How do I Choose the Best Domain Brokerage?

The most important thing to consider when selecting a domain brokerage is how well the broker’s services align with the client’s goals. Some domain brokers focus on buying names for clients; others devote the majority of their attention to selling names. Some brokers limit their sales to names in certain top-level domains, such as .com, while others will deal in names across all domains. Other variables, such as fees and optional additional services, also vary from broker to broker.

Internet namespace continues to expand and the ownership of domain names proves increasingly profitable, so domain brokerage services are numbering in the hundreds. While an initial search for domain brokers can make the idea of picking a good one seem daunting, choosing the best one can be a rewarding — and profitable — experience when entered into with clear goals, targeted research, and articulated expectations.

The first step a brokerage client should consider when selecting a firm is the desired outcome. Some clients are looking to sell a domain name they currently own or to buy a name currently owned by someone else. A client may want just one name or a portfolio of similar names. A client may need investment consulting about what he can expect to achieve with a particular Internet domain name, or he may already know precisely what he wants to accomplish. Discerning the type of service desired will help narrow the search, because brokers often specialize in specific types of services.

Domain brokerage firms are prolific, and the industry is growing. No centralized database of brokerage firms existed in 2010, but domain brokerage review sites are a popular and convenient way to compare firms, and can be a good place to start a search. Websites and blogs devoted to domain sales and monetization can also be a valuable source of information on specific brokerages and the services they offer.

Once a client has identified domain brokerage firms that provide the types of services he is looking for, he should be prepared to interview his top contenders. Most domain brokerage firms offer a free initial consultation, and the client should take advantage of this service. Top among the client’s questions should be fees, specifically, whether the broker assesses a flat fee or a percentage of the final sale. The client should also discern whether the broker uses an escrow service for the sale, and whether that service is owned by the brokerage firm or a third party. Escrow services generally charge their own fees that are not included in the brokerage firm’s take.

The client should also ask about the broker’s strategy and methodology, be it for negotiation, picking services, or auction bidding. Domain brokers should be upfront about their business practices. They should also be willing to provide the client with a detailed plan of action and regular progress reports once the brokering gets under way.

Some brokerage services will identify names in portfolio purchases that could lead to legal disputes. Domain names that contain or look like trademarks are frequently the subject of lawsuits and dispute resolution proceedings, and it is the owners — not the brokers — who are ultimately liable for any infringement. Having potential conflicts identified at the outset can save a client from legal headaches later on.