Domain brokering tips

[munson]

Hi all,

I'm not the owner but I'm working on brokering the sale of a premium generic .co.uk domain for the actual owner. I want to do the best job I can.

My first instinct is to put it up for auction or on sedo to get the best price. I'll also shop it around potential end users.

I would appreciate any tips on brokering domain sales.

For instance, I'm not sure how to go about commission and even how to word it to the owner: "For finding a buyer its X% of the final sale price. Any other fees such as escrow and auction fees will be paid out of the final sale price".

(As an aside, I'm VAT registered, but the owner is not. As VAT is scary to the unregistered, I'll take the hit on VAT and include it in the commission payment and not add it on top.)

Thanks in advance all,

Munson

 

[fred]

Be very careful on the VAT issue. I'm no expert, but I would have thought that if this is a true high value premium generic domain and if the sales price is high, then surely if the owners share of the sale is over the VAT threshold limit, they would have to become VAT registered.

 

[munson]

Great point Fred, thanks, that hadn't even crossed my mind. If that happens, then its "good bad" news. Good in that they get a great price for it, bad in that they have to mess around with VAT registration.

 

[Jeewhizz]

That might be the case, however, a good accountant might be able to argue it as a asset sold under CGT, and there shouldn't be any VAT applicable then - you don't have to register for vat when selling a second home!

 

[deconstruction]

if a single sale pushes you over the vat threashold (and you can prove that without that sale you would not have gone over)

then you can write to the IR and explain (and not have to reg for vat)

best to speak to an accountant about it though

 

[munson]

Many thanks, I'll be sure to let the owners know to talk to their accountant. Munson

 

[doodlebug]

money loss

if you take care of the vat out of your commision then if for example you charged 10% commission and the final sale price was £3000 then the vat would be £525 and your commission £300 ?
YOU LOSE !
i suggest you tell the owner to take care of the vat !

 

[munson]

Update to the situation, I thought I was going to broker this, but it fell through

Good news is the reason it fell through was because I stretched to buy it myself, unexpectedly!

Thank you everyone for the advice, the discussion didn't quite end up where I expected, i.e. more VAT, less brokering, but thats cool, its all valuable advice, so thank you again!

 

[accelerator]

Hi all,
My first instinct is to put it up for auction or on sedo to get the best price. I'll also shop it around potential end users.

My thoughts would be to contact all end users by letter, and say you're looking to sell this domain by a given date in the future, give yourself a bit of time (2 months maybe?) to allow for everyone interested to hear about it. If you can get enough people interested, then you can put it up as an auction at Sedo.

Advertise it on all relevant forums too.

In general, contact as many people as possible and ask them to let others know you are selling by this future date.

Obviously you will get the best price from whoever the domain has most business value to, so think about that when deciding who to contact.

Hope this helps.

Rgds

Accelerator

 

[munson]

Hi Accelerator,

Thanks for all of that, it will be a great help. Regarding the body of the letter, do you have any advice - short and sweet or one of those long sales letters for example?

 

[accelerator]

If I was sending the letter, firstly make sure it comes across as professional, and then give them some facts/reasons as to why they need this domain for their business.

Give them some data, like traffic levels, keyword data, maybe even some Google AdWords costs for keywords related to the domain name, to convince them the domain is worth having.

Also, include some other recent domain name sales data to show that there is a genuine market and that a domain name is itself a valuable investment.

You'll find some useful sites to help you with the data here:

http://www.webref.eu/domain-name-trading-resources.php

Rgds

Accelerator