we get you an unconditional offer within the agreed price and time parameters (with a minimum of 10% deposit paid); and you decline to accept such offer, then commission is still payable”.

This Is What Happened

  • I went to work, and approached my contacts that I’ve built up over years. Within two weeks, I had three serious offers. Two of these were “heads and shoulders” above the others. They were both fantastic people to deal with.
  • Sellers seemed happy to accept a deal, but at the 11th hour, I was informed that one of the five shareholders (a major insurance firm) had decided to exercise a buy-out of the other four shareholders. I had not known about this, and so I was gobsmacked. As were my two potential buyers. So rather than a registrant transfer, the company was sold.
  • The sellers were decent and honourable businessmen, so my 15% commission was paid. And they even gave me a recommendation. If I did not have that clause mentioned above, then I would have been very miserable. Instead, it was a great 60th birthday present! My only regret was (and is) not being able to officially claim one of the highest value com.au sales in Australian history.

So the moral of the story is. If you’re going to be a domain broker (full or part-time); make sure you cover your arse!

Ned O’Meara – 22nd December 2016

9 thoughts on “Lessons From An Old Dog

  • Avatar
    December 22, 2016 at 3:31 pm
    Permalink

    I wouldn’t expect anything less Ned!

    Like
    2 people like this.
  • Avatar
    December 22, 2016 at 7:57 pm
    Permalink

    Great stuff as always

    Like
    Anonymous likes this.
  • Avatar
    December 22, 2016 at 9:55 pm
    Permalink

    A clause like that is great insurance.

    Like
    Anonymous likes this.
    • Ned O'Meara
      December 23, 2016 at 9:53 am
      Permalink

      @David – as usual, a masterful play on words. 😉

      I got “stiffed” years ago by someone who I did the right thing by. So that “insurance” clause was born.

  • Avatar
    December 23, 2016 at 11:29 am
    Permalink

    Old Dog? or

    COD (CunningOld Dog)

    Brokering names is tough, particularly in Australia with a smaller end-user base so you need to be rewarded

    PS…Interesting to learn the other day that names auctioned at NamesCon are subject to a 45% brokerage

     

    • Ned O'Meara
      December 23, 2016 at 11:49 am
      Permalink

      COD – Call of Duty. ????

      45% commission would surely put some people off. Are they adding that as a buyers premium? Or hitting the seller? Or splitting it?

    • Ned O'Meara
      December 23, 2016 at 3:39 pm
      Permalink

      @Greg

      “Interesting to learn the other day that names auctioned at NamesCon are subject to a 45% brokerage”

      I think someone gave you a bum steer Greg – it’s 25% if sold on the floor; 15% if sold by private brokerage.

      The first number (25%) is still a truckload.

  • Avatar
    December 23, 2016 at 3:51 pm
    Permalink

    I love that “must have money clause” and will be adding it to my broker agreement in the near future 🙂

  • Avatar
    December 23, 2016 at 4:35 pm
    Permalink

    Sounds like the sellers used you to test the market.

    I can’t see them being honourable, in not mentioning the buyout clause.

    Potential buyers should have breakup fee for efforts on their side too.

    Congrats and Merry Christmas.

Comments are closed.