DomainTools Blog

New Option Designed to ‘Stimulate’ Industry

At Aftermarket.com and at Domain Consultant, the primary considerations in creating a successful auction always include the state of the industry, the state of the individual domainer and the buyer. Having immersed ourselves in the domain industry for many years, our teams understand what makes buying and selling successful and recognize the need for constant innovation in this process.

That being said, when it came time to discuss the upcoming Aftermarket.com live auction at Domainer Mardi Gras, taking place February 21st, 2009, our teams focus centered on the current needs of the buyer and the seller. We determined that current buyer and seller issues involve cash, which is at a premium, and cash flow, which is currently in a tenuous and trending downward. -

As a result, Aftermarket.com is excited to now offer six month zero percent financing for all Aftermarket.com domain purchases greater than $5,000. Financing has historically been offered by other industries, as evidenced in ads throughout all media channels, and is designed to give the buyer increased payment flexibility, a necessity for maintaining and managing cash flow.

Aftermarket.com buyers will have the option to pay for their purchase in full, or set up a six month payment plan. Default on payment terms will results in the name going back to seller with the seller keeping payments up to that date as well. Successful domainers have used owner financing for many years to expand buying capabilities, diversify risk and gather great names beyond their general means and standard avenues. For the domain seller, benefits of owner financing include increased spending budgets and added bids and bidders. For example, a domainer with a $3000 budget may increase it to $5000 if financing is an option. These are among the many reasons we have decided to offer this option to our valued clients

Sellers will of course maintain the right to remove their domain from the financing program. It should be noted; however, that we review and rank all domain names based on value and – financing is a variant in that formula, with added weight in times of economic distress.

Financing is not only a vehicle for the buyer, but also a benefit for the seller. This is promoted extensively throughout mainstream media for many industries- they are not just helping buyers, they are clearly helping themselves.

Formerly, owner financing has proven successful, especially when motivated buyers and sellers coincide in a time when large investments are unpredictable in return.

We sincerely hope zero percent financing option expands investment opportunities for buyers and sellers in these difficult economic times.

Here are some of the financing variants, in greater detail:

• Financing term: 6 months
• 30% down payment required
• $5000 minimum domain value available for financing
• Funds are put escrow as payments received and disbursed to seller
• Domain(s) DNS changes to buyer during financing term (this allows buyer to earn income, but control of domain ownership remains with Aftermarket.com/Thought Convergence)
• Buyer defaults – seller receives payments made to date (minus handling fees) and the domain returned
• All payments are non-refundable

UPDATE:
The complete financing terms:

• 30% down payment due immediately
• 6 month payment term, paid in full at end
• Minimum monthly payments due
  • 1st month: 30% down payment
  • 2nd – 6th month: Balance / 5 monthly payments
• 0% financing for the 6 months
• Payment NON-Refundable
• No pre-payment penalty
• Domain is transferred to Aftermarket.com/TCI
• DNS is pointed to Buyer’s account to collect revenue
• Funds are disbursed to Seller as received, minus the commission transaction fee
• End of Financing:
  • Domain is fully transferred to Buyer
  • Final payment is made to Seller

An example of successful transaction:

$10,000 domain sale
$3,000 down payment due immediately
$7,000 balance due within 6 months,
(= $1400 minimum payment months 2 – 6)

Paid in full:

• Domain transfers to Buyer
• Seller received all payments as made by buyer, minus transaction
• Transaction is complete

An example of Default Transaction:

$10,000 domain sale
$3,000 down payment due immediately
$7,000 balance due within 6 months,
(= $1400 minimum payment months 2 – 6)

Month 4, Buyer defaults:

$3,000 down payment due immediately
$4,200 – 3 monthly x $1400
$2800 – defaulted, no payout to Seller on the remaining balance

Default transaction:

• Domain returns to Seller
• Seller received all payments to date, minus commission transaction
• Transaction is complete