Today We Call Out Sedo For Including Escrow Only Transactions In It’s Sales Figures

Sedo.com has been including domain names it acts only as escrow agent for in its weekly and annual reports of domain sales.

This information came to light this week when Sedo inadvertently reported a sale that was supposed to be confidential and Francois from Domaining left a comment on TheDomains.com telling us that not only should have the sale been confidential but that Sedo.com only acted as Escrow agent for the transaction.

We reached out to Sedo which confirmed that its served solely as the escrow agent in the domain name in question.

In our opinion Sedo should not include domain names in their weekly sales report in which they only act as escrow agent.

There are two major problems IMHO with including escrow only sales in their weekly sales reports.

For one the Sedo weekly report as it is transmitted to blogs and other news sources weekly, including TheDomains.com always starts with the following language:

“”Please find the weekly sales list attached. This past week there were a total of …….. sales through our marketplace, totaling over $………”

For us when someone handles solely the escrow function of receiving the funds and transferring the domain, its misleading to say the “sale took place through our marketplace”

It would be like Escrow.com claiming it sold $X number of dollars of domains every week because they cleared the transactions.

Unless a domain is sold through and by virtue of a broker or the online sales and purchase system, commonly referred to as a marketplace, the domain should not be claimed to be sold through the marketplace.

Secondly including such sales in Sedo numbers can result in the double reporting of sales.

For example if we at MostWantedDomains.com sell a domain for $5K and uses Sedo rather than Escrow.com to act as escrow agent the sale will be reported by us to us to DnJournal.com and it will be reported by Sedo.com as well. Obviously if we sold the domain through Escrow.com instead of Sedo there would be no chance of double reporting.

We reached out to Sedo this week to discuss the issue who issued the following response:

“”Sedo has a policy of transparently sharing the percentage of external transfers that take place at our marketplace, and we publish those numbers as part of our quarterly and annual reports. ”

“In 2011 just 6% of all transactions were external transfers, which translates to only 2.3% of our published sales value (in dollars) for 2011.”

“External transfers are part of the marketplace, and we will continue to report them in our weekly marketplace report, and will also continue to transparently show the percentage volume in our quarterly and yearly reports (2011 report).”

“We will of course also continue to honor clients’ confidentiality requests, independently from the source of the transaction. We apologize for the mistake in regards to the domain …….com which was inadvertently reported this past week.”

So 6% of all sales accounting for 2.3% in dollar volume reported by Sedo are for domain names Sedo had nothing to do with the sale other handling the Escrow part of  the transaction.

Based off of the Sedo.com 2011 annual report published a few days ago, the escrow only transactions would have accounted for around $2 Million dollars in sales for 2011 and 2,400 domain names.

While Sedo may not regard the percentages to be significant I still think including these sales are improper and misleading.

Comments

  1. Francois says

    I am astonished they maintain their position on that.

    With all due respect I think it’s insane to associate escrow sales with marketplace sales and they are misleading everyone acting this way.

    - First this mislead clients who probably think privacy is the default rule (as it should) with an escrow service.

    -We have no way to ensure the real percentage escrow transactions have, so weekly sales comparison between marketplaces that bloggers report each week is no longer accurate while they persist mixing both.

    They argue “transparency” to motivate this behavior but for me it’s the inverse.

    Sedo.com, there is no doubt you are the first or second domain marketplace in sales volume, you’ll be top class revising your position on that point and this I am sure will not affect your notoriety, at the inverse.

  2. The Shoulder says

    They have proven that they can also monetize for privacy. From their site.

    “… The buyer may choose to further pay a privacy fee of 2.5% of the purchase price to request the non-release of the domain and purchase price … “

  3. says

    When should privacy be the default?
    I have an auction for Villa.co.za currently running at Sedo, and there is absolutely no information on the bidders at all. Obviously the default.
    It is strange how after the auction it is not the default anymore? When does this change from private to not private take place?

