Sinking a hole-in-one is the aspiration of most premium domain name owners. Whether through successful site development or an eventual domain buyout, a substantial return-on-investment (ROI) is the minimum expectation.

There is a confluence of factors that feed into the dynamics of a “domain name for sale”. First is the individual’s motivation for selling. This can vary greatly from person to person and is often a private consideration that may or may not be disclosed to a potential buyer. Seller personality traits, personal financial situation, domaining experience, and portfolio size are also potentially relevant factors that play into the overall equation.

As a seller, your most important starting point is a proper valuation of the internet property you are considering selling. As is documented on this site, premium domain valuation can be somewhat complex. When an exact price/value cannot be comfortably defined, then a value range will suffice in the marketplace. Ultimately, to effect the sale, you as seller must arrive at a final price you can live with.

A true premium domain has the potential to reach very high plateaus of success depending on who acquires the domain and to what extent the property is developed and branded into a major asset. The question for most domainers is “Just how premium is my domain name?”.

From a personal point of view, I have seen domain owners both overvalue and undervalue their domain properties by a significant margin. Domain name forums are full of for sale postings that read “premium domain for sale”. When in reality, the domain is nowhere close to premium. Conversely, I have seen domainers sell their high quality domain asset well below it’s true value … which usually ends in seller’s remorse. Once a domain is gone, it’s gone.

In dealing with a prospective buyer, a seller is well-advised to consider that the buyer may not have much knowledge of the domain industry. Some general education and discussion may be necessary to help the buyer appreciate how the premium domain will create company recognition, attract customers, and act as a brand and business asset which will appreciate over time. The domain, if premium, will function as a top class portal (and business driver) that can elevate the buyer’s company above the competition.

If the buyer cannot envision the potential enhancement to their company, then they may back away or try to negotiate the price downward. You, as seller, may be faced with the option of agreeing to sell for less, or simply thanking the buyer for their interest and moving on.

Sometimes the buyer’s offer lands in the bottom of your price range. And to sell may make sense given your needs at that time. If the buyer’s offer is close (but too low), then creative thinking can sometimes move the deal forward. There are agreements in which the seller has accepted a less than stellar cash offer, but retained 5% ownership in the domain (including future gross earnings) for a period of 5 or 10 years. Such compromises require very clear contract language such that any ambiguity is removed, and both parties are crystal clear on any contingencies or recourse for problems should they arise.

Another option, if working with a motivated buyer, is to assist with financing of the domain purchase (either by referral, or by actually accepting a down payment yourself and working out a monthly payment schedule with a defined buyout date). Still yet, another avenue is to lease the domain to the buyer (via a tight contract) that allows optional buyout of the premium domain, or provides the leaser first right of refusal should you receive a great purchase offer during the lease period.

To close, premium domain investing is an investment vehicle with monetization options & numerous exit points along the path of ownership. Premium domain names sell themselves eventually as businesses look to maximize their opportunities via the incredible growth of the internet. The pool of potential buyers is often national (if not global), and far larger than the relatively small domain name investment community itself.

Consequently, sellers should not only examine their sales/development time horizon, but also consider the size of the potential market for the premium domain, and to what extent that pool of buyers are aware of the premium domain name and its likely benefit to their company. As with rare art (or any industry-specific business), you don’t just sell them to anyone. A good fit is required. Premium domains are sold to a custom clientele who appreciate their value, and who can appropriately utilize the asset.

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