How To Negotiate The Best Price.

[nam2000]

I thought this would be an interesting thread for everyone as well as newbies.

Lets say an end user contacts you (via whois or whatever) re one of your domains, now OK, we all have an idea of what a domain is worth, but a domain is worth what you can get for it.

I'm sure most of us do some checking and try find out if its a individual with a limited budget or a big corporate with pots of money.

But lets say all that turns up blank, so lets say the offer on the table you would be prepared to accept, but you obviously want the best price.

How do you proceed in order to get their best offer?

 

[Biggie]

I thought this would be an interesting thread for everyone as well as newbies.

Lets say an end user contacts you (via whois or whatever) re one of your domains, now OK, we all have an idea of what a domain is worth, but a domain is worth what you can get for it.

I'm sure most of us do some checking and try find out if its a individual with a limited budget or a big corporate with pots of money.

But lets say all that turns up blank, so lets say the offer on the table you would be prepared to accept, but you obviously want the best price.

How do you proceed in order to get their best offer?

i got slight problem with this

"but a domain is worth what you can get for it."

a domain's worth has to be calculated based on criteria first and you have to stand firm on what you want for it.

if you don't, then you'll always sell for less.

i don't consider what a buyer can pay, i only consider what i want for it

typically i will ask for offers, if they don't submit one....then i move on

if they do, then i decide to either accept it or counter it with higher price.

a lot of times, you'll get inquiries like:

"what's your BIN on these or what's a ballpark range"

mostly my reply is "what's your best offer" or i'll say "we don't give out pricing without receiving offers first"

this will let you know whether the other party is serious or not and may give you an idea of their budget.

sure you can go the next level and try to investigate "what's in their wallet" but imo...that's not my business


my business is to show confidence, thru explaination (should i have to) of why the domain is worth the asking price.

imo...

 

[theinvestor]

There is no set way to negotiate with an end user.

At the end of the day you need to have a price in mind and you have to be able to hold out for that price.

 

[JuniperPark]

If you don't know your asking price for a domain, you should be in the business of selling domains. When a seller gives me the "make an offer BS", I go elsewhere and they lose a sale. They are just time-wasters.

 

[H2FC]

There are many difference opinions on how to price a domain and I suspect most of them are right to some degree.

The logic behind many pricing opinions has to do with 3 main factors imo. One is the needs and current financial condition of the owner/seller; second is the quality of the name itself and third is the experience or lack thereof the seller has in evaluating the fair asking price.

If the seller is an experienced domainer who follows domain values based on selling prices and his financial position is good and stable the quality of the name should be the only basis for setting the price.

What makes this business so interesting is that many (I started to say most but I'm not so sure about that) domain sellers do not fit the above description. Many domainers have no idea at all of the current actual value (or lack of value) of their names. I do believe that MOST of the new inexperienced domainers have a misconception of over value.

But there are a few who grossly underestimate the value of a domain name and they are the ones many of the experienced domainers are looking for.

For some domainers their main business is to buy low and sell high. To others the goal is to hand register good domains and sell for a profit. I fall within the latter group, I very seldom buy preregistered domains low and sell them high although I have done it in the past and I will do it again if the opportunity presents itself but I don't spend much time looking for these buys.

I know none of this answers the question of How To Negotiate The Best Price, but I think the answer depends on so many different aspects of the business its impossible to be specific.

I would suggest the best method is through experience in domain values. I follow every domain sale I can find and compare sales prices. This usually helps one form a sense of domain values but in some cases it too can be misleading.

In those cases I'm convinced the true value has little to do with the actual selling price and more to do with the particular buyer's value of it. I've seen domains sell for hundreds of dollars that I wouldn't have paid a renewal fee for.

 

[INFORG]

As a seller, you need to have two figures in mind when you obtain a name for resale:
1. Your target price
2. What you could live with selling it for

If you don't know these two numbers, you shouldn't be doing this.

I think it is OK to try and get them to throw out an offer, but it is almost always going to be below #2 above.
You should come back with #1 plus 50%
Hopefully they now come back with something above #2
You respond with a number near #1
and you try to close a deal.

Getting the other guy to make an offer needs to be a little slicker than what many domainers do. I develop a lot of sites and have future plans for each of my domains, so when I get a cold inquiry, I reply along the lines of:

"I really liked this name when I purchased it, and have been anxious to get around to developing it. I was planning on doing a [type of site] similar to [some of my other sites].