    As regards the escrow transaction, I hope Ron Jackson at DNjournal credits the correct marketplace with the sale in his reports? Currently however it looks like a very large slice of sales are via Sedo! Is that the real picture???

  4. domo sapiens says

    I don’t think it takes a ‘rocket scientist’ to establish 2 categories for accurate reporting ;

    Sedo Marketplace sales

    Sedo Escrow Service transactions

    I am also not buying the 6%.

  5. Back in the real World says

    Michael -

    Nice write up, 60 minutes beckons.

    Did you take down an article reccently? There was another auction results listed here that seems to have gone missing, or do I need meds?

  6. Alan says

    How about a their new GoDaddy/MLS policy?

    Did you know that if you sell at a “fixed price”with a “buy now” option you are “automatically” enrolled and the commission rate jumps from 10%-20%?

    May not be a problem for some, but I think sellers should have the option to “opt out”. The
    reason I, and a lot of others “park” and list our names with a “fixed price”, “buy now” option is so we can minimize the commission rate!

  7. Jp says

    I like that more external sales go on the record with this (as long as they are not supposed to be private!) but I don’t understand why not just put an asterisk next to external sales in their weekly reports so everybody knows which is which. Would it be that hard? Or make a Seperate list at the bottom of the email. Who knows maybe they’d sell more escrow jobs if we all saw how many they handle regularly and what a great job they are doing. This one’s not rocket science.

  8. Fran says

    I know of several domain sales that they were a escrow sales. For example: Juegostonic.com, $95000 it was a escrow sale but Sedo included in the weekly list.

  9. says

    Here’s me asking the all important question.

    Why does it matter what they report? It’s not a financial audited statement, is it?

    I’d be more concerned with disclosure of confidentiality… NDAs are the bedrock of the domaining community!

  10. Trico says

    CoZa Nic sys:

    “I have an auction…currently running at Sedo, and there is absolutely no information on the bidders at all. Obviously the default.
    It is strange how after the auction it is not the default anymore? When does this change from private to not private take place?”

    CoZa Nic,

    The change from private to not private takes place after the sale
    is completed as Sedo knows any chance the Buyer and/or Seller
    will try and circumvent Sedo is gone.

  11. Emma says

    Everything about domaining is fake. The famous Domainfest could not even make $200k in sale of domains. This alone should open your brain think twice about this business. Don’t ruin your life domaining. Life is short to wait fir 20 years to sell a domain name for $10k

  12. says

    So the issue is that they say “sales through our marketplace” and not “sales through our services”. The net effect on the domaining community or the world at large is what? Will people not use Sedo? I would think violating confidence was a bigger issue – apparently not?!

    I guess they should say “sales through our services that we are at liberty to disclose” to be even more accurate ..

    but why stop there….

    “sales through our services that we are at liberty to disclose and may contain the odd fake sale here and there”.

    Now we’re happy.

    What’s next? Are we going to examine DNJournal’s method of releasing numbers? Failure to remove Halvarez names from history? Reporting on sales that are fake?

    Nope.. so what next.. the announcement that :
    “My gawd the internet has liars, thieves, and stretchers of the truth! ”

    No, probably not. So what could be next?

    Probably a Robert Cline post selling an lll.co – but I’m just guessing :)

  13. john says

    There is another thing they are doing that is just plain wrong. They report old sales in their recent sales RSS-feed, as old as several years. I have pointed this out to them multiple times but they just don’t give a shit.

  14. says

    Sedo monetizes of everything! As the domain business struggle those days companies like Sedo are playing dirty tricks to stay on top of the market! Domain name itself is not so attractive today, attractiveness comes from what is attached to the domain name!
    You don’t see big domain deals any more ,all the deals reported are at least 2-3 years old!

