Domain Name Negotiation
Deciding to buy or sell a domain name is a process. Many sellers provide a price tag as a general expectation of what they aim to receive for a domain. A “Buy It Now” (BIN) is a firm price like you might find shopping in a retail store. BIN prices make the purchasing process fairly quick & easy as negotiation is typically subtracted out of the process.
Alternatively, some sellers may adopt a pure negotiation format in which they don’t commit to an up front domain sale price. If a serious buyer interest is expressed, then the seller may quote a general range they are looking to sell in. The buyer may then reciprocate with an offer as a starting point for negotiation.
Sellers of premium domains usually prefer to keep their options open, and are commited to not underselling a potentially high dollar internet property. Domain values vary with economic cycles and industry trends, and may go through periods of rapid appreciation depending on many market variables. For this reason, commiting to a finite price in time doesn’t serve the seller’s long-term interest. There are many examples of domain names which were thought to be over-valued. And to the surprise of many, the domain name was sold at a premium to the right end-user buyer. Why? Because the domain was of very high quality and had few, if any, comparable alternatives.
Domain name price setting and negotiation style are a frequent subject of debate within domainer circles. It is accurate to say there is no single correct way to work through a negotiation. Premium domains will have an automatic, intrinsic worth of which both buyer and seller are aware. Sometimes the buyer’s need for the premium domain is not sufficient to meet the seller’s asking price. The buyer will either walk away for a cheaper alternative, or suspend negotiations such that both parties can think it over. So, an impasse in a domain negotiation may not be a dead deal, but a temporary “time out” which allows both parties to reassess their positions. Further negotiation may occur at a later date. This is always a good leave-the-door-open policy.
For this reason, it is important to keep emotion out of the negotiations. Patience, professionalism, and good diplomacy are excellent tools for keeping a negotiation alive. “Tactics” often backfire, and work only on naive or uneducated buyers/sellers. As a buyer and seller of domain names, I have dealt with a variety of personality types and negotiation styles. Listed below are several automatic buyer dont’s that will not only kill a deal, but may ruin any chance of future negotiations.
- Don’t make an initial low ball offer, and then aggressively debate the seller in an attempt to lower the seller’s price expectation. In most cases, you will be immediately perceived as a cheapskate and/or time waster. To establish yourself as a credible buyer, you should acknowledge the seller’s property has significant worth. Why else would you be calling if you didn’t want the domain in the first place? A lowball offer says “I want this, but I hope you are stupid enough to give it away cheap”.
- Don’t make an offer you aren’t prepared to fulfill. The seller may accept your offer, but you will lose all good will when you start tip-toe’ing around the fact you don’t have the funds to close the deal.
- Don’t make unreasonable demands or complicate the deal unnecessarily. Simplicity and clarity are always better for the deal. Prune expectations and steps down to as few as possible. That way the deal is about the domain … and the price, and not much else. Terms and conditions will certainly be a subject of discussion. But those can be specified (negotiated) in the purchase agreement and worked through amicably once an agreed upon sale price is reached.
- Do listen, and approach the discussion with an open mind. The seller has his/her unique perspective (and reasoning) for being in a particular price range. Very often, buyers have not considered all of the important elements in a domain valuation. After reflecting on a seller’s perspective and input, a buyer may come to understand new things about the domain property that justify the premium pricing. Failure to listen will break down the communication.
- Do look for common ground. You, as buyer, obviously have something in common with the seller. The domain in question appealed to you both … due to the meaning contained in the words that comprise the domain. Yes, negotiations can be touchy and tenuous. But, they can be worked through to a successful conclusion. Both buyer and seller understand that the domain presents some benefit that is either already established, or that may be (as of yet) an unrealized potential.
- Do make an attention-getting initial offer. Owners of premium domains didn’t acquire them by accident. Most domainers that I know are well-educated, shrewd, and financially comfortable. They may not need to part with their premium property. Coming in low says absolutely nothing. Coming in with a substantial offer sets the proper tone and atmosphere for doing business.
Good luck, and have a great day!