Domain Sellers, I need your help

OK, hi.

Basically, I'm thinking of starting a small service that runs here on DP where I act as an escrow service for domain sales. The process would be:

- Buyer/Seller agree a price.
- Money is sent to me
- Domain is sent to me
- I send money to seller, and domain to new owner.

OK, so, yeah, simple enough. I think people will trust me to act as an escrow service because of my iTrader and reputation here on DP, but I have a couple of questions for the people who want to sell the domains.

a) How much would you be willing to pay for this service? I would take a percentage of the money, and then add it on top of the money for the domain. I was thinking around 10%, so if the domain is being sold for $100, I'd take $10. I wouldn't take it out the amount though, I'd add it on top.

b) Which are the biggest registrars? Obviously I'd have to go and signup at them so that I can push the domain.

c) Would the above system I mentioned work? Or should I just take the money, then the seller pushes domain to the buyer and I send the money?

Rep will be given for useful answers.

Thanks,
Simon

 

Really good idea but I do not think that it will work just like that, there is much more to it. I will give you some tips:

1. Sedo already offers a similar service but charges just 3% which makes your 10% too expensive. Although Sedo has a minimum fee they charge.

2. How will you be accepting payments and how will you protect yourself? There is a lot of fraud around, a lot of research would need to go into that because domains are being stolen on daily bases, people do charge backs on their credit cards when they pay via paypal.

3. Even though you are an established member it would be difficult to get people to trust you, I mean I wouldnt personally transfer a domain thats worth $500 to you. So you could start via offering small escrow services for up to $50 maybe do the 5 first for free and then start charging once members start trusting you.

4. It could be an idea to get a website online to show that you are serious.

5. These are some of the biggest registars: Goddady.com, Moniker.com, NameCheap.com, Dynadot.com, Answerables.com, Name.com, Enomcentral.com

6. Normally the buyer transfers the money over to you and the seller transfers the domain over to you. Then you transfer the money to the seller and the domain to the buyer as a escrow service.

7. Also Namepros.com would be a better place to establish yourself and offer this service if you are going to be serious about it.

I hope I gave u some points to think about.

Enjoy and good luck!

 

Hi hecto, thanks for your great post, very informative and I've repped you

I was only planning on doing small deals (up to $250 or something like that), so I think something around the 10% mark is reasonable, or I could do it as a set fee, for example:
- Domain = $0-24, I charge $5
- Domain = $25-50 I charge $8
Not neccessarily those figures, but just an example.

I was thinking about this earlier while I was out and I think it might be a better system if the domain doesn't go through me at all, so, basically, the system goes like this:
- Buyer sends me the money.
- Seller sends the domain to buyer.
- Once I receive confirmation that the domain has been sent, I send payment to seller.
I thought this because with the original process I suggested, I think I'd be forced to hold the domain for around 60 days on some registrars, so that might put people off. But then, I can see the potential problems with this, for instance if the buyer refuses to accept they've received the domain(s)...

As for the website, I was thinking that for starters I would just do the service on DP. I know there are a few services on here that would usually have a website, and have been successful by just doing a thread on DP. I think if I got 5-10 happy customers, people would start to use my services more and more. If it went successfully, I would expand to my own website and other sites such as NamePros.

Protecting myself is probably the tricky bit, thinking about it. Does anyone have any suggestions? Maybe I should hold the money for a certain amount of days, then send it?

All future replies much appreciated.

(hecto, by the way, on your domain blog you've spelt 'earning' wrong in the title )

 

I am a bit late.

The minimum fee sedo charges is $150. Don't trust me, check their price list.


Ok Simon, coming to you, take my sincere advice and if possible, stay away from this. I know you have a good itrade but its not worth indulging in a business which is full of scammers. I had a domain auction site on which I was duped of with $700 and trust me, I lost that money. All thanks to PayPal.

There is lot of competition in the domain auction and escrow business these days and the major players like sedo, aftermarket, tdnam etc are dominating the market. BTW, you will never hear of any scam happening at these sites because they are big companies, they have lot of money and they have a dedicate team which looks after all this.

And then there is also escrow.com that already offers this service and there minimum fee is $25.

But if you still want to, then here are my suggestions:-

1. You collect the money from the buyer and at the same time also collect the supporting documents to make sure that there will be no charge back later. You will need to collect the following payments from the buyer:-
   
   
   • a. The price at which domain was auctioned.
     
     
   • b. The transfer cost of the domain depending on the extension. E.g. $9.99 for .com, net, org, info, biz. Not applicable if the domain is going to be moved between the same registrar.
     
     
   • c. Add a 3.4% + $0.30 paypal transaction fee on a + b = c, which is the total amount to be collected from the buyer.
   
   
2. You will need a registrar who offers you domain locking from backend. This means that when the seller transfers the domain to the buyer, the buyer will not be able to do anything unless the lock is removed. And I am sure no registrar will entertain you, not even godaddy because I had approached them with this concept.
   
