Company explains why the customer ended up paying a marketplace commission rather than for escrow.
Earlier this week Sedo announced that it handled a $100,000 transaction for Autism.rocks.
It’s a big price for a domain under a new top level domain name. Both the buyer and seller are involved with advocacy for people with autism.
It was made more interesting by the seller’s allegation that Sedo steered him to a full transaction at a 15% commission rather than just an escrow at 3%. You can read about the seller’s concerns here.
Sedo looked into the matter. Luckily for the company, it seems that the initial communications between the seller and Sedo were over the company’s chat tool. Here’s what Sedo says:
Thank you for giving us the opportunity to respond to the assumptions formulated by the seller of autism.rocks in our direction and about us not having provided the appropriate service and asking for too high service fees. Taking complaints seriously, we immediately analyzed the chat protocols showing the evidence about the communication between the seller and our Customer Care Specialist.
Here is what our records show: The seller told us via chat tool about an offer he received, and that he wanted to know how to list his domain for sale. He also asked what to do if he receives an offer and if he can counter an offer. These are typical questions from users that want to start listing names and sell them through our marketplace/ platform. The seller didn’t mention that he already had an agreement with a buyer in place and was only seeking for transfer service. If he had mentioned that, our Customer Care Specialist would have pointed him to our External Transfer Service.
We are in direct contact with the seller and together we are going to analyze the process on potential mistakes and how to proceed. You know that we are very transparent about our services and the fees that apply when using them. In addition, we have the largest collection of FAQ to answer all questions about a sale of a domain name. At the same time we know that misunderstandings can happen.
For your information: We are very happy to support registered charities and donate to respective organizations following our own criteria. Knowing that there are millions of charities registered in the world it is impossible to know and/ or support them all. Furthermore, if we are not informed and asked for support upfront for a proper case by case decision we cannot support the client in his desired way.
We very much hope that we were able to clarify a few things with the above explanation. Again, we are in contact with the seller and hope to sort out the situation.
This seems like a reasonable explanation.
Ray J says
Reasonable explanation, yes, but I don’t see Sedo stepping up and just taking the 3% transfer fee. Seems like a lot of trouble they went through to explain the situation, but the end result is the same. There isn’t anything they need to sort out. Sounds like they don’t want to give back the 12% difference. Seems like nothing has changed from the original article except that Sedo is trying to save face, but they don’t want to pay up or should I say give back.
Acro says
Why is Sedo trying to ‘save face’ ? The exchange was conducted as described, so there is no dispute about the seller’s rush to complete a sale and not perform cool-headed due diligence.
If Sedo were to return the difference as a gesture of corporate ‘kindness’ that would be exceptional, but definitely not a requirement at this point.
Ray J says
Because it’s clear the seller already had a deal in place and just needed Escrow. It doesn’t matter that Sedo is saying they just now realized that fact. They did not broker anything, so there is no reason for the 15% commission. That’s the whole point of Sedo is to broker the transaction, which they did not.
It would be different if that were the case, but that’s the whole point of the story. The seller had a deal in place and just needed a way to facilitate the deal. Too bad they didn’t know they could use Escrow.com without Sedo.
The fact still stands that Sedo took 15% for doing nothing but but being an escrow service. The fact that this was a charity just makes the matter more newsworthy.
This has nothing to do with being kind. They didn’t broker the deal. So why would they get 15%? Sedo knows this and even hints to this when they state: “Again, we are in contact with the seller and hope to sort out the situation.”
Bill P says
The 15% commission is not for brokering, it is for listing the domain in the Sedo marketplace.
Nobody forced the seller to list it there. He bears some responsibility in this.
It confounds me when people want to point a finger at companies instead of owning up to their decisions.
Acro says
A lot of hindsight 20/20 statements.
What if the seller had listed the domains on e.g. Flippa and launched a global campaign. What if the buyer filed a UDRP for a common law mark. Etc.
Sedo is being demonized unfairly at this time. Ultimately, the seller agreed to the terms and the buyer paid for the domain. It was a private agreement that completed via an escrow service.
I bet that no-one would cry ‘murder’ if this wasn’t about a pair of autism non-profits, but for example, a construction company and a rich buyer.
Ray J says
Sedo themselves that miscommunication happens and they are in talks with the customer. Seems like they did agree there was a misunderstanding.
Acro, it doesn’t really matter who the person or entity was, but it does help to shed light on it because they are a charity.
You are basically saying it’s ok for Sedo to take advantage of someone who already had a deal in place and just needed escrow, because they didn’t know how to proceed and what questions to ask. I don’t see that as something that a company should take advantage of. There aren’t a lot of what-ifs.
