So a debate is starting to stir on a topic I wrote about back in 2015. Selling A Domain Name You Don’t Own – Cool or Not Cool ? My article was sparked by a post written on AntiCareer.com.
There was a blog post by AntiCareer.com which talked about buying and selling a name that they did not own. The post titled “Turning A No Into A Yes and a $5,000 profit.
Morgan Linton had touched upon this a few years earlier. Back in November of 2012, Morgan wrote, “You should only buy a domain if you have at least some form of expressed interest from one or more parties if you are looking for quick flips. If your time horizon is longer then you could buy names knowing that you’ll sell them over the next couple of years but I’d only recommend that once you have a few good sales under your belt.”
A commenter replied, “Am I understanding this right… you call businesses trying to sell them names that you don’t own??”
Morgan replied back,
@Mike – you are correct. Definitely don’t lie to anyone, just let them know that you can acquire the domain for them. AntiCareer.com discusses this technique as well in this post – http://www.anticareer.com/how-to-make-money-by-flipping-domain-names/
That being said, once you get a few solid flips under your belt you might feel comfortable buying the names and taking the risk since you’ll have a better understanding of what sells.
Now there is a discussion on Namepros with the latest AntiCareer post if this is ethical ? Namepros member Johname was correct in saying we don’t exactly how things went.
The person not clear on how the $6500 number came along and when was the money paid. This is the crux of the ethics.
There are collector car ‘finders’ that have buyers lined up before they pull the trigger on a purchase. but they offer a service their buyer cant do themselves. (unlike purchasing a domain from Sedo) And they fully paid for the car before they sell it to buyer.
This person’s premium for just looking on Sedo (or wherever) is not a ‘fee’ but instead just grabbing for all one can.
Default User had this to say, If you make the offer as if you are the owner of the asset you are lying. I don’t believe there’s any way that’s ethical – ever. The whole practice of brokering would be non-existent if this was not considered generally unacceptable. Why would anyone work for commission if they could command the entire profit margin?
If you approached a client saying that you would try and acquire that name on their behalf, or you were employed/contracted by them as a finder, then it’s different. Now you’re a broker for the buyer and how much profit you make is between you and them.
It’s subtle but important distinction.
Some people feel it is totally ethical and others don’t. I think this version of Name Arbitrage can be risky because there are certain variables, one is theft. What if the domain was stolen and listed on Sedo ? Eventually that buyer may lose the domain in a UDRP from the original owner, now how does the arbitrageur or middle man explain that ?
Another scenario, what if the seller refuses the transfer ? I had that happen on Sedo, years ago, hit the buy it now, when seller was told to push the domain refused to transfer the name. They set their buy it now too low probably and then decided to not sell.
There is also the other scenario that plays out everyday, not related to the AntiCareer post, but people trying to sell domains they don’t own. There are plenty of people who send out emails trying to find buyers using the inventory of someone they don’t know.
Example, go check the buy it now listings for LLL.com on Sedo, not make offer but pure buy it now. Then email a ton of people at a healthy profit and if you get lucky, buy the name on Sedo and push to your new buyer.
There are a lot of things potentially damaging to the original owner. What if this unknown broker/spammer happens to contact someone who has a TM on those three letters ? They may file a UDRP and use the email, it would be interesting to see if the panel listened to the original owner or just transferred the domain. At a minimum the owner may now be looked at as a spammer.
Years ago I laughed as I got an email on a .TV domain, I knew the person who owned the name for years, it was a very good LL.tv. The email was trying to sell me on the name, but the contact info made no sense. I emailed the person who I knew and asked if he hired a broker ? He replied, “No Raymond why ?” I said because someone just tried to sell it to me asking if I was interested at $50,000 ?
I think a lot of people would be surprised to know how many of their names are getting pitched without them knowing it. Problem is you really can’t find out unless you or an associate gets the spam.
Leave your thoughts on selling a domain you don’t own.
There is a post today on Namepros where people were talking about quickest flips. Rob Monster gave a scenario:
We see these deals all the time:
1. Broker finds a buyer at Price X
2. Broker finds a seller at Price Y.
3. Simultaneous close via intermediary (e.g. Epik)
4. Broker banks the spread net of fees.
There are some smart domain guys doing this on a regular basis and banking large spreads with relatively little risk because they own the domain for about 1 minute.
And now you know.
Elliot Silver did not like the example provided by Rob, echoing a lot of the sentiments I wrote about back in 2015.
Do you think it is ethical to solicit offers for someone else’s domain name without their permission?
Do you think it is legal to try and sell someone else’s domain name without their permission?
I have seen quite a few UDRP cases where the complainant cites an outbound sales pitch as evidence of bad faith. Imagine if a UDRP was filed against your name because some unauthorized third party tried to aggressively sell your domain name to a trademark interest without permission from your or regard for harming your rights. Not only would defending a UDRP incur legal costs, but even if the registrant prevails, it could devalue the domain name because a future prospective buyer would know there risk for a subsequent UDRP exists.
The intermediary also runs the risk that one party backs out of the deal and he or she could be on the hook. If the buyer backs out, the person could be left with a domain name they bought for too much money hoping for that flip. If the seller backs out, they will not be able to fulfill their sale obligation.
By calling people who do this “smart domain guys,” it might encourage someone to think this is a widely accepted practice. I do not believe this is ethical (not sure on the legal aspect ), and I presume others might feel the same way as I feel. I also think this is a risky practice, especially if they are caught doing it.
I think this can be reputationally damaging, if not financially damaging.
So do you think it’s a legit practice to sell a name you don’t own, even if the name is listed for sale?