Negotiating domain name prices is somewhat similar to how consumers would negotiate with vendors in a street market. Both parties are out to get the best deals they can get. The buyer will want to negotiate the cheapest possible price, while the seller is gunning to convince the former to agree on the highest price he/she can afford. It’s a battle of the wills, and certainly a showdown of charm and clout.
The following are some steps and strategies that may help domainers secure very good prices for the domains they are selling.
1. Appraise the Value of Your Domain Name
There are many factors that determine the monetary value of a domain name: its Google rating, traffic, compatibility with a buyer’s needs, marketing/commercialization potential, et cetera. For example, the most expensive domain name sold in 2010 was Sex.com. It’s not a business name, but it is (1) a very widely-used keyword with (2) a high demand among retailers, merchants, and entrepreneurs, plus (3) a high search rate across search engines.
An exact-match domain name is a dream for any online merchant or business that hopes to build an online market. It is customary for businesses to make websites named after their own name. So, if you own a domain that’s an exact-match for the business name of a buyer, you may negotiate for a higher price for it because the need is greater.
2. Sell Through a Domain Selling Website or Broker
There are many domain brokers that can help sellers sell their domains at an advantageous price. The advantage here is that domain brokers like Sedo that will do its best to secure high prices because they have a vested interest in each sale (by virtue of commissions).
Another advantage in partnering with brokers is they will help domainers monetize from direct navigational traffic (traffic a website receives when users type in the exact website URL in the browser’s address bar), like Lawrence Ng’s Oversee.net. It’s going to be a double win for domainers. While the domain name is still parked, you can already start earning a little out of it. At the same time, you are building up its Google rating, thereby increasing its appraisal value when a buyer eventually comes along.
3. Consider First Offers as Lowball Offers
When a buyer is interested in a domain name, he will likely the seller what his budget is for the purchase. Most often than not though, this supposed budget is actually a lowball offer—a price that’s way lower than what the customer can actually afford and is willing to spend. Negotiate a higher selling price then and enlist the reasons why the domain merits it.
Agreeing to a lowball price is a mistake that many sellers make with domain names that have been parked for quite some time and are still unused. It sends the message that you have no use for the domain, and that you’d probably be glad to get it off your hands. It would come out as a favor, and whether this is true or not, reject the lowball offer if you know that the value of the domain is worth a higher price.
4. Don’t Waste Time in Hopeless Negotiations
Part of negotiating is knowing when discussions will get you nowhere. You need to choose wisely which buyers to entertain and which ones to reject. For instance, if you have a buyer whose lowball price is closer to the price you are expecting to sell the domain for, negotiating with him or her will not be a waste of time. If your selling price is $12,000 and the buyer contacts you with the intent of buying it at only $1,000, then further discussions will be pointless.
A very wide price gap is just one sign that you’re wasting time with a buyer. Others will manifest itself (ex: endless bargaining, arguing) and you’ll recognize them when they arise. Be wise in choosing which buyers’ bids to entertain so that you can end up with a very profitable sale.
5. Find Out Who Your Buyer Is
Discovering the identity of your buyer or the company he or she represents will give you plenty of leverage in the negotiations stage. This is going to be hard work because buyers today are being smart; they use safe email addresses, use only their first names, and refuse to divulge too much about their backgrounds to sellers. The point is to prevent sellers from finding out what their spending capacity actually is.
For instance, if you know the buyer represents a successful manufacturing company, you will want to sell your domain for a much higher price than what you’d sell to an individual buyer. Be careful when researching though so that your prospective buyers won’t feel that you’re invading their privacy, and be tactful in building your case for charging a higher price so that they won’t feel as though you’re out to milk them of their money. It’s always better to be on civil terms by the time you seal a deal.
There are so many articles published on the Internet advising buyers how to negotiate for domain name prices. It may also be to your benefit if you also check out those articles yourself. Putting yourself in the shoes of the buyers will give you insight on how they will approach you during negotiations, enabling you to anticipate their moves and thereby make clever moves of your own as well.