Preselling Domains
December 17th, 2008The idea of preselling a domain name before you’ve even acquired it, is certainly not a new idea. I know several Domainers who have done this (including myself, once). Its a challenge and a risk, but clearly there is a reward if you are successful.
There are also major problems when you are not. In the simplest form you can agree in principle to sell a domain name, then once acquired, the buyer changes their mind. At this point your stuck with a domain you thought was already sold and desperately looking to offload.
An issue was brought up on NamePros forum regarding a new form of this method. The issue revolved around the domain name DMG.com. This domain was dropped and captured by SnapNames. One of the bidders prior to the auction completing, contacted out a potential end-user offering to sell. If this has been "right", he would have learned how much the end-user would pay and could have bid anywhere up to that point.
However, this concept failed miserably. He alerted a Trademark holder to the auction and they have threatened litigation to obtain the domain. Now whoever does win the domain will more than likely be facing immediate legal action, potentially losing this domain name or even just being out the legal fees of defending themselves.
Despite the ethical questions (and there are many), Preselling domain names is a questionable practice that can be very damaging to other domainers. I recommend avoiding this strategy.
Justin
I can’t help asking why is that domainers go to such extreme and unnecessary length to operate in an unethical and sometimes illegal manner.
Here in the UK, it is illegal to try to sell something that you do not own.
These so-called tricks and secrets are killing the industry in a slow and painful manner.
Comment by Kevin Jackson — December 17, 2008 @ 11:04 am
Kevin,
It is certainly a problem, one I hope people learn about not doing.
Justin
Comment by admin — December 17, 2008 @ 11:23 am
This is a pretty risky path to tread selling assets you don’t own or have the money to purchase yet are committed to do so.
Not something i would personally get involved in as i’m quite a risk averse investor. The number of Wipo cases seem to be increasing as well - will any of us be safe in the future?
Comment by Namecake — December 17, 2008 @ 11:49 am
If this is like a “short sale” for equity? If it is, then the only possible way to do such sells is by establishing “Clearing House” that will regulate the market. But it is probably impossible because the domain name are unique not like equity shares.
Comment by iMonad — January 24, 2009 @ 5:13 am