My First-Time Experience Selling a Domain Name: What I Learned and How This Deal Funded My Startup

Picture made with DALL-E using a prompt “digital art of a handshake over the screen of computer showing the web browser”

Selling a domain name for the first time can be a whirlwind experience filled with excitement and apprehension. I recently navigated these uncertain waters myself, and it was a ride to remember. While I faced many complexities — like finding a buyer, negotiating, and finally securing the funds — the satisfaction of completing the sale successfully was truly rewarding! In this story I write you about protecting a seller of a domain name, which I feel is a less-talked-about aspect of the process. I’ll share insights on how first-timers like me can not only make a sale but also ensure they’re not left vulnerable.

Four years ago, I was contacted by a potential buyer interested in a domain name I owned.

Screenshot from Gmail showing the first message I received from the buyer in 2018. Names are blurred by myself to keep buyer’s privacy.

Nothing special about this domain: it was a numeric, four-letters .io zone domain name. The domain wasn’t a drop-off so it wasn’t been used by anyone previously. To be honest, I’m not a “professional” domain squatter or what. I had bought this domain for myself. So I hadn’t had any plans on selling, because I loved the name and wanted to use it for my own pet projects. Honestly, it looked very nerdy! I supposed that nobody would ever get interested in owning this piece of domain registrar records.

Until the actual buyer came.

The buyer found my contact through the WHOIS and wrote me an e-mail.

WHOIS is a protocol for querying a database that store an Internet resource’s registered users or assignees. These resources include domain names, IP address blocks and autonomous systems, but it is also used for a wider range of other information.

The deal didn’t feel right. $100 for the perfect nerdy domain for my pet projects?! It’s like a selling a pile of gold for a dime!

I declined the offer.

Fast forward to this year, and the same buyer reached out to me again. This time, the terms were more appealing. Finally, after negotiations the price grew up x40 from the initial offer. Wow! I felt it was the right opportunity to sell!

Okay, we shook hands gently via e-mail and what’s on?

I felt uncertain about how to securely proceed with the domain transaction.

This is a moment where escrow services come into play. Using an escrow service is pivotal for ensuring a secure, transparent, and mutually beneficial transaction when selling or buying a domain name.

For the seller, me, an escrow service provides the peace of mind that the buyer’s funds are secured before transferring ownership of the domain.

For the buyer, it ensures that they will actually receive the domain they’re paying for.

So, the service acts as a trusted third party, holding the buyer’s funds until the domain transfer is verified and complete, and only then releasing the funds to the seller. This eliminates the risk of fraud or default from either side, making the transaction process smooth and worry-free. In essence, using an escrow service safeguards the interests of both parties and is an indispensable tool in the domain trading world.

I chosen an Escrow.com as an escrow service, because I unable to google out something else, sorry. Shoot a comment, please, if you know any better options!

Escrow.com: A Seller’s Best Friend

You don’t want to transfer a domain you love to a stranger and receive nothing, right? Do you like to send money and get nothing too, don’t you?

Selling a domain name is a chicken-or-the-egg till you go to Escrow.com.

Escrow.com — How it works? Infographics from the official Escrow.com website

No, I’m NOT affiliated with Escrow.com in any way. They have a great product that heals the pain so hurt that one may lose consciousness!!!

After the sign up Escrow.com requires to pass KYC. The entire process is very straightforward like providing some bills and a valid identity of yourself. It took maybe a hour since first upload of smartphone shoot of my ID till the green light.

Once I got approved, I hit the “Start New Transaction” button and filled-in a simple form with terms of our deal. After that, I got a special link that I shared with a buyer. Now it’s time to relax — I passed the ball to the buyer’s side.

Escrow.com Concierge Service

Escrow.com proposed a Concierge Service for the domain transaction. As a first-time seller I decided to use this service just in case.

It is quiet pleasing that you can pay an additional fee and get the priority support and cheerleaders all around. Looks like it works for both sides of the deal. Another great feature of Escrow.com is that you can choose who will be charged for any additional fees or for this service itself.

I cannot remember how much time required buyer to pass KYC and pay the bill. But the entire process of selling and securing funds took only 7 days. I received funds on my banking account few days after this period.

Well done!

Fun things about domains and businesses around (or behind?) them

1. FB.com was bought by Facebook Inc. (Meta Inc.) for $8.5 millions. There is a great post about the deal by Alexia Tsotsis on TechCrunch.
2. MarketResearch.com estimates 431 million of domains being sold in 2022. So, it’s some billion dollars market.
3. Dan.com, the platform for domain names, was acquired for $71.4M by GoDaddy in 2022.
4. First registered .com domain name on the internet is Symbolics.com. It was registered by Symbolics, Inc., an American computer manufacturer, back on March 15, 1985.
5. The biggest problem of the domain names as assets is a liquidity. It’s very hard to find a buyer for any explicit domain name. While there are 1,000s of domain listings out there, chances to find a buyer are still hair thin. Some insights into this market available at Afternic (another GoDaddy’s brand).
6. Anguilla, a small Caribbean country part of The British Overseas Territory, generated $2.9 million of total revenue out of selling .ai domains in 2018, as per New York Times Report.

TL;DR

1. Domain names are not just a way to sponsor governments or corporations and to receive beautiful home on the internet. If you deserve a kiss of fortune, you’ll be able to sell the domain with profit!
2. When the stranger knocks the door with a good deal, work it out with escrow. Never agree directly, since there are lots of scammers and schemes out there to get you robbed for a domain name.
3. Domain names turnover is a some billions dollar market!
4. Escrow.com is a great service over all and the Concierge Service is handy and clever feature that assist you making a deal with strangers out there.

Have you ever sold a domain name or a digital asset of other type? Share your story in comments!