Domain name marketplace is trying to improve the process of buying and selling domain names.
If you aren’t happy with current domain name marketplaces, the simplest thing to do would be just to complain. On the other end of the spectrum, you could build your own competing domain name marketplace.
That’s exactly what the founders of Undeveloped.com decided to do.
Co-founder Reza Sardeha explained that he was unhappy with existing marketplaces and wanted to come at domain selling from a fresh perspective.
“From a seller perspective, we wanted to make domain trading easier,” he said. “We wanted a platform that was solely based on selling, rather than monetizing. We really didn’t see anything out there that would allow you to become a good seller.”
Once Undeveloped launched in 2014, the company realized it needed to put much more focus on domain buyers.
“If you want to build a very liquid marketplace, you should start including the buyer side,” said Reza. “Without buyers you can have the most amazing domains, but you won’t sell them.”
So Undeveloped worked to create a more transparent marketplace that would make buyers comfortable acquiring domains on the secondary market.
For example, buyers can see the seller’s name or company name on for-sale landers. The landers also include information about pricing and the process of acquiring the domain.
While listing your name on the sales page and setting fixed prices is optional, Undeveloped has data to back up the sales lift serllers get from adding these.
Additionally, since 70%-80% of negotiations don’t lead to an agreement on price, the company is creating content to educate buyers about the value of domain names.
Reza said the company also examined why people failed to submit offers on domains in the first place. Its original landers asked for an offer upfront. This was a major deterrent to buyers.
To get buyers to show up to the marketplace, Undeveloped researched where businesses go when they need a company or product name.
Since many of these users search for the name they’re interested in, Undeveloped focused on SEO for its for sale landers. As a result, a quarter of all leads customers receive are the result of someone finding their “for sale” page through a search engine.
The landers also have a title tag noting the domain is for sale, as opposed to parked pages that promote the topic instead.
In the future, sellers will have the option of including custom content, stats, payment options, etc. on the landing page.
Undeveloped is also innovating on the escrow side. For some ccTLDs such as .nl, it can instantly transfer domains to its own registrar upon receipt of payment. This allows it to pay out sellers quickly.
While Undeveloped is still much smaller than established marketplaces like Sedo and Afternic, it continues to find ways to differentiate itself. It boasts 21 million names for sale, but the majority of these are not directly listed with the service. The company crawled for unused domains and then included them in its database. When a customer inquires about one of these domains, the company reaches out to the owner to engage them. 80% of the time, they can bring the domain owner to the table.
Like most of its competitors, Undeveloped charges a 15% commission on sales, including escrow fees.
The company raised a $350,000 seed round about seven months ago and currently employees 17 full-time equivalents.
Creating a marketplace is hard. It’s a chicken and egg problem. But Undeveloped seems to be taking some innovative approaches and is a company to watch.
17 FTEs = Burn Rate > Seed Round funding
Not to mention the fact that they won’t have nearly enough liquidity to be able to cover and failed escrow deals … and thus unlikely to afford any real audit or financial oversight. Buyer beware. Imho
Reza Sardeha says
Actually, we use a third party provider with banking licenses in all corners of the world to hold the payment from the buyer. Once we’ve made sure the domain has been transferred they automatically pay you (the seller) out. Funds never hit our account.
Not what your site says. Multiple times you refer to “you being paid” and your verification process is poor at best (based on this reading). Buyers have huge risk of being scammed. Banking licenses don’t mean anything about escrow and auditing. I could use paypal and almost make the same claims.
From your site:
The buyer receives the invoice as soon as you come to an agreement with him. The buyer has seven(7) days to pay the invoice before we send him a payment reminder. During this time it is important for you to paste the authorization code (token) into the negotiation window. We will directly send the buyer the authorization code as soon as we receive the payment. After this, we check if the buyer changed the ownership of the domain name. Once this is done we pay out the seller.
Reza Sardeha says
What’s your real name? Anyone can make baseless claims behind a pseudonym. Did you ever use our marketplace or escrow service before? I don’t think so. If you had you knew that all transactions are guaranteed by Undeveloped and simply because we control the entire escrow process there’s zero room for error. We’re around for over 2 years and there’s not a single bad review or what so ever about us.
Next to that if you had read the article you’d also read that we keep sold domains safe in one of our own registrars so we verify first hand if the seller owns a specific domain put for sale or not. When a domain is registered with a registrar that offers a domain push we first secure the name in our account before giving the buyer access to the name.
At Undeveloped we have next to the fastest also the most secure escrow procedure that both buyers and sellers can use simply because we always first secure the name in our own registrar or account and then help the buyer transfer the domain.
Andrew, if you ask around I believe you will find that the following “innovative” aspects of this marketplace has pissed off a lot of domainers who’ve discovered their domains listed without their permission:
“It boasts 21 million names for sale, but the majority of these are not directly listed with the service. The company crawled for unused domains and then included them in its database.”
I welcome new ideas and options for the resale of domains, but the way Undeveloped has compiled their ‘inventory’ is just asking for trouble. When they or an unsuspecting registrant gets hit with their first UDRP, the sh*t will really hit the fan.
Reza Sardeha says
Domains that are Unused have a different “internal product page” than domains that are actively put for sale. On those pages we make it very clear that the domain is registered but unused and that we potentially can help the buyer connect with the seller. We don’t put up for sales signs that could get anyone in trouble.
Next to that in the past two years we haven’t had even one seller that requested us to remove his domains.
All we do is try to attract as many as end-users as possible to our marketplace and then connect them with the right name. When we send you an email with an offer from a potential buyer, what’s the harm in that?
They can list whatever they want, it’s make an offer service.
“As a result, a quarter of all leads customers receive are the result of someone finding their “for sale” page through a search engine.”
Good, because their marketplace search feature is about as horrible as Flippa’s.
Also, why is their marketplace 2 levels deep? Top names should be featured on their homepage.
Andrew Allemann says
I remember Afternic used to have a free service in which you could make an offer on an unlisted domain. They shut it down because people were “abusing” it with low offers.
This is, of course, different, since Undeveloped lists the domains for sale. I think it comes down to how the listing page describes it. I know that GoDaddy’s “This domain may be for sale” on landing pages was used many times in UDRPs, even though the domain owner had nothing to do with it.
My baseless claim is a direct quote from your website.
Whether I’ve used your service?
No. And I won’t based on what you have documented ON your site versus what you claim in comments on a blog.
With all due respect, rather than calling me out for making accusations you should spend time cleaning up the terms and conditions of your site.
Reza Sardeha says
All comments and claims are in-sync with our TOS. The only difference here is that we have a different escrow procedure per transaction. Simply because the rules and regulations differ per extension that we offer escrow in.
I think we’re just having a miscommunication here. Honestly, I’d still love to have you on board. If you change your mind you know where to find us.
Thanks. I’ll chalk it up to misunderstanding.
Good luck 🙂
Robert McLean says
never received one offer or even an expression of interested on Undeveloped
AND I WAS INVITED TO PLACE MY NAMES ON THEIR SITE .
Reza Sardeha says
I’m sorry to hear you’re disappointed with our service. However, let me ask you this:
Did you park your names with us? If not, you shouldn’t expect 10 sales a week since you in that case won’t use of the added value that we can bring to the table.
If you share more details of your account with us we can also help you with identifying why you haven’t sold anything. There are many variables like pricing, account setup and so on that can block you from selling.