Domain Name Negotiation: Who Goes First?

Apr 02 2012

It’s a conversation I’ve had with other domain investors quite often.  What’s the best approach to negotiating a domain sale?  One thing that many of us seem to agree on, the person that puts out the price first is at a disadvantage.

It’s an odd situation. It’s probably one of the few things in the world that when a person wants to buy something from you and you don’t give them a price.  If any other business used this approach they wouldn’t stay in business very long.  So why wouldn’t you want to give a price when asked?

My reasoning is simple and one you’ve probably heard similar statements for 15 years.  Every domain is unique and the value is only what someone is willing to pay for it.  Sure, you can do metrics, search volume, type ins, costs of ads, but that only gives you MINIMUM value.  If a person wants or needs the domain you can throw that out the window.  So why would you want to limit yourself out of the gate?  Some would call it showing your hand but I prefer to “gauge interest” from my buyer before I show my willingness to sell the domain.

Domain Name Sales platform is set up using this method. The series of events is a user sending an email showing interest.  You then send them an email with a “thank you for the inquiry” seeking an offer.  After the offer you then counter with the price you are seeking.  That offer gives you a feel of the seriousness of the offer.  While a few $500 offers have turned to mid $X,XXX deals, more often than not, a super low offer leads to a no sale.

While we all know that there is no “magic bullet” when it comes to sales negotiation, there are certainly better approaches than others.  If you have a method that is working for you than by all means keep it up and even better, share it.  The “let them go first, unmotivated seller” approach seems to be doing the trick.  Of course, having a good domain will trump any of the above thoughts.

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Outsmarting the Dumb, Outworking the Smart

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3 comments

  1. Jake

    In my opinion, whoever begins negotiations should be the first to mention a price. If you pitch a domain name to a company you should be prepared to tell them a price when the time comes. However, if someone contacts you about a domain name, they should be prepared to make an offer to you.

  2. Luke Summers

    I agree with Jake’s comment. If you initiate the contact then you should be prepared to give a price.

    Even when I get an email specifically asking for a price on a domain, my response is something along the lines of ‘make me an offer’.

    An instance where this doesn’t apply is when you have a very high quality domain and a number of qualified buyers. Even if you initiate contact the competing demand from the buyers should be leveraged to set the price (sometimes known as a bidding war!). This situation is extremely rare and I think we would all love to be an asset owner in that position.

  3. Anonymously Anonymous

    Since the mid-90s, I’ve developed my domain names, so when someone comes along and asks if I’d like to sell a website, I usually reply with no, but if I did, it would have a #-figure price tag. This gets rid of the people who will waste your time very quickly, but may get those who are serious and have the money to negotiate with you.

    Early on I found that asking someone to make an offer usually resulted in one that was ridiculously low. (Even if they have the means to pay a lot more.) So it’s better just to quickly scare off the people who couldn’t pay anywhere near what you’d honestly want for a domain or website, in the first place. There’s no need to get your hopes up, if someone is just going to waste your time. (And most of them will.)

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