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Grit.org Podcast Episode #24: Why You Should Use a Domain Brokerage

In this episode we sit down with Brian and his team at Grit Brokerage. They highlight some of their tactics and specialties in the domain industry that sets them apart. At Grit Brokerage, they pride themselves and their resilience and willingness to problem solve while putting the clients needs above all else. Enjoy this episode, share it with someone you think would enjoy it, and be sure to contact Grit Brokerage for all your domain needs!


Intro: Welcome to the Grit.org Podcast with Colby Harris and Brian Harbin. In these episodes, they speak to top achievers in athletics and business to understand the habits and mindset they apply in order to build more grit.

Colby Harris: All right, welcome back to the Grit.org podcast. My name is Colby Harris. Alongside me is Brian Harbin and we have a very exciting episode today. We are joined by Michael Law and Maureen Sullivan from Grit Brokerage, alongside founder of Grit Brokerage and Grit.org, Brian Harbin, to discuss a little bit more about the domain industry.

This is an extremely fascinating space and it's been really pivotal as an entrepreneur to learn more about it. And for anyone out there, I'm really excited for you to hear this episode and learn from people that work in the profession. So, starting off with you, Michael, tell us a little bit more about what you do at Grit Brokerage, what you do in the domain brokerage space, and a little bit more about your story.

Michael Law: Yeah, definitely. Thanks, Colby. And before getting started here, man, I wanted to congratulate you one more time on the cycle of Grit that you completed. It's been less than a week from the time of this recording. I know you raised a lot of money for underprivileged youth in Jacksonville to be able to attend grit camp during your 100 miles bike ride. I think you got it done in around 6 hours. I thought that was amazing. Great accomplishment. So big ups and congrats again on that.

Colby Harris: Thanks, Michael.

Michael Law: Yeah. So today I wanted to share a bit about outbound marketing strategy for domain names. So a big part of what we do as domain brokers is outbound sell premium domains to end user companies who we think are going to benefit from owning the names that we're brokering. So you know, I know that, Colby you and Brian had kind of covered this in a recent podcast episode, which is what qualifies as a good domain that a broker might be interested in taking on to sell. Or basically, what's a premium domain?

Now, the vast majority of domains that we proactively sell for our clients are one word and two word, typically .coms. And almost all of them are generic terms, so not trademark names like words with Microsoft or Samsung or something like that in them. Okay, so the domains we work on generally have high search volume, meaning that a lot of people search those specific words, phrases or keywords on Google every month. The words are hard to rank for in search, and they usually have a high cost per click.

So those companies that pay to rank for those specific keywords will pay quite a bit per click. Now, while we have sold many, many names via outbound marketing, I think that a lot of people may think that these are easy sales when in fact, the opposite is true. Outbound or cold selling a domain name is actually very difficult. All right?

So even if the company you're reaching out to is a billion dollar company, they didn't get there just by handing money out to any salesperson that came along. So it's a long process and in most cases it's best to be handled by an experienced broker with a good reputation. So even when you're reaching out to the perfect company to pitch a domain that you think is a no brainer, a vast majority of the time you'll either get no reply at all or maybe a no thanks. And a lot of times it's not even that polite.

So with all that said, we have successfully sold a lot of domain names through our outreach methods. And one of the names I thought would be good to discuss today is a name we had sold. It's called instantoffer.com. So Instant Offer is a super competitive keyword in automotive and real estate. So our client had acquired the name and right away they put up an auto website on it with a phone number and it was generating a few leads per month. And it also pretty quickly moved into the number two organic rank on Google for that term.

Now, once we got the listing, we identified and reached out to the top auto and real estate companies that were paying to rank for Instant Offer, as well as the ones that were already ranking organically for that term. So of the 15 to 20 companies that we reached out to on our initial round of outbound, only two of them responded and one of them happened to be CarMax.

So their reply was basically asking for any traffic or other stats that we had on the name. And I knew that the site had only been online for a few weeks and it didn't generate enough leads or traffic to really move the needle for a company of their size. But the domain was already outranking them in the organic search results on Google and those are the ones right beneath the sponsored links that you'll see.

