Aftermarket domain names: If you’ve ever tried to register a domain name with a .com top-level domain (TLD), you’ve probably seen the words “already taken.” Because of the “first come, first serve” approach to domain names, searching for an available name that fits your needs can be frustrating and involve long hours querying with a domain search. Before you give up on your plans, and choose an alternate TLD or insert dashes into your domain name, there is one more way to check whether your domain name is available.
The Domain Name Aftermarket
In other industries, aftermarket refers to add-ons purchased to accompany, enhance, or add functionality to an initial purchase. In the realm of domain names, aftermarket refers to resale of a domain name after an initial purchase, either by the original owner, a subsequent owner, or after the registration has been allowed to expire.
Aftermarket websites provide a service whereby a domain name owner can post a domain name for sale in exchange for a commission fee. Buyers who visit these sites can browse through the domain names on offer and make purchases using a secure escrow service, a process through which the registration of the domain is transferred to the buyer from the seller. Auctions are also used to sell domain names.
Aftermarket Pricing
Unlike the name that you buy that has never been used before, aftermarket domain names are most often priced according to an appraisal and what they seller thinks he or she can get, and it’s no longer one-price-fits-all. Some prices are reasonable, but many are quite high, and some have been sold for millions of dollars.
How Prices Are Determined
Domain name sellers have several choices when it comes to pricing domains. They can place them in an auction, with the result that the market determines the price. They can set a price themselves based on the return they’d like to see on their investment or some other criteria. Or they can engage a domain name appraiser. As a buyer, you can also engage a domain name appraiser, and you can use this appraisal to counter the seller’s asking price and bolster your counter offer, should you find the asking price to be more than the domain name seems to warrant. Do keep in mind that appraisals are speculative and are not hard-and-fast indications of future return on investment.
Flat Fee vs. Auction
Aftermarket domain websites have advertised prices on flat fee domain names, but may also offer listings that indicate that the buyer can make an offer. Similarly, even on auctions, there may be a minimum offer listed. There are pros and cons to each. In an auction, you may be able to close the deal with less than the seller would have ideally liked, merely because the auction time runs out. On the other hand, you can lose a domain name you really want to a last minute high bidder. Taking a look at Sedo (http://www.sedo.com/main.php3?language=us) and/or AfterNIC (http://www.afternic.com/) over a period of time will allow you to develop a feel for how the auctions move.
With flat fee sales, you can make your purchase and be done with it. But unless you can bolster your counteroffer with a domain name appraisal that the seller finds convincing, you may be stuck accepting the seller’s valuation of the domain name or walking away.
Using Escrow to Transfer Funds
In the domain name aftermarket, as with all domain name transfers (see the article “Transferring Domain Names,”) you would be well-advised to use an escrow service, whether your sale is private or through a domain listing service, you should use a domain escrow service—either associated with the site where you’re making the purchase or a third-party escrow service—to transfer your funds to the seller, as they will check that the domain has in fact been transferred to you prior to releasing the funds.