  15. says

    Maybe the new CEO will change things?
    But I must agree John, Sedo is a one way street as far communications is concerned. They simply just ignore you, even during the sale and transfer process.
    Guess they feel they are the biggest (or so it appears) so they think don’t need the individual domainer…

  16. says

    For Sedo marketplace sales the default is for them to be published. Used to be in account settings you could choose to set all your transactions (or was it just your sales?) to private, then that disappeared but you could email them to set them to private. Except they might then publish them anyway. So if it matters to you, never ever push a domain to Sedo until they have explicitly confirmed that that particular sale will not be published.

    It seems many use Sedo but nobody loves them. Is that the price of success or just the result of Sedo’s indifference, and an opportunity for a competitor?

  17. says

    @Jamie Zoch [..]From my understanding, Moniker reports “escrow only” sales to DnJournal as well. [..]
    I can vouch for that too, one of my sales is mentioned in dnjournals Non .Com gTLDs Top 20

    @Steve Jones [..] This has been going on for ages…/ [..] It sure has!, though for me I didn’t discover this until 07 when a seller actually emailed to congratulate me for selling/flipping a domain he sold to me a week earlier.

    He said it was in sedo’s recent sales feed, and for the life of me I felt embarrassed (as no doubt Francois maybe) knowing that the previous owner found out.

    @Michael H. Berkens
    “We will of course also continue to honor clients’ confidentiality requests, independently from the source of the transaction.

    From my lesson learnt back in 07 I can say that sedo do indeed retain sales figures from there reporting and maintain client confidentiality if you request them to,

    Below is a sample of a typical email I use frequently with their external escrow service:
    =================================
    …/
    It has been requested from myself and the seller that this transaction is to be not published in sedo’s recent sales history. Please email me (Jay) at xxxxxxxx@xxxx.zzz if this request can be arranged prior to advancing with the transaction, thank you.
    =================================

    This is the response I usually receive from sedo:
    =================================
    Hello Jay,
    I can mark the transfer as “Do not Publish´´.
    Shall I read in the escrow?
    Thanks ,

    Mira Tayar
    =================================

    This way you can avoid having the domain sold via their escrow service listed in their sales report.

    I still send most of my large sales transactions though their service, which for me (and a lot of others) is the fastest transfer agent, the safest – considering that you push domain to their intermediate account then they push/transfer to buyer, and most flexible for payment options – allowing international paypal payments (unlike escrow.com) and on top of this doesn’t require a ton of paper work to be faxed to them (like moniker’s external escrow does).

    They are number one on my list for escrow and the lifeblood to some of my biggest domain sales in their market place along with flippa.com too.

  18. Michael H. Berkens says

    Jay

    Once again this post has NOTHING to do with privacy.

    I has to do with whether Sedo should include in its sales numbers domains it had nothing to do with selling.

    Even if you do request privacy and Sedo honors your request, the amount of the transaction will be INCLUDED in their weekly totals when they publish the report of domains SOLD through there marketplace, even if all they did was act as escrow agent.

    I don’t think that’s right.

    I think that is taking credit for sales they had nothing to do with other than handling escrow

  19. says

    @Michael H. Berkens
    [..] 1/ Once again this post has NOTHING to do with privacy.
    It has to do with whether Sedo should include in its sales numbers domains it had nothing to do with selling. [..]
    [..] 2/ Even if you do request privacy and Sedo honors your request, the amount of the transaction will be INCLUDED in their weekly totals when they publish the report of domains SOLD through there marketplace,
    even if all they did was act as escrow agent. I don’t think that’s right. [..]

    I would like to point out that a requested confidential external escrow – ie a PRIVATE external domain transaction, will prevent THE DOMAIN NAME from being published in their domain sales feed.

    If you don’t request this in advance of the escrow then the domain name and the total transaction financials will indeed be (wrongfully) published. It’s clearly understood from your communication with sedo, that they will still report the external domain escrow’s financials even if the domain names from them are not disclosed.

