Originally posted by Duke
I'm sorry I can't agree with this at all. You are the professional domain name seller. If you don't know what the domain is worth you deserve to be taken for a ride! Why should someone pay more than market value for something just because they have more money than someone else? Again, this is thinking that seems to be reserved only for the domain business. A Chevrolet dealer doesn't say "Hey that guy is a millionaire - let's change the price on this Chevolet from $15,000 to $50,000"!
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As much as it pains me to do this, I must disagree with you, Duke. Selling domains is not like selling Chevrolets. If you will recall your microeconomic theory, there are two influences to price equilibrium -- supply and demand. While it is true that there is an immense supply of domains out there, each domain is unique, so there is only ONE of each domain (two people cannot have yahoo.com). That means that the SOLE determinant of price is demand.
When someone DEMANDS a domain ("I GOTTA have this domain") this causes the price to go up, regardless of what the seller thinks its "value" is. In the case of a millionaire, this doesn't mean you can bilk them for more money for that reason alone, but it means that there is more room for negotiation because there is either a) more demand due to their potential for business opportunity or b) less resistance to price fluctuation ("deep pocket" syndrome).
Unlike your premise that this is a third-world bartering technique, discrimentory pricing is used throughout our industry. Contracts for goods and service throughout our country are always priced not only on the inherent cost of production (+ profit margin), but also on what the "market will bear", or the demand in the marketplace. Simply put, "how deep are the pockets of the buyers". This type of flexible pricing is done on a per-client basis. Why should domain sales be any different?
I will agree with you that many people ask too much for their domains, knowing your buyer is a legitimate (and completely acceptable) method of determining demand, and therefore setting the price accordingly.
Anecdote: My previous company owned the domain name "gofamily.com". A broker approached us to purchase it in 1998. We sold for a nice 4-digit profit. Later found out that the broker represented Disney (a la Go.com, Family.com, family.go.com). We would have charged much more had we known this. This is obviously the reason Disney went through a broker, rather than revealing their identity. If client-appropriate pricing was not industry standard behavior, they would have had no reason to go through their broker. They understand that this is part-and-parcel to the process, and play the game accordingly.
Namebio $268,499 in Sales on September 20th - ToastOnMarket.com Sold for $13,250...