I've got a real big backlog of projects right now though, so I'd consider letting it go to somebody that wanted to buy it. I'm not one of these guys that thinks every domain name is worth a million dollars, so just shoot me your best offer on it."

I admit that I will do some research on the buyer if I can, but it rarely changes my valuation of the name - it might make me stick closer to #1 though and raise #2 up a bit.

As a buyer, if you make me throw out an offer with some crappy response, it will almost always be a minimal amount, just cause I'm annoyed like that. When you come back with the $25,000 price tag for a two word .ws - I'm just not gonna talk to you anymore.

I don't like sellers that are just trying to find a couple chumps a year to overpay five figures for a hand reg. When a seller comes down from these huge amounts to even a reasonable amount like XXX, the buyer asks himself "do I really want to buy from someone that was gonna shaft me that hard?"

If you went to your car repair guy (and I've had this happen) and he came down over 75% from the original repair price he quoted - you'd never go back to that guy cause you know he rips people off every day.

 

[Domainx09]

For getting the best price - begin with the make an offer BS, leave buyer waiting anxiously for days before responding to the first inquiry, counter high and either accept or reject the second offer in most cases unless buyer seems extremely enthusiastic. Unless there is a very similar sale recorded i have no asking price.

Buyer and seller always both want the best price and anyone serious about buying your name always has an idea of what they want to pay for it. Having asking prices will generate a lot more sales but you never know what the name might have been worth to the buyer.

Always have some good reasons to explain your asking price or counter offers - related sales, development ideas, any impressive traffic/stats, number of google searches per month (google keyword tool).

 

[LeeSeats]

The primary reason I got started seriously in domaining was when I sold a
basically worthless domain for $3,000 to someone who had a specific use
for the domain.

Out of the blue I got an email message asking if I wanted to sell the
domain. I almost deleted it because I figured it was one of the many
domain offer scam emails I had seen before.

Fortunately, I replied and asked them to make an offer. They offered
$1,000 and I knew they were either serious or a scam. I researched the
potential buyer and found out they were a very large European telco with
very deep pockets.

I told them I did have plans for the domain, but if they were willing to offer
$3,000 they had a deal. They replied within a day and we did the deal
through Escrow.com

I wondered if I could have gotten much more for the domain, but there is
no way to know that, so I am very happy with the profit made on the deal
considering I paid $5 plus registration in the Godaddy clearance bin.

I know that is not going to happen very often, but it really gave me the
domaining bug in a big way.

 

[Biggie]

The primary reason I got started seriously in domaining was when I sold a
basically worthless domain for $3,000 to someone who had a specific use
for the domain.

Out of the blue I got an email message asking if I wanted to sell the
domain. I almost deleted it because I figured it was one of the many
domain offer scam emails I had seen before.

Fortunately, I replied and asked them to make an offer. They offered
$1,000 and I knew they were either serious or a scam. I researched the
potential buyer and found out they were a very large European telco with
very deep pockets.

I told them I did have plans for the domain, but if they were willing to offer
$3,000 they had a deal. They replied within a day and we did the deal
through Escrow.com

I wondered if I could have gotten much more for the domain, but there is
no way to know that, so I am very happy with the profit made on the deal
considering I paid $5 plus registration in the Godaddy clearance bin.

I know that is not going to happen very often, but it really gave me the
domaining bug in a big way.

Hi

that's good story


sometimes you'l never know if you could have gotten more, but be glad you didn't sell for less.

one thing i read from your message is that you considered the domain as "basically worthless".

when in fact, there was somebody who had a need/desire for it and was willing to pay a premium to get it.



that in a nutshell is perception, and how it plays a part in domaining.

good luck

imo...

 

[axeman]

I would agree with Lee, and his basic common sense approach. If people are going to play "multiple mind games" either on the buy or sell side, im outa there.

 

[chillking]

Best advice investigate the buyer and if its a large company then remember 5k is nothing to them so hit them with what you think they will pay. A large company once offerd me $50 i said $35,000 then we negotiated for 1 week and they ended up paying $7,000 that i was very happy with.

 

[John Baron]

I would agree with Lee, and his basic common sense approach. If people are going to play "multiple mind games" either on the buy or sell side, im outa there.

yep , i agree with Lee also , i stop playing those mind games , just dont have the energy for it