    —-

    [..] “Sedo.com has been including domain names it acts only as escrow agent for in its weekly and annual reports of domain sales.
    This information came to light this week when Sedo inadvertently reported a sale that was supposed to be confidential and Francois from Domaining….” [..]

    I think what you may have done here is interchanged between the two issues,

    1/ Their weekly or yearly totals reporting purely in the form of a financial statement – with external domain escrows inclusive**

    2/ Their weekly or yearly totals reporting of domain names only – with external domain escrows inclusive*

    However I will or do agree with you if indeed sedo (as with moniker/snapnames external escrow) are including the escrow sales financial total as part of their profiteering, that they are deceiving the public at large – which the pair of them have done for years for reporting by default the domain names from their external escrow service as part of their sales portfolio.

    From a business sense however it isn’t the wisest thing to do considering they like any other enterprise are accountable to the IRS. :)

  20. J says

    You can count on Sedo to overinflate (IMO) everything and worry about the little things such as warning a domainer to stop what they’re doing to make few dollars on their domain parking.

    IMO, someone should look into Sedo’s domain parking share because there is a good possibility that they keep a high portion of the revenue. 

    An education click worth $10+ on GoDaddy cash parking and $3-6 on DomainAppsonly pays out
    $1 on Sedo.

    You will soon realize this company is more unethical than you think. They will also take $50 on make offer at $100. 50% commission. Insane!

    They limit their max buy it now price threhold to $10k. If you want to increase, you must pay for a custom appraisal. 

    The motivation behind receiving sales credit is to promote the domain marketplace as the top
    domain destination. This will entice domainers to list their domains on a proven platform with winning results. 

    In the writing world, their false reporting would be considered plagiarism. Plagiarism is essentially cheating.   

    As previously mentioned many times, this domain company focuses more on finishing first rather than delivering good customer service. Don’t expect Sedo to address your questions or concerns. Leave the answer up to their previous answers displayed in the predicted questions section because their team will likely point domainers there.   

    Go sell your domains on Cax.

  21. Harry says

    Since Sedo exists they include my “escrow only” deals in their sales report (maybe a 500 names so far). Eaven more there have been many sales with NDAs where Sedo was informend, and they report it and I also found them in the DNN sales charts.

  22. Who Cares says

    Who cares. This post/topic is lame. No one cares and nor should they. If you are short on subject matter and want to set the world right why not call out some of your associates; the ones monetizing typos and tms. That has more effect on the industry that what sedo claims to have sold or not sold.

  23. says

    How does monetizing typos and tms affect the industry in a consequesntial way? Ever seen a big ticket typo sale??????
    If we want a new topic, why not discuss the big corporates, who have the likes of Sedo and ICANN in their pockets?

  24. yes says

    @who cares – sedo profits primarily from the same domains you allude to. they just don’t talk about it. they will pick a few sales of good, clean, wholesome names and highlight those when they market and discuss their business. and lots of folks believe sedo is ninnce and clean. the large domainers do the same thing. out of the hundreds of thousands of names they control, they are not about to talk up their tm typos, even if those were in fact their best performers and biggest assets.

    but if you go beneath the surface, if you look at the lists of domains themselves, then you will see that if we took away all that “undesirable” business activity (people registering typos and tm’s, not to mention the adult-themed names) then sedo’s business would sink, as would many a domainer’s.

    open your eyes and see the big picture.

    sedo is just another parking company. they rely on domainers. the same ones who register typos, tm’s and adult names.

    is their marketing smoke and mirrors aimed at the uninformed? you bet.

    just like these new icann-approved registries.

    and why can all this deception take place? because ultimately icann doesn’t care. and dept of commerce doesn’t care. the goal has always been to sell more domain name registrations, not to innovate. who cares about a little deception?

    never forget the web is just one huge hack. it’s hacked together. and somehow it works, well enough, or not. but don’t expect those who market it (isoc) to say that. instead we use words like “engineering task force”.

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