   For this I can help you. With my site ruchiedomains.in, you can transfer the domain on behalf of the buyer and I will lock it. This means that the buyer still will be the owner of the domain but he will not be able to transfer it nor perform any actions on it like modify registrant details, change name server etc.
   
   
3. Once you have verified everything, you can request for the lock to be removed.
   
   
4. You will issue the payment to the seller after deducting your commission. For e.g. the domain was auctioned at $100. So considering 10%, you will pay him $90 only.
   
   And this is the correct way. Commission is always payable by the seller and not the buyer. As regards to the commission, I think 10% is reasonable amount.
   
   And most important, you need to mention the seller that the payment will be made after particular no of days and not immediately.

Hope you find my suggestions useful.

 

I would make sure you push the domain if you don't and the seller takes his time to push or something goes wrong then its on you. You couls also become a broker people send you there domains they want to sell. You would need a site or just sell the domains on DP? I have a few more ideas on this. Let me know if interested.

Steve

 

First of all thanks for letting me know about the error, I changed it lol, but keep reading my blog I will be updating it often with a lot of good info

I think the idea with the set pricing is good and could work well.

Before starting this you should read up on domain scams and build up a set of rules which both buyers and sellers needs to follow. I have lost some money through Paypal scams, paypal is really disgraceful when it comes to protecting the recievers. However not accepting paypal would cost you a lot of business. If you have to keep a domain up to 60 days to protect yourself then you should, getting scammed will not feel nice.

I would also include screenshots as part of your service and send them to both the buyer and the seller.

I think you have a good point here but it can be made to work if clear and simple rules are followed such as do not accept paypal unverified buyers, but there will always be risk.

 

Steve and Aloksharma, thanks for your replies, means a lot, repped you both. The problem I see with me holding the domain is that a few (if not all) make it so you can't resend a domain within 60 days of receiving it, which could cause some problems.

Maybe it could be an idea for me to set up a new account with the registrar every time a domain needs transferring, then putting the domain in that account and handing over the user/password to the buyer?

Steve, being a domain broker is very tempting, but at the moment I simply lack the contacts to be able to do something like that. I've bought a domain that I think is really good for a project like this (bought it just now), so hopefully I'll get some sort of recognition in the domain world if that kicks off, then I'd look into doing a service such as brokering.

aloksharma. Yeah, you've put it into perspective a bit about how hard it might actually be. I think the building of reputation would be the hardest bit, but I'm sure after a few deals

 

Yup thats exactly how Sedo does it and you could do it that way.

 

No problem. I just went on to try and subscribe but there's no feed button. Once there is, PM me and I'll subscribe

The screenshots is a very good idea, those little touches that make the whole service better. I agree the potential to be scammed is big in industries like this, but there must be a way to protect yourself as the big names such as Escrow would be losing loads by now?

I had the same thoughts about Paypal earlier, but like you say, I'd be cutting out 90% of my business before even starting by not using them. Also, I'm sure the vast majority of customers would be fine, just the odd few who tried to scam?

How would I know in advance whether someone was verified on paypal?

Thanks again for your reply

 

Good point! I added a new theme to it! so check it out and let me know what u think.

You should be able to tell between verified and non-verified. You should be able to see it, but you are not protected as a reciever because a domain is a virtual product. You could think about using Paypal Masspay in some cases, this is the most safe transfer paament method when it comes to paypal, problem here is not many people seem to use it.

https://www.paypal.com/us/cgi-bin/webscr?cmd=_batch-payment-overview-outside&nav=1.1.2

You have nothing to lose so give it a try with small escrow services. You will learn along the way.

 

Friend, its not very difficult though. If you are interested, we both can work on it. I will explain you how.

1. When seller and buyer both agree at a price, you ask the buyer to send the payment as I suggested above.

You verify the payment with the supporting documents or cancel the transaction straight away.


2. Upon verification, you ask the buyer to create a free account at my site ruchiedomains.in.

Once he has created a free account, you ask the seller to initiate the transfer. From my admin back end, I will handle the transfer process on behalf of the buyer and also lock the domain. This is to make sure that the buyer does not plays any mischief in between.


3. If everything goes well and there are no problems like charge backs, the domain will be unlocked and the payment will be issued to the seller.

And if something goes wrong before making the payment to the seller, the domain can be handed back to the seller. For that seller will register a free account with my site ruchiedomains.in and I will move the domain to the seller's account.

But again friend, this is a very risk business. The major problem is with verifying the payments received from the buyer and in most of the cases it may happen that even after sending the documents, the buyer may still decline the transaction. A common concept, credit card company will always favor the buyer. If buyer refuses with the transaction, nothing can be done.

Let me know what you think about it.