So what I did, I actually sent them a screenshot showing the organic rank of the domain and I put a big green circle around it. Now at the time the site was on page one and it was above CarMax but right below KBB.com. So I think that really got their attention and piqued their interest. Just the fact that the name was already ranking that quickly and that high, I think it struck a chord and I believe that above anything else, they wanted to acquire it now to effectively shut out any competitor from buying it and potentially outranking them for that keyword.

Now this was kind of an interesting tactic as well, and you can use it in some negotiations. For domains, the price of the domain was in the mid to high five figure range. So when I sent them the actual price quote, I told them that it was around the cost of one late model SUV. So basically the same price as just one of their most commonly sold units and they sell millions of these SUVs a year. So I also said that the domain has virtually no carrying cost and unlike a car, it will appreciate in value over time.

Now, I know this to be true. I used to be an auto sales, finance and sales manager at a dealership and the second you buy a car and drive it off the lot, it loses quite a bit of value, whereas with premium domains, we've only seen them increase in value over time. So ultimately, they decided to move forward with the purchase of the domain and it was for an amount that was very close to the asking price. Now, I think it was a great deal for both our client and the buyer since they now have much better control over that keyword in search.

Now, I will say one more thing about the deal and almost all of the outbound sales that we close is that patience and persistence are key. While the prospect did answer my first outreach attempt, it took more than one follow up at points in the negotiation to keep the deal on track. Also when dealing with a company of that size, and I know Brian and Maureen can attest to this as well.

You're always going to have a bunch of hoops to jump through with their legal people at the end, you know, I remember that this deal, it took at least one month to get done from start to finish, so you know, it always really helps having a broker that is motivated and focused on keeping deals like this moving forward. And that's my example of an outbound sale that we had got done here at Grit Brokerage.

Colby Harris: No, that's awesome. Michael, thanks for sharing that story. And tell us a little bit more about you said it was instantoffers.com, correct?

Michael Law: Yeah, instant offer. So it's singular.

Colby Harris: And you went through a lot of different stages there and closing out. You mentioned that that's really the importance of having a domain broker when you're working with these premium domain names especially. So I want to ask you, you said you worked in auto sales back in your past. What led you into the domain industry and what have you learned from now? Like you said, having to remain so persistent and patient when helping your clients secure a deal.

Michael Law: Yeah, definitely. Car sales is a lot different than domain sales. When you get a car sales lead, you work it really hard and you're following up all the time. Now, we do, like I said, a lot of persistence and a lot of follow ups, but you do have to leverage time as well in these domain negotiations. So I guess to answer your other question is what led me into the domain space after car sales? So I actually was doing the auto sales for several years alongside my domain investing activities.

And I started brokering about five years ago and linked up with Brian around four years ago and him and know we really got the ball rolling on getting a lot of good names under brokerage, a lot of great clients, and we started working really hard. I was able to move out of the car sales and just go full time into domains.

Colby Harris: And you also said that you were actually dabbling in domain investing and you had an interest in the industry. So just to be clear, I mean, anyone can really break into this industry with either the right funding or the right knowledge.

Michael Law: Yeah, it is an industry with a low barrier to entry. I remember my first domain conference I went to, it was about probably like 15 years ago and when I got there, everybody was so welcoming and very helpful, very encouraging. I was meeting people who had the most incredible domains and I was like, where am I? Even I had this portfolio of pretty okay names that I thought at the time. But going to the conference and meeting these folks and just knowing that they were actually there to help me and really not much has changed since then. You go to a domain conference this year and you'll see a lot of those same people and the same kind of attitude, they're very welcoming towards people in the industry.

Colby Harris: Yeah, that's awesome. That's always what Brian's told me a little bit about it too. It’s very you help me, I help you, sort of industry and always willing to help each other somewhere in the middle. So thanks for that story and insight there, Michael, we really appreciate it. Maureen, I'm going to come over to you now, tell us a little bit more about what you do at Grit Brokerage and any value or insight you can share about the industry as well.

Maureen Sullivan: Sure. Thanks for having me on this. So what I do for Grit is I have something that I handle for Brian and the team called the Stealth Acquisition Program. I went to Brian about a year and a half ago and talked to him about starting up this program to help companies find the domain that they really wanted. And so we launched it. We weren't sure how it was going to go and we've never looked back since. It's been a really good success for the company.

