A domain Escrow process for non-profits : Autism.Rocks aftershocks

It seems that the domain community is “up in arms” about the way the sale of Autism.Rocks was handled by Sedo.

Fact-checking isn’t always the norm in the domainer village, and Sedo was quickly demonized over their 15% sales fee charge instead of a 3% escrow charge.

A lot of “hindsight 20/20” statements allege that Sedo should have known better, and should have advised the seller on how to pay less money for an already agreed upon exchange.

The onus, however, falls upon the seller’s shoulders, as they are the ones defining the process and deciding on its financials.

The apparent $12,000 dollars difference in fees isn’t chump change to sustain, but the argument that it’s the responsibility of Sedo to inform the seller is completely rubbish in my opinion.

If the seller were, for example, a construction company selling to a wealthy buyer, I am certain that nobody would have been making all this unnecessary noise. But because we are talking about two independently operated non-profits focused on autism, people’s emotions are charged.

Welcome to Capitalism.

Essentially, the seller did not perform due diligence for the options available in order to complete the sale.

With the buyer being half way across the globe, I do not blame him for being on the edge of his seat. However, large transactions require cool-headed decisions and extra time to assess one’s options, particularly when they aren’t familiar with the full gamut of options available for domain names.

There seems to be a need for a non-profit escrow process, however. I’ve completed several such domain sales over the years, and it’s always been the same story: limited availability of funds by the non-profit, or claims thereof.

However, the popular notion that non-profits are financially weak, is not true. They do have limited budgets, any changes to which require decisions to be made by a board of directors.

When I sold 100.org last year, my negotiations lasted several months; the sale completed after all the options were examined and despite extensive communications, there was never a pressure to come to an agreement.

An escrow-driven process for non-profits would include several other elements, such as education of buyer and seller about the lower cost provided, along with post-sale support.

Establishing long-lasting relationships is a wise and almost mandatory process for any industry, including domain investing.


  1. Seems like an even-handed assessment of the Autism.Rocks debacle.

    From Sedo’s perspective, a domain was listed for sale and happened to sell quickly. That triggers the usual 15% commission.

    When the buyer or seller contacted Sedo customer service, I’ll bet the person they spoke with doesn’t have the authority to refund a 15% commission. After all, that commission is how Sedo pays its employees and provides web services and marketing.

    Allowing any Sedo customer service representative to refund 15% commissions would open the door to abuse. Any buyer or seller might return after a sale and say they intended to use the 3% escrow service instead. Clearly decisions about giving away 80% of Sedo’s sales revenue can only be made by upper level management.

    It would be good PR (and the right thing to do) for Sedo to return 80% of their commission in this case, since it was paid based on a misunderstanding.

    However, it can take time for these issues to reach the attention of the higher ups. Emails must be forwarded and read, or scandals must break in the blogosphere. And perhaps by the time Sedo execs realized there was an issue and a scandal, their company had already been judged.

  2. Joseph – I agree with you on all counts. It’s an executive decision, and today’s announcement indicates that there is some room to reverse the funds via a donation. In my opinion, Sedo received a lot of negative rep for this without justification.

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