When it comes down to domain acquisitions or sales, I observe a basic law of trading: money must change hands.
In other words, I sell domains for money, and acquire domains for money; no exchanges or trades of any sort form any part of my business model.
On several occasions I was contacted about trading, exchanging or “swapping” domains.
For my personal modus operandi, there is a high risk factor involved in such exchanges.
First and foremost, pinpointing the exact value of the domains involved is quite difficult. As assets, domains fluctuate in value, so all trades must complete either quickly, or be “coinage” domains, such as three letter .coms.
Logistically, every domain sale involves the subtraction of the acquisition cost and renewals from the final price, before determining the taxes; for domains held over a year, that falls in the capital gains bracket, otherwise it’s regular income. Trading or swapping domains complicates this process.
By exchanging domains, both parties must enjoy mutual trust. There are quite a few cases that one of the domains involved was tied to litigation, or a UDRP, or had a not so kosher past.
Such domain trades that are done casually, without an underlying agreement or contract, can become problematic in the long run. Still, as long as the parties involved are trusting each other 100%, there is room for domain swapping, if it’s done right.
No, only requires an ecop.com swaping transaction.
Francois – The point isn’t the escrow 😉 It’s the trading itself, as I explained. Trust goes beyond handing one domain over for another.
Interesting post 🙂
Trades are difficult because most people see more value in their own assets than in even similar assets owned by others.
gpm – That’s one of the issues that arise in such transactions. This isn’t like trading sports cards.
How is it different? It seems very similiar to me.
gpm – Domains are one of a kind; it’s not like you trade a duplicate baseball card, even if you find one of matching value.
People who have their heart set on something are always a salesman’s favorites. 🙂
An end user is very unlikely to have a name to trade and people who are buying and selling inside the industry often concentrate within a niche. For the latter, whilst every given name is “unique”, acquiring names that match their niche is much easier and then names are generally substitutable.
gpm – I agree, although the definition of an end-user is a bit cloudy. I’ve had ‘trade’ offers from individuals that were looking for a domain exchange and aimed at developing the one in my possession. But you’re correct, companies looking for a brand or other extension to their already established brands don’t have anything to trade, other than cash. And that is fine with me. 😀