And so I'm going to give you example of what I've done in this industry, in this program. But one thing I wanted to mention up front is think what distinguishes us for what we do is our goal is to get answers for our clients. Might not be the answer they want to hear because of the price, et cetera, but that's my number one goal. And Brian it’s what that we want to get our clients answers and they are really happy when we're able to do that, even if it might not be what they want to hear.

And the other thing I would say that distinguishes me and I actually really like doing it is I dig in to find the ownership. It's very often that there's privacy everywhere on domains now, but I will go dig in, look at history, et cetera, to find the answers of how I can get a hold of the owners. So the example I'm going to give to kind of show you how I work is it's a domain we sold last year called Hilmar.com, and we had a company approach me and say that they wanted to be in total stealth and have us help approach the owner about buying the domain name.

And so we put an agreement in place, and I started to reach out to the owner, and wherever I looked, I just hit a stonewall. Wrong email, wrong phone number, no LinkedIn presence, no social media presence, et cetera. So I wrote in to the buyer. I said, hey, I'm digging into this, looking to see what I can find, but it's not looking really good at the moment. We got on a call, and the buyer had a marketing background. She said this person had a presence in his industry and was known, why don't I dig around for PR and marketing articles? I said, that's a great idea. She said, why don't you go, I don't know, look up Airbnb? I was like, okay, never done that before.

So I went and looked up Airbnb, and then VRBO and Bam. That's where I found the guy. Found a current phone, current email, and his little chat area for me to talk to the guy. So I called up the buyer again. I said, I've got some good news. I've found the guy. But here's the problem. I've got to go to him and act like I'm renting a property versus domain name to get them to respond. So the buyer said, do whatever you have to do. So I reached out actually, before I contacted the owner, I reached out to a friend who goes with her family every year in March to Florida. Sent her the rental and said, would you be open to taking this and renting it? And she said, sure.

So I had a backup plan. So I actually wrote into the rental property, and the owner got back to me within an hour, said the dates I wanted were available. What else did I need? Says, great. Let me know. So I realized I was at a crossroads at that point, because if I went and then made the conversation about the domain, person could completely shut me down and say, you're invading my space.

So I double checked with the buyer, made sure they understood this is either going to go forward or it's going to completely stop. They said, go for it. Wrote in, told him, I'm really looking for a domain name. And I waited, I think, a few hours for him to get back to me. It was the longest space of time. And he wrote back and said, that was so clever and ingenious of you to find me this way. Thanks for inquiring about the domain. I really appreciate it. It's not for sale. And I pushed a little bit and said, everything's for sale, could you at least give me a price? And he said, it's our family name, I wouldn't sell it for under a million.

So that was not going to happen. And I went back to the buyer and we increased the offer a little bit and I went back and the owner, I thought the owner would just shut me down, but he said, I realize you're really serious here, and he cut the price in half. Then from there we negotiated back and forth. But we got to a point where we stalled out and to Michael's point, I mean, we were at least a month into this at this point.

And so I went to the buyer and I said, look, I think the only way we can move forward and this is an important point to bring up because I don't usually do this. I said, we need to let them know it's you. I think it would work to your advantage. They sees who he's selling it to and it's its own story about, wow, I sold my name to this company and I said, what if I just tell them to search on Google and never say who you are? She said, OK, we can do that.

Next thing I know, I told the owner that he saw who it was and he was all in. He's like, this is a great story, I want to share it right from the start of how you found me. And the next thing you know, we negotiated and came to agreement to a price that the buyer and seller were really happy at. So that's an example of what I do every day, a unique story and I hope that's insightful.

Colby Harris: Yeah, absolutely is. And it sounds like you really take the Grit Brokerage name to heart with the grit and that being the true power of what you do. And is that where based on that story, you would say that's really where Grit Brokerage again separates from other brokerages, is going above and beyond and making sure that everything is for sale, everything's negotiable and trying to lead your clients all the way down that road?

Maureen Sullivan: Yes, absolutely. And like I said in the beginning, I can't tell you how many clients, even when I go back and say it's not for sale or the price is a million dollars or more, how grateful they are that we got them the answer, because then they can stop and say, okay, we need to go in a totally different direction. This domain is not going to be ours. And yeah, the grit part of it is definitely true.

Brian Harbin: Yeah, it's like Sherlock Holmes meets sales person, you know. You got to investigate and then, you know, when to push and lightly nudge. He said no, but is it really a no, yeah.

