Two days ago I wrote about my recent sale of WestSeattle.com. Well, today I wanted to make a followup post about how that sale came about because it’s actually an interesting story.
The first thing you’ll need to know going into this story is what “seller front-running” is in the domain industry.
I’ll try and explain it the best I can:
Seller front-running is when someone tries to sell a domain name they don’t own, and then once they have a committed buyer they attempt to buy the domain name from the actual owner for less than what they plan on selling it for. Their goal is to pocket the difference.
Here’s an example:
John doesn’t own example.com, but he sees it advertised for sale somewhere, or it’s at auction. John wants to try and make some guaranteed cash so he reaches out to different parties pitching example.com at a price that’s higher than he knows or at least thinks he can buy it for.
Let’s say John thinks he can get example.com for $25k, so he pitches it via email for $50k. If someone agrees to buy it from him for $50k John then moves forward and buys it for $25k and resells it for $50k, and pockets the $25k difference.
This practice is called seller front-running because you’re trying to sell something before, or in front of, actually owning it. Someone will try front-running because they want to have profits lined up already before actually buying a specific domain.
Here’s what I’ll say regarding seller front-running and then we’ll move on: It’s a very shitty thing to do, don’t do it!
There are many reasons it’s a shady practice and why it can be very harmful to the actual owner of a domain name, or to the eventual winner of a domain name auction, but I’ll save all that for another time.
So, now that you know what seller front-running is let’s dive into what I alluded to in the headline of this post…
Yeah, I actually benefitted from someone’s seller front-running. Pretty crazy, right?
On August, 27th, 2018 I won the expired auction for WestSeattle.com. When I got the domain in my account I put up a “for sale” landing page.
On October 16, 2018 I got an inquiry on the domain name with this message: “I heard from a coworker that you solicited that this domain was for sale and it was offered at $4,000. Is it still available?”
When I read this I thought maybe the past owner of this domain name once reached out to this guy trying to sell it to him. So, instead of asking who did the soliciting I ask who this guy’s coworker is.
Turns out I didn’t need to ask who the solicitor was because this interested buyer just goes ahead and tells me in his next email and sends me a copy of the email his co-worker received. The email basically offered WestSeattle.com for sale. Emails offering domains for sale are usually nothing out of the ordinary, but here’s the thing:
This email was dated August 25th, 2018. That was during the auction at NameJet, and at the time the high bid was only at $90!!! Also, the email came from someone who has never been an owner of the domain name before (I checked whois history).
That’s when I knew this was a clear case of seller front-running. I had no doubts at all.
I actually then went ahead and told the interested buyer that I didn’t know the person that had sent them the solicitation email and I explained what seller front-running was and how it’s all too common in the domain industry.
What did I do next?
I negotiated with the interested buyer and eventually we agreed on $5,000 ($1,000 more than the front-runner had pitched the name for).
To tie it all up, I benefited from someone else’s seller frontrunning because had they not done it my buyer would have never reached out to me. My buyer wouldn’t have even thought about seeing if WestSeattle.com was for sale. In fact, before his co-worker told him about the solicitation email they had received a couple months prior he was planning on buying a different, much cheaper alternative.
Am I happy that someone did some seller front-running during the WestSeattle.com auction? Absolutely not. I very much dislike front-runners and the whole slimy practice of front-running.
Did I take advantage of the situation that was put in front of me though? You bet, and I got a quick flip out of it.
So, that is the story of how I benefited from someone else’s seller front-running. Hope you all enjoyed it.
Thanks for reading, I truly appreciate it!
Be back with more soon…
P.S. Just because I benefited from someone else’s seller front-running please DON’T go out and start doing it thinking you’ll be helping others. Seller front-running is a detriment to the domain industry and it needs to be eliminated, not increased. Just felt like I should throw that out there…