It’s simply the seller had a deal and there was miscommunication and misunderstanding between a rookie seller and Sedo. It’s good we are having these types of discussions and I did not see one thing in Sedo’s reply to state that the domain was listed on Sedo for weeks or months and there was back and forth negotiations. Unless they come out and say that, then I believe that the seller just needed escrow and wasn’t sure exactly what he needed to do at Sedo to get that done. No what-ifs, just what will Sedo do now.
Ray J says
It’s understood he was charged 15% for it being listed in the Sedo Marketplace, that’s not what the argument is about.
The issue is that he only needed escrow, which he was under the assumption he would get from Sedo. They both had a misunderstanding. It’s not as if he listed it at 100k and it sat there for months before being sold. He listed it at 100k and is sold very quickly from what the previous article read.
I’m a domainer, but even if I was part of Sedo the right thing to do is take the 3% escrow fee, which is all they did.
Like I said apparently he didn’t realize he could use Escrow.com.
It confounds me how this isn’t an obvious situation of Sedo taking advantage of someone who doesn’t understand what needed to be done to facilitate a domain transfer, when the seller already had a deal in place.
I have a feeling Sedo will do the right thing, but I am interested to see if they will.
beachwearnetwork says
I’m sorry but by virtue of the fact that the seller told Sedo he already had an offer should have pointed their team to at least let him know about the service at the lower price. Their assertion that this is a typical question of somebody interested in listing domains in general is laughable.
Sedo continues to demonstrate that they are not customer focused and ther inability to adjust their mentality when they were no longer the only game in town is the reason they continue to lose market share. There greed for short term profits will be there ultimate undoing.
Ray J says
Well said BWN.
Bill P says
@Ray J, @beachwearnetwork
If you guys will actually read Sedo’s statement, the seller “wanted to know how to list his domain for sale. He also asked what to do if he receives an offer and if he can counter an offer”.
That is not indicative of a transaction that just needs escrow and is ready to go. If he wants to use their platform to negotiate, he should pay for that privilege.
RayJ says
Bill, be reasonable. You are talking about one single employees interaction with the seller at Sedo. If I had a dollar for every time I had a different answer from a CSR, I’d be retired. Also, I do not see an official transcript. The seller and Sedo obviously disagree, so not sure why you are agreeing with Sedo.
It doesn’t matter what has happened. It matters what will happen. You might want to watch today’s DomainSherpa video, were the panel seems to side with the seller and thinks most domain marketplaces would fleece a seller of they had the chance. I’m all about free market capitalism, but not raking in fees that are unwarranted.
This isn’t about a technicality, it’s about Sedo stepping up and doing what is right. Sedo did not broker the sale. Simply because it was listed doesn’t mean they get to take 15%. Their system is setup to automatically take that percentage, and Sedo is in talks, so just wait this out and see what happens.
Andrew Allemann says
I’ll have to listen to the Sherpas video, but as one of the people in the recording, I believe the consensus was it looks bad but that we needed to hear Sedo’s side of the story first.
RayJ says
Andrew,
I totally agree, we will have to wait to see what Sedo does, but I’m glad you reported this, or else Sedo might have gotten away with this. This is the type of reporting that matters and makes people and Sedo realize they can’t fleece people and if they do, the community will know.
Bill P says
Given the information we have, I think I’m being very reasonable.
Sedo charges 15% for a “Sale originating on Sedo’s Domain Marketplace”. https://sedo.com/us/services/price-list-for-services
It doesn’t matter if it’s “brokered” or not. So, Yes, Sedo does get 15% “simply because it was listed”.
Fine print sucks and can bite you in the ass, but people gotta read it. Maybe the seller should “do what’s right” and not profit off of autism.
beachwearnetwork says
I’m not sure why you decide to leave out the front end of Sedo’s statement which is “Here is what our records show: The seller told us via chat tool about an offer he received”
In this case, the seller brought the buyer with him to Sedo, which should have at the very least prompted them to tell him about the significantly cheaper option which in my opinion was much more appropriate. Sedo should be happy to get 3% as they did nothing for this sale. I’m fine with paying Sedo 15% if they provide the platform that deliver eyeballs and eventually a bidder to my listing but they literally did nothing in this case. It is just bad business.
Joseph Peterson says
People are leaping to conclusions.
(A) Would Sedo deliberately steer a customer away from a 3% escrow transaction?
Certainly, Sedo makes more money from a 15% commission. So that’s a clear incentive, right? Nope. Think about it! They do offer a separate 3% escrow service. If Sedo’s goal is to charge 15% for mere escrow, then they’d steer all customers toward standard “for sale” listings; and there would be no simple escrow transactions happening to speak of. Indeed, why would Sedo offer a 3% escrow service AT ALL if their only aim were to circumvent it? That idea makes no sense, folks.
