Escrow.com completes $1 billion in transactions and will soon release a tool for brokers.
Escrow.com just hit a major milestone: $1 billion in completed transactions.
I reached out to Escrow.com president Brandon Abbey to understand the path the company took to reach this milestone and the makeup of its current business.
Abbey told me that Escrow.com started out with small transactions when it opened its doors in 1999. An actual example: 10 Garnet Ovals at $1.99 a piece. Escrow.com only pocketed $2.50 off that transaction.
Given that at least two Escrow.com employees must look at each transaction, that clearly wasn’t a scalable model. So when Abbey took over in 2004 he focused on upping the price tag on the typical transaction. In 2002 Escrow.com’s average transaction was $2,072; last year it was over $10,000.
Perhaps the biggest growth driver for the company has been domain names.
“We were able to secure the trust of many in the domain community and have provided a lot of focus on the industry ever since,” said Abbey.
Over 50% of the transactions completed at Escrow.com to date have been domain name deals. That percentage has been higher in the last few years.
Escrow.com is responding to market demand by adding services for more complex transactions. For example, it supports a lot of payment plan deals.
It’s also running a beta of a system that includes brokers in the process. For example, a broker may connect a domain buyer to a seller. The broker sets up the transaction at Escrow.com and indicates his commission. When the deal is finalized, Escrow.com sends the commission to the broker and the rest of the proceeds to the seller.
Andrew Rosener of Media Options has been testing the system. I emailed him yesterday to find out how the broker tool is working.
Over the last year or so I’ve been working with Escrow.com testing and refining their new Broker transaction product and it has become a critical element of my business ever since. Just in 2011 alone, we’ve completed 8 digits in transactions with Escrow.com using the broker product. By allowing me to set up transactions for third parties (buyer & seller) it makes my brokered transactions much smoother and allows me to use my time more efficiently. In the past I had to instruct either buyer or seller on how to setup the transaction and exactly how to set each of the terms; but now, I set up the transaction, both buyer and seller are notified to login & review, once they accept I can manage and drive the transaction from my own Escrow.com account instead of having to email my clients or an Escrow.com service rep to find out where the transaction stands. This process not only improves my work flow, but it also adds a layer of professionalism and trust when handling larger transactions. I was never comfortable before having to tell my clients to set up these transactions on their own and allowing them or forcing them to deal directly with the other party, oftentimes that is exactly why they hire a broker, because they don’t want to deal with the other party. Now I stay in between, manage the whole transaction from start to finish seamlessly & also am able to maintain total privacy for one or both clients when necessary. Today, I couldn’t imagine running Media Options without it.