Maureen Sullivan: Yeah. And to take that risk of like, am I going to get this guy to agree to even respond? Back when I started with a rental property request, I think another piece is really building rapport with the buyer, because by doing that, you can get them to kind of agree to the path you need to go to get it done.

Colby Harris: Yeah, that's awesome. I love that last part, too, about just building rapport, right, of making them feel comfortable. I mean, this is sensitive information and just like you said, some of these are family deals, family names or things that they really hold close to their heart, something that they wouldn't necessarily think they would sell until you have that conversation with them, build that relationship as well.

Maureen Sullivan: Yeah.

Colby Harris: Well, thanks for sharing that, Maureen. We really appreciate all your insight as well and everything you do here at Grit Brokerage. I'm going to now kick things over here to Brian. And Brian, I know you have a little bit more that you want to share, so go ahead and just dive into really your topic of discussion today. We've done one episode already, so I'm interested to see what you want to bring today and talk a little bit more about the domain industry.

Brian Harbin: Definitely. So, yeah, it was great just getting to hear Michael share kind of on the sales side, doing the outbound and then Maureen with the domain acquisition and just how the two are different, but they complement each. You know, one of the challenges that we face as domain brokers is really the large gap between what a buyer expects to pay for a domain name and then what the seller is looking for. So a big piece of our value comes in in terms of educating that person on why the domain is priced the way it is and really helping bridge that gap.

And to further that challenge is the fact that a lot of times the person that we're explaining it to is going to then have to turn around and explain it to somebody else, whether it's a business partner, whether it's a boardroom. So we have to explain it in a way that's simple enough for them to understand, but then to be able to convey that to a much larger group.

So, for example, recently we sold a domain name, Kang.com. Kang.com, the lady that was selling it, she ran it as her consulting business for a couple of decades and got to the point where she wanted to sell it. And the asking price, we had a price at 189,000 and there was a couple of dozen different prospects for it, and one of the prospects was Kang Fr, and they had like 50 employees based out of France. And the CEO replied back and he made a $15,000 offer for the domain, right? So obviously a huge gap there.

Well, fortunately enough, he was interested. Enough, he got on the phone with me and one of the things from the insurance business I was in insurance for over a decade, and one of the things that we would do in insurance sales was we call the crystal ball close, right? Where we would kind of paint a picture of a couple of different scenarios in the future. And all of those led back to why they should end up buying it.

And so kind of, I did a similar type process with this guy where we were on the phone and I said, well, let me share with you a couple of different scenarios here. Let's say that you buy the domain name today, and then let's say a couple five to ten years down the road you use the domain, but maybe it wasn't a total game changer. Let's say for some far off reason, it wasn't a total game changer. And then you got to a point where maybe you sold the company, but you still had this domain name. It's like, well, domains have an inherent wholesale value.

So for example, with your $15,000 offer, we've already had investors offer four to five times that amount just based on the fact it's a four letter pronounceable .com domain that's only going to increase in value over time. It's the 6th most popular Korean last names. There's a couple dozen companies that use it. So even if you were to sell it down the road, it's one of those, like Michael said earlier, it's going to be an asset that appreciates over time that you're going to then be able to turn around and sell.

So let's say another scenario. Let's say you buy the domain name today and then a couple five to ten years down the road, this domain was a total game changer for you. And the fact that the value of this domain name, you really couldn't even put a price on. The fact that the credibility factor of going from a Fr to a .com, the fact that all the marketing gets easier with a premium .com domain name, the cost of acquisition of a client goes down. So there's just so many inherent values with it that you can't even really put a price tag. Even if somebody wanted to buy it, you would give them some insane number because of how much value it brings. So that would be scenario two.

In the last scenario, let's say you didn't buy this domain name today, and then a couple to five to ten years down the road, you knew that you wanted to buy it. But then let's say another company with Kang had come in and scooped it up and they're just not going to sell for any price. It's totally off the table, not even an option, whatever price you give them. Or let's say that maybe an investor did buy it and they slapped a ten x price tag on it.

So now it's going to be way more expensive than what it is today. So really, what this crystal ball tells us is that any way you look at it, the only way you lose is if you don't buy this domain name today. So then it's just a matter of figuring out how to pay for it. Then you kind of put it back on them. And being a large enough company, sure enough, they came back with a six figure offer and we're able to get the deal done. So I think it's just important.