If Sedo did this, then they’d be doing it often. We would have heard about Sedo customer service representatives twisting arms long before this. Many DNW readers would have witnessed such behavior, and a scandal would have broken long ago.
(B) Why is Sedo’s perspective on events not worth listening to?
Do you all have access to some transcript of the conversation between the seller and Sedo that I don’t have? We DEFINITELY know that the seller was confused, since otherwise the transaction wouldn’t have taken place as it did. Sedo says that the seller asked about listing his domain for sale and making counteroffers. Assuming that to be true, it would take a very inept customer service representative to ignore the seller’s wishes and steer him instead toward escrow. If you asked about listing a domain for sale and fielding counteroffers yet some Sedo rep told you to set up a simple escrow transaction, you’d be annoyed at their incompetence. Right?
Most likely, the seller was confused enough that he asked the wrong questions and led Sedo’s customer service down the wrong alley. They were most likely only trying to be helpful. What do those employees care if the customer sets up an escrow transaction or a “for sale” listing? They have no agenda but to satisfy the customer (insofar as they can) and move on to the next case.
Furthermore, it’s quite possible that the seller hadn’t yet made up his mind whether to accept the initial offer or negotiate further. When he contacted Sedo, perhaps all options were still on the table. Most of us receiving a $100k initial offer would wonder how much higher a buyer might go; so that isn’t improbable. After the agreement was reached and the sale took place, the seller learned of the 3% alternative. But that doesn’t mean he asked for mere escrow initially.
(C) Should Sedo reimburse the 12% difference?
Most people seem to think so. And that’s for 2 reasons: (1) buyer and seller were both autism charities; and (2) the seller seems to have been confused and made either a mistake or a decision he regrets.
When customers screw up, as this seller did, it’s a useful gesture of good will on behalf of the company to charge the cheaper of 2 rates. However, that isn’t ethically obligatory; it’s just good PR. At this stage, Sedo has been so demonized that I’m not sure they can gain or salvage anything in the public arena by reimbursing the 12% commission difference. Had the accusations been less absolute, had bloggers given Sedo management time to assess the situation and respond, perhaps they’d have seen their way toward reimbursement. As things are, why bother? They’re damned if they do and damned if they don’t.
This much is clear. Lower level Sedo customer service representatives can’t be empowered to give away 80% of Sedo’s commission revenue. That would bankrupt the company, since every seller and his mother would take advantage of Sedo by claiming to have only listed domains with 3% escrow in mind. Some sort of supervisor must be brought in to evaluate the case. By the time this complaint was aired in public, perhaps the email hadn’t even been forwarded up the “chain of command” fully. It’s an unusual case and likely to fall between the cracks, since junior customer service reps typically handle best what follows the normal scripts.
When organizations are thrown a curve ball, we should be lenient in allowing them to deal with it. At least in the short term, we should suspend judgment.
If I were Sedo, I would reimburse the $12k on condition that the seller admit to some responsibility in the miscommunication and state for the record that Sedo did not knowingly steer him the wrong way.
RayJ says
Joseph, that’s a great summarization. I think it’s our job to bring light to these issues and comment on them be it in a positive or negative light.
I will say it seems obvious there was great confusion by the seller. I will also say that Sedo doesn’t do $100k sales regularly, so this sale should have been front and center of top management before the story got out about the commission.
I don’t think Sedo is being demonized, but they sure aren’t getting out and front of this and getting good PR.
In regards to what you said about Sedo’s CSRs and how they can’t give away the companies profits, I agree. The issue seems to be that nobody knows how often this occurs. As the individuals on Domain Sherpa said today, there are many people that wouldn’t know to ask for the word “escrow”. Should the CSR have asked the seller if he had a deal in place already? I guess it depends on the conversation as a whole, but just because a seller is unaware that a company has specific ways to lower the commission, that doesn’t mean the company should exploit that. You will always have issues like this across any industry, so while I don’t blame Sedo particularly, because I’m sure if a customer doesn’t ask for a discount or a cheaper way, why would a company tell them?
I can see Sedo easily saving face. They reimburse the $12k and explain that the customer automatically started the 15% commission and after looking at the transaction as a whole they can state they realize the seller only needed the escrow option. They could also donate an additional about to Autism, as it’s a tax write-off anyway.
Sedo obviously doesn’t want a run of people trying to claim they needed just escrow, but I’m sure there are checks in place to seek out people who try to scheme and defraud the system.