Revenue domain sales - Who believes sellers should offer buybacks?

[Domainate.com]

I'm dealing with a case where I'm buying back names from a buyer because per him, they didn't perform at all and he is unhappy with the purchase. A couple of the domains were poker typos and with having some other typos of the site in question, I can confirm their performance has gone down quite a bit. Some of the others were bought on a revenue basis but priced at a high # of months of revenue because they had name value - they didn't have much traffic or clicks/mo to begin with so there's a chance they simply may not be getting the clicks.

Obviously none of the stats that the prices for the names were based on were fudged or anything, so the buyer had all the information he sought on them before he bought them. It's my opinion that buyers are taking the risk that names may not perform how they were, just like sellers are taking the risk that names may perform BETTER than they were (which I've had happen a number of times). I myself had cases of paying 4-figures on revenue domains that probably didn't make 10-15% back what I paid for them years later, but I bit the bullet and moved on because that's the risk with buying them to begin with. However, this buyer's opinion differed greatly enough to demand either a buyback or an exchange for other revenue domains after about 3 months - after indicating displeasure in their performance 2 weeks, 1 month and 2 months after buying them. I'm doing the buyback even though it's not my policy to (I didn't offer it at time of sale) and I staunchly disagree with it. I'm doing it simply in efforts to keep the buyer happy, since that's my general code.

I just wanted to see what people's opinions were since in 5 years of selling revenue domains, this is an absolute first for me. I mean it would be nice if that swung both ways - in which case I could buy back some of the ones that I know are doing muuuuuch better than when I sold them! (and I mean 8-10 times better :disappointed

What do you all think?

 

[TheLegendaryJP]

Honestly if you have been in the game long enough it happens both ways at times. You pay a certain multiple based on risk, generic or tm. Many factors need to be considered, one being longevity, tv/radio ads stop, movies come and go etc. If a buyer buys a tm name/typo and the sale is based on 12-24 months than they KNOW the risk and because of that risk ( incuding losing the name to C&D ) was reflected in the price.

In my opinion, no , no refund, assuming everything was legit there is no reason for it and the buyer should find another line of business because THAT is not the norm nor should it be.

Even on generic names at 10-20-30 yr multiples, if you buy the name and months later the ad payouts drop, who's fault is that? Bottom line if everything was legit on the sellers end than no, NEVER a refund, that would be a personal choice and personally that buyer would be exposed and a warning to others to look out for his crying.

 

[Gerry]

Bad scenario.

 

[Nomzo]

Not unless it was stipulated beforehand or the goodwill leads to future business.

 

[draggar]

There is no way to predict how a domain's revenue, whether parked or developed, will change when a domain changes hands. Even if everything else stays the same.

A different parking company would monetize differently, different keywords, and have different displays. A developed site would have most of it changed - DNS, host, etc.. which can give the site a hit on search engine results.

Personally I think buying a domain based on revenue is done so at the buyer's risk. If I buy a stock and it doesn't pan out should I get a refund for what I paid for it? Nope and neither should the seller.

This is, as long as there is no fraudulent activities going on (fake traffic, redirects, click fraud, etc..).

 

[INFORG]

It's "buyer beware" in my opinion, although there are quite a few sellers (not you) that sell at a big multiple based off of the first 30 days of stats after catching it, and take advantage of people. Many newbies don't understand that 30 days worth of stats are meaningless and especially for link pop domains or search engine traffic, the numbers will fade within a few weeks/months.

It's nice that you are buying back the names, and probably worth more to your reputation than the money involved.

 

[Theo]

What if the buyer died and his widow wanted the money back? Would you honor that request from beyond the grave?

 

[Domainate.com]

What if the buyer died and his widow wanted the money back? Would you honor that request from beyond the grave?

Only if it was Mrs. Alvarez representing Hank "the Tank" Alvarez. Then again it would probably be SnapNames emailing me for a buyback in that case.

 

[Theo]

Haha Steve, I was being silly because frankly, any scenario where you offer an item such as a domain back due to lack of performance - unless it was specifically sold with a certain performance clause in a contract - should be avoided. Typically, type-in traffic does not fluctuate much, however PPC does and hence when a buyer doesn't make the revenue you used to make when you owned it, should realize that they need to adjust their strategy.

 

[Domainate.com]

To be perfectly frank, I'm fine with taking the (non-TM) poker names back especially...that particular site is still actually going up in traffic - I think they just have toned it down on the TV commercials lately which was a big source of type-in traffic. The funny thing is none of this is anything I haven't told this buyer in response to his previous complaints about their revenue.

 

[Theo]

Obviously, if you don't feel pressured to buy back a domain that you're confident you'd do better with than before, then by all means negotiate a re-purchase - but not as a refund. That should be made clear. "Buyer's guilt" is not a valid reason to refund anything. Personally, I've re-registered domains dropped by buyers, because I was confident about reselling them at a higher price, which indeed happened later on. Domaining is a great environment one can learn and profit from.

