Domain Brokers: What Are They and Why Do They Matter?

Domain brokers are mediators that ease the process of selling and acquiring domain names. They are an effective means to buy or sell valuable domains at the best price possible. Although they charge a commission, their expertise and industry connections are worth the fee.

When it comes to choosing a domain name, you will discover that the web address that best fits your business has most likely been taken by an individual or firm. This means trying to get it off them will require some form of research, negotiation, and sale.

But how do you go about this if you’ve never had the experience? How nice would it be to find someone who could just handle that, while you concentrate on running your company?

Luckily, there is a group of industry experts called domain brokers whose job is to facilitate the buying and selling of domain names. So in the rest of this piece, we will be looking at who domain brokers are, the pros and cons of using them, and an overview of some of the best domain brokers in the business. Let’s dig in!

What is a Domain Broker?

A domain broker is an individual or firm that performs the role of a middleman in the buying and selling of domain names. Over the years, domain names have graduated from simple web addresses to business names and brands that could hold the key to online success.

Because of this, domain names have become a critical piece of online marketing and brand recognition, they have also shown the ability to rise in value over time. For instance, Cars.com sold for $872 million in 2014.

With the potential for a lot of money to be exchanged, domain brokers help in the search, valuation, negotiation, and sale of these domains. Typically, domain brokers are experts with years of experience and numerous connections in the domain industry. So what do they do?

How do Domain Brokers Work?

Purchase/Sale of Valuable Domains

Whether you’re trying to sell or buy a valuable domain, domain brokers make the process easier by doing all the paperwork and due diligence required for a smooth transaction.

Negotiation

Due to their vast experience in the domain industry, these brokers can effectively negotiate on your behalf. By doing so, you are positioned to get the best possible deal when you’re either trying to purchase or sell a domain name.

Facilitate Anonymous Transactions

When it comes to huge financial transactions, anonymity can be a great asset. Domain brokers can help you stay anonymous when you’re either trying to sell or buy a valuable domain name.

Appraisals and Valuations

Valuable domains usually command a high fee and how much they sell for could be influenced by many factors. Domain brokers are very good at appraising a domain name and determining its value. This way you won’t lose money or pay too much.

Host Domain Auctions

As experts and authorities in the domain industry, some of these domain brokers host auctions where interested parties can bid on valuable domain names up for sale.

Consultancy

Choosing a domain for your business could prove trickier than you might have anticipated. Domain brokers can use their wealth of experience to offer consultancy services when you’re trying to select the best fit for your business.

But then, you shouldn’t just engage the services of a domain broker from the get-go. These are some of the scenarios that would warrant getting a domain broker.

When To Use A Domain Broker

Complex Negotiations

Negotiations with a domain owner can be challenging especially if you’re unfamiliar with the market. In situations like this, it is wise to employ a domain broker’s expertise for an easier negotiating process.

Valuable Domains

Valuable domains usually cost a lot of money, and the key to either making a profit or paying the right price depends on accurate valuation and negotiation. Domain brokers can ensure a domain name is bought or sold for the right price.

Time Constraints

The process of buying and selling domain names can be time-consuming. So if you cannot patiently follow the procedure, it’s best you employ a domain broker to handle the task for you.

Confidentiality

If you prefer doing business anonymously, then getting a domain broker to buy or sell a domain name for you is perfect. Since the broker is negotiating on your behalf, your identity is completely left out of the picture.

Domain Portfolio Management

If you have an extensive portfolio of domains, you can engage the services of a domain broker to manage them on your behalf. This streamlines the selling or buying process which helps maximize profit.

But what if you don’t want to use a domain broker, what are the alternatives you can use to buy or sell a domain name? Let’s find out!

Alternatives to Domain Brokers

Direct Negotiation

If you don’t fancy paying a commission to a domain broker and you’ve got the time, skills, and understanding of the market, you can negotiate directly with a domain owner or buyer.

You can research the domain value and handle the transaction process yourself. The address and phone number of a domain owner can be found on the WHOIS database, so if you’re selling, make sure you’re accessible based on the information you put up there.

Escrow Services

When you agree on a fee with an interested buyer or seller, it is advisable to use an escrow service (link to piece) to ensure a secure transaction process. Escrow services ensure a smooth and fast transfer of ownership thereby eliminating the need for a domain broker.

Domain Marketplaces

There are a lot of online marketplaces that facilitate direct domain sales. You can easily check for available domains for purchase or put up yours for sale. This takes out the need for a domain broker and that pesky commission. Platforms like GoDaddy and Sedo are a good place to start.

Should you choose to hire a domain broker, what are the things you look out for to make sure they are the best option?

How to Choose The Best Domain Brokers- Factors to Consider

Performance History

In the domain industry, experience is key, so before engaging a domain broker, you need to check how well they’ve performed in the past. Take a look at the clients they’ve worked with before and how big the transactions were. If they were successful with those deals, chances are they will succeed with yours too.

Expertise With Domains

One of the reasons why you’re looking for a domain broker is because you want expert hands handling the transaction. You can know their level of expertise by checking previous transactions they’ve done or the company history.