 

wow you say it sincere and honest as I am not kind of the expert here,my recommendation is start to build your own site and just using DP as a backup.then "buy more trust with thawte seal or BBB or truste seal"this will add more -on your business,well I think only this my contributions for this business field.and I am sorry for my lack of comment here

 

Your suggestion is good but that can be done at a later stage. Getting a BBB seal is not easy. You need the company registration and all sort of documents. Besides, its valid only for US & Canada residents.

And frankly speaking, adding all that seals will not help prevent frauds and scams. That will just add to more headaches.

Proper planning and implementation is the only way to make this happen.

 

it would not be good for you, there is only one reason for this and it is about your security! Just assume that 2 people want to use your service one of them send you the money via paypal and the other one send you the domain, and after you take your commision you push the domain to the buyer and transfer the money to the seller after specific time assume that he buyer used a stolen credit card or paypal account, the real owner reported an unauthorized access and the money is refunded to the original owner from your account. And what will you do now!?

but you can solve this issue by using PayPal MassPay option,in this case the payments can't be refunded and I agree with the others, you should establish a website for it, so that buyer or seller should be able to fill an application form and it would be processed automaticly forexample if seller fills the application form he will confirm that he pushed the domains into your specific account on that specific registrar and he will give his personal detials such as paypal or any other payment detail and will give you the email address of the buyer. After he submits the form the buyer would get an automatic email which contains a link for him for confirmation and make the payment and both users will be able to check the status of the process.. It would not be so hard to code someting like that I think so it'd be better and much more trustable..

And you may also have a function something like that

you can accept all of the payments from all of the payment services such as paypal, moneybookers and others.. For example someone wants to use moneybookers to send the money and the sellers wants the money in his paypal account.. You can get the money from moneybookers to your moneybookers account and can send the payment to sellers paypal account so you can make editional profit! But as I told you scammers are everywhere

and for registrars there are alot of registrars and alot of resellers of those registrars.. But you may start with t he leaders

GoDaddy
Moniker
Enom
Dynadot
NetworkSolutions
Name
Register.com
1and1

etc..

Good luck

 

Yeah, I've done some thinking and I will be setting up a website to compliment this service soon.

So, with Paypal Masspay, they can't claim refunds? This'd be ideal, as it protect me from scammers, but I'd still be willing to give refunds if the deal didn't go through for whatever reason. Is this the case? Surely that sounds too good to be true?!

 

if something goes wrong you'd probably lose money, if they pay you by mass pay they also pay the fees so if they send you $50 then $50 will appear in your balance, however when you send money back you'll have to pay the fees so you'd lose some amount of money then you'd lose money. But how money people can pay via masspay? you have to use the money in your balance in masspay payments in paypal

 

As you say, a lot of people may not have masspay so it could put potential customers off. Is masspay just an addon to paypal, or do you have to go through the whole signup process again?

I'm thinking what I'll do is make a policy that all customers have to be verified Paypal customers. Agreed, that doesn't make me completely safe, but it makes me a lot safer than accepting anyone.

If I do go down this path, I'd charge in this format:
Amount to go to seller + my fee + paypal fees.

So, if the domain sold for $100, assuming my fees are 10%, it'd be:
$100 + $10 + $3.60 = $113.60. I'd then send the $100 to the seller and keep the $10, with the $3.60 going to Paypal as fees.

Good idea? Or not?

 

You don't need any additional signup but I think you need a premier or business account in order to make PayPal mass payment

if someone gets into verified paypal account then it won't protect you.

and 10% is to much IMO may be you should keep it cheap and may be you should not only charge the buyer both buyer and the seller.

Let's assume you have a table for fixed fees for specific price ranges..

$1-20 - fee $1
$21-50 - fee $2
$51-75 - fee $3
$76-100 - $fee $4
$101+ - fee $5

let's assume that you make a sale for $100

you'll get $100 for domain $4 for fees from buyer = $104 (Net: $100.68)

seller also accepts to give you $4 fee from net amount of $100 Recieved(Net: $96.80)

so you'll send him $96.80 - $4 = $92.80

and you'll earn: $100.68 - $92.80 = $7.88

so it is better than asking for 10% only from the buyer

 

Yeah, 10% was just an example. You may think it's quite high, but I was thinking of around 7%.

The problem is that I don't want to overcomplicate the situation. I could give the option to split the costs 50/50 between the buyer or the seller, but they should really organise that by themselves and then inform me of that decision.

So, just to clarifty, IF I do decide to run this service, is this a good plan?:

• Seller sells the domain for $100
• Buyer sends me $110.80 ($100 for domain, $7 for me and $3.80 for paypal fees)
• I make new account at the registrar and get the seller to push the domain into that account
• I send the login details to the buyer, and $100 to the seller.

Simple. (famous last words)

 

it's really hard to sell a domain nowadays so it would effect your business, and most of the people would like to use a service like that for the sales that they don't trust the buyer, probably with the users without verified paypal which means they would probably not use your service because you'll be offering your service to verified paypal users you may only have one chance in this case verified account holder 0 iTrader members