 

[TheLegendaryJP]

I'm fine with taking the (non-TM) poker names back especially...that particular site.

You made perfect sense right up until the

especially...that particular site

:lol:

 

[Domainate.com]

You made perfect sense right up until the
:lol:

I made it clear in the first post the names were poker typos. They're of sites that don't have TM's. Obviously the ones that have TM's are no-no's. Heck, some poker sites themselves have even gotten typos of other non-TM'd poker sites...it's one of those industries where it's a lot more commonplace and "normal" than others. If sites without TM's were afforded the same protections as sites with TM's, then a TM application would be worthless.

Anyways, turns out the request was intended for only those typos and I just went ahead and did it. We'll see what happens in the coming months I guess. I mainly posted this to see if perhaps I was unaware of this being a widespread thought that buyers should expect buybacks from sellers on revenue domain purchases or not.

 

[TheLegendaryJP]

I made it clear in the first post the names were poker typos. They're of sites that don't have TM's. Obviously the ones that have TM's are no-no's. Heck, some poker sites themselves have even gotten typos of other non-TM'd poker sites...it's one of those industries where it's a lot more commonplace and "normal" than others. If sites without TM's were afforded the same protections as sites with TM's, then a TM application would be worthless.

I think you need to understand what you are dealing with more and just because there is no registered mark is no protection against a C&D etc. It is also not always a good enough reasoning. In my humble opion these ARE tm names and you are only kidding yourself and perhaps others.

Unless you own sites such as pokr.com or other extremely generic poker terms, I dont think you understand what one needs to show to determine infringement. They do not always need to have a registered mark.


For example...

Lets say there is a popular established Poker site called HappygoluckyPoker.com is in use for years and well know.

I reg Happygoluckypokr.com and tell you dont worry they never registered a tm on their name/site so it isnt a tm name....

sorry bro but that doesnt fly!

If youve been selling names like that you need stop saying they are not tm names.

 

[Domainate.com]

I think you need to understand what you are dealing with more and just because there is no registered mark is no protection against a C&D etc. It is also not always a good enough reasoning. In my humble opion these ARE tm names and you are only kidding yourself and perhaps others.

Unless you own sites such as pokr.com or other extremely generic poker terms, I dont think you understand what one needs to show to determine infringement. They do not always need to have a registered mark.

Actually, given Poker.com and PKR.com have both been established sites for quite a while, Pokr.com would be less safe than most of the names I have despite it being a typo of a generic term. OnlinePokr.com would be a better example.

I'm not saying typos of non-TM poker sites are without risk because the sites don't have TM's. I know what you're saying and for the most part agree with it - surely they could choose to come after them and prove they had rights to the names. However, thus far in this industry, the only C&Ds I've ever heard people receive on typos have been typos of sites with TMs. Same with adult, which is why gambling and adult are pretty much the areas I target typos, because most sites in both areas have their lawyers working on other stuff. Poker sites themselves are getting typos of other well-established high-traffic poker sites...but even that pales in comparison to the likes of Sedo getting TrafficZ.de or whatever it was.

 

[TheLegendaryJP]

What for me would determine if my names are just typos of generic terms or tm names is why they were reg'd. If the other site did not exist would you own the name?

Secondly are you seeing more than 12-24 months revenue, if not you are selling tm names lol


As for how agressive an industry is or is not would or should make no difference as things change quick, one email and boom! Freecreditreport.com is one recent example, when a brand or industry deciodes to C&D it all comes down fast.

 

[stewie]

I hope it works out for you in the long run...Karma rules!!!

good luck Steve, keep us posted when the stats rise through the roof!!!!

 

[snicksnack]

If you haven't provided a revenue or certain traffic guarantee, there is no reason to take back the domains. If you sell and for 18 month and the revenue goes up, no buyer would come and say, here is the money I owe you, because the revenue has increased. t is the same like buying shares or investment funds, past performance does not guarantee future performance.

 

[Gerry]

I can not see anyone, as a seller, guaranteeing a certain amount of revenue + traffic + hits + performance.

And I feel certain that no such conditions went along with the sale.

A simple matter of selling to someone in a different country can change the entire dynamics of domain traffic. Different browsers, blocks, interpretation, landing pages propagating based on search term and source - so many variables.

I think it is quite noble and honorable of you do buy back the domain.

But I also think it is quite naive and foolish, from the buyer's side of things, to think a buyer would expect you or anyone to refund based on their disappointment.

It makes me wonder what a pain in the ass this buyer would have been for you had you not agreed to re-purchase.

 

[dn-101]

Take a look at the worst-case scenarios:
1. If he were to take you to court - what are his chances to succeed?
2. Is he going to hire a mobister (not mjnells - he can't even wipe his behind) to shoot you?

My take on this: If this is just a few hundred bucks I would offer him a consolation price, of say, 25% to 50% of the original price. And I would make him write you a letter indemnifying you of everything.
And letter better be certified & notarised