Tobias Ratschiller's Blog

Domain brokers come and go quickly. A new one contacts us each week. It's the easiest way to get started in the domain business without upfront capital investment. Unfortunately, the people with no money to invest are usually also not the best sales people ever, so the actual turn over rate is low. Even if a domain broker is really good, there are a couple of problems:

• The time investment is significant if you do it right. You would have to do market research, contact end users, advertise. Just sending the name to five of your previous buyers and putting it up on your mini site does not make you a good broker. 
• Most domains sell in the $1,000 - $15,000 range, making commissions unattractive for a single broker or small team. You have to turn over en masse and you would do that by building a marketplace platform like BuyDomains or Sedo, not by single-handily brokering names.

Earlier this year I tweeted a quick advice to all domain brokers out there: Specialize in website brokerage now! I believe there is a significant opportunity for any player entering this market. The leading market place Flippa is overfilled with low value and sometimes downright scammy offers, and domain market places like Sedo simply don't get the website business.

Indeed, Rick Latona switched recently to brokering revenue-producing websites. Here's though six things that I would like to see from a website broker (and this comes from a background of acquiring by now over 75 websites):

1. Verified Google Analytics, and earnings with a stamp of authenticity. Every website investor must still do their due diligence) but when reviewing brokered listing you should be able to assume that at least sources have been verified.
2. Informative offering pages with background on the business and owners. The one paragraph descriptions at Latona's just don't cut it. I would like to see a combination of owner-supplied listing text and a broker description similar to the Flippa-A-List mailing list.
3. Give uniform information about businesses. In an ideal world the broker should work with each owner to create a uniform set of financial data and traffic figures.
4. I'd suggest that brokers focus on high value names with asking price of $50,000 and above. Flippa is okay for the rest and if you want to do a good job as broker, the amount of work you will have to put in does not differ much whether it's a $10,000 or a $200,000 sale.
5. Brokers need to work actively to promote listings beyond their website and mailing lists. Please give details on how you intend to earn your 15 percent.
6. Be transparent. I would like to see your closure rate. Average sales price. Time to close. Team size. Etc.