Buying premium domain names for a particular business purpose involves at least two parties, a number of decisions, and a sequence of events.
Party number 1 – the Seller: First, there is the registrant/owner, or seller, of the domain name in question. He or she, at some earlier point in time, acquired the domain name most likely because it represented a good value or prudent investment opportunity.
This registrant/owner might be a group, an individual, or a company. Whatever the initial rationale for acquiring the domain, he or she did so with a longer range vision in mind … be it to develop the domain name into a revenue generating website, to lease it, to park it, or to resell it for a profit later on.
This registrant owner has already performed their own internal valuation of the domain name and typically has a “for sale” range in mind. The bottom of that range is the lowest price the owner would ever take. The top of that range is the best case scenario in which the domain name is simply perfect for a particular end user’s purpose and will command a premium price. Then there is the middle range which represents to the seller an acceptable profit, but perhaps lower than their best case scenario.
Party number 2 – the Buyer: Second in the buy a domain name formula is the buyer. The potential buyer is someone who has taken notice of the domain for sale and identified it as valuable for some purpose of their own. They too have a specific value assessment formula through which the domain name has been passed.
The buyer operates with a similar “price structure” in mind which represents the least amount he believes he could reasonably pay to acquire the domain, the highest price he would pay to obtain it, and then a general middle ground price that would represent a “good buy” or “fair deal”.
Potential Party number 3 – the Broker: Sometimes working in between the seller and buyer is a domain name broker. This person may actually represent either the buyer or the seller, or be positioned more as a neutral facilitator like you might find in an online brokerage like Sedo. The broker may be highly involved in the domain negotiation, or alternatively, have little to do with actual negotiations and merely oversee the transfer of funds and domain name ownership.
An active broker who has been shopping a domain on a commission arrangement will have a vested interest in the domain name property. So much so that the broker’s opinions and expectations may come into play as a third influence behind that of the buyer and seller.
Buying domain names is more art than science, and is dependent on the mix of many variables that exist between the seller and buyer. The more specific and well-defined the buyer’s need, the more easily he will be able to narrow down his domain name choices to a select few that meet his criteria and expectations.
If the seller has seriously considered their own price range comfort, then he or she will be better able to communicate with a potential buyer on the feasibility of negotiating a mutually acceptable price .