Reviews

When an organization is good at something, people will talk about it. By checking reviews, you get a clearer understanding of how they handle transactions based on other people’s experiences. However, these firms will only post the best reviews on their websites, so you should consider checking third-party review sites for unbiased opinions on the broker.

Customer Service

Take time to ask the questions directly to the broker you’re considering. Most of them have round-the-clock customer service, and depending on how they respond, you will have an idea if they are reliable or trustworthy enough to do business with.

Terms and Conditions

Every domain broker has their unique terms of business, so before you get into any contract, you should read through it first. Usually, it will contain any charges that may apply or rules that may result in a cancellation of the contract. Do not skip any pages, every tiny detail matters.

Now that you’re aware of what to look out for when picking a domain broker, what are the advantages and drawbacks of using them?

Pros and Cons of Using Domain Brokers

Pros

Time-saving

Because the domain does all the documentation, prep, and legwork for you, it saves a lot of time that you would have spent trying to do things yourself.

Expertise

Most domain brokers are experts in the industry, and using them gives you access to people that will help you make better decisions when it comes to domains.

Industry connections

Domain brokers usually have a vast network of buyers and sellers, so using them plugs you into that network.

Stress-free negotiations

By negotiating on your behalf, they handle the back-and-forth of negotiations to get you the best deal possible.

Secure transactions

Domain brokers usually have a secure means of carrying out transactions. By using them, you worry less about possibly losing funds to scammers.

Anonymity

When you’re carrying out a big domain deal, it is in your best interest that news stays private. Domain brokers do the business on your behalf thereby preventing any release of transaction details to the public.

Accurate Appraisals

Due to their experience and expertise in the market, domain brokers can give you an accurate valuation of your domain or the domain you want to purchase. This could be the difference between making a profit or losing money.

With all these in mind, using domain brokers has its drawbacks. Let’s find out!

Cons

Costs

Because of the advantages they carry, using domain brokers comes at a cost. They usually charge commissions while some even charge an upfront fee before the service even begins.

Time Frame

When you engage a domain broker, the contract usually lasts for a certain period—mostly 30 days. If you’re not able to secure a purchase or sale by then, you will have to renew the contract which usually comes with a fee.

No Regulations

Domain brokers aren’t governed by any real market regulations, so they are free to conduct business without proper checks and balances. This is a scenario some might not be comfortable with.

Strict Terms and Conditions

Domain brokers usually have strict terms and conditions that must be adhered to. Some of them might stop you from selling your domain elsewhere during the period of the contract, while others only take up domains that are valued in thousands of dollars.

Then there are domain brokers that only agree to sell domains with a certain top-level domain (TLD). That’s why it’s important to read through the terms and conditions before going into a contract with any domain broker.

You can now make an informed decision on whether a domain broker is right for you. To make things easier, here are some of the best domain brokers in the business.

Who Are The Best Domain Brokers?

GoDaddy Domain Brokerage

Founded in Phoenix Arizona (1997), they are the ideal place for people who want to purchase domains but don’t want to blow through their budget. GoDaddy goes after domains for their clients irrespective of the cost. So if you don’t want to spend six figures on a domain, this is your best option.

They don’t broker sales but have an auction site you can use to sell a domain. They also offer a free domain appraisal tool.

However, they charge an upfront fee of $60.99 and a 20% commission if the deal goes through. Some of their past clients are Wolfpack.com, Merch.co, and iBuild.com.

VPN.com

For those who love to remain anonymous, VPN.com can help broker the sale or purchase of a domain without disclosing your identity. Because of this, their clientele usually consists of wealthy individuals, large companies, and founders who would rather not disclose their identities.

They are also patronized by politicians, celebrities, and athletes for whom secrecy is of utmost importance. Aside from domain brokerage, they also provide virtual private networks (VPNs) for secure use of the internet.

They mostly take on clients willing to spend the big bucks, they don’t charge an upfront fee but will take a 15% commission when a deal goes through.

Sedo

Sedo is a domain name and website marketplace that was founded in 2001. Since their inception, they have made over 700,000 domain sales, and have over 2 million customers worldwide.

They can help you get appraisals, negotiate on your behalf, and transfer the domain name. The platform also allows you to buy, sell, auction, and park (keeping a domain currently not in use) domain names securely.

They do not charge an upfront fee but will take a 15% commission when the sale goes through. You can also park your domain for free and they will fix a price for it based on their expert appraisal.

However, they will charge a 10% commission should the parked domain be sold. Some notable websites brokered by Sedo are Call.com and Desktop.com.

Final Thoughts

Domain brokers are the agents that facilitate the sale and acquisition of domain names. Beyond that, they offer appraisal services and use their industry connections and expertise to make this process seamless.

We learned about how domain brokers work and the factors to consider when engaging them. We also learned about the advantages and disadvantages of domain brokers, and we then discovered some of the best brokers in the business.

Although they will charge a fee, buying or selling a domain name is a lot easier when backed with their expertise.