A lot of times when you're trying to help bridge that gap is help people understand how this plays out. And I think that's one of the benefits of being a domain broker is we have seen and experienced all of those different situations. I mean, we had people on the buy side like, yeah, I tried to buy this domain years ago and it was a third of the price. Well, that's exactly how this business works. It's an appreciating asset or I tried to buy it years ago, but this guy won't sell it to me. Like, well, that's just kind of how it is sometimes.

And so I think it's just important when people have an opportunity to buy a domain name at a very reasonable price, it's kind of up to us to kind of explain how this is going to play out. And I think a lot of times that helps them get over the hump of why it makes sense to go ahead and buy it. In fact, too, just nowadays there's so many different ways to finance and pay for a domain name and bury it through just the cost. If your company is already bringing in revenue, then you can easily bury the cost of the domain name as it is. So I think that's just a helpful thing on the sell side. But also, if you're looking to buy a domain name, think about those different factors.

Colby Harris: Yeah, well, one thing that comes to mind there that I'm a little bit curious about is you mentioned obviously increasing the value of a domain name, right? If they buy Kang.com, you build from 50 employees to 200 employees and an international company, right, you've increased the value. Is it often that you ever see a company purchase a domain name, build a business around it? Technically, at their peak, it could be worth a seven figure domain. Do you ever really see many reversals?

I guess because you lose traffic if a company starts to fall apart, will some of these companies, if they build up that domain, will that value kind of hold well when trying to sell the domain? Or I guess it's kind of an intrinsic value to the company? What do you have to say in that regard?

Brian Harbin: Yeah, I would say it would depend. I mean, if you have an exact match product, let's say like some type of phone cases .com, for example, that maybe ten years ago would have been worth a lot of money. But then again, over the course of time with Amazon and the way that now people can go and buy products directly through know there's some situations where maybe they made a lot of money on it before and it was worth a lot, but then the way that they're able to monetize it now has maybe changed. But I would say that's usually an exception to the rule. I'd say in most cases people can buy a domain name, bring traffic to it and add significant value.

Colby Harris: And there's probably someone looking for it regardless, right? Just like Maureen just mentioned is if someone's looking for it, then they're going to be willing to pay for it pretty much outright. Any other comments you want to make, Brian, before we wrap up here?

Brian Harbin: No, that's pretty much it. I think it's helpful just to kind of see the different aspects of the business and why it is helpful to have just the years of experience, I mean, combined between it's 35 plus years and really all the different scenarios that you can come across and all the different strategies that you have to employ. The fact that there's a domain conference coming up later on this month and it is a relatively small industry, and the fact that it's just easy to it's just helpful to have those connections in the industry to be able to have someone to call if you need to get information.

Colby Harris: Yeah, absolutely. Well, I think it's just very valuable even for any entrepreneur or business owner, even employee out there trying to make the company better. I mean, as a young guy over here, I'm not necessarily the first one to think, hey, we're starting a company, let's buy the domain. And as many entrepreneurs as I talk to, that's not what they're talking about either yet. Now, I've learned from these conversations with Brian and now with Michael and Maureen just how important that is. And so I think it's a very important topic to have with people to understand just how valuable it is even not just the last decade, two decades, but the next century, so…

Brian Harbin: But even to bring things full circle too. Even when you came up with the idea of cycle of grit, first thing we did was go buy the domain name and drove all the…

Colby Harris: Set up the website.

Brian Harbin: Yeah.

Colby Harris: So it's what everyone needs. And I enjoy these conversations. Just as I mentioned, I think that there's so much value to obviously everyone says we're trading attention now, right? That's the number one commodity we're trading every day is attention. And I think unless you're directing that attention to a website, you're missing out on a lot of opportunities. So Michael, Maureen, thank you for being here today, Brian, of course. Thanks for being in the studio with us. This has been a great show.

Of course, if you need any more information about Domain Brokerages, you can visit gritbrokerage.com. Me and Brian actually did an episode about a month ago now that you can view as well. So if you enjoyed this episode, be sure to leave it a like, share it with someone you think it would resonate with or impact. As always, we appreciate you tuning in for another episode of the Grit.org Podcast!

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