A Response to “The Price is Too High”

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As a domain investor, I am accustomed to hear a prospective buyer tell me “the price is too high.” While they may actually be right about that, more often than not, I think they are stating that as a fact when it is more a matter of their opinion. Alternatively, they may have set a maximum budget in their head, and the asking price is beyond that.

I want to share a response that could be effective when dealing with someone who tells me the price of my domain name is too high: I simply ask them to share some examples of public domain name sales and prices that they believe are comparable to mine to prove that the price is too high.

Here’s why I believe this is effective. More often than not, the prospective buyer doesn’t really know anything about domain name valuations. They just don’t like the price or it’s above their budget. If they come back to me with some real comparable sales, I can reply with others that support my pricing. We can then try and bridge the gap.

More often than not though, the person doesn’t have any comparable sales to share. Their thoughts about my pricing are backed by nothing. When they reply about their intuition or feelings about the price, it opens the door for me to share some background information about the importance of domain name and offer some insight into the value they are getting with the right domain name.

When someone wants a domain name and does not have the budget for it, educating them may be a first step in closing a deal. Many times the person inquiring about a domain name is working on behalf of someone else. Perhaps they are someone more junior at a company or they need to convince someone else that the purchase makes sense. If I provide a good argument for why they should spend more on a domain name, that may be used to make a case for the decision maker.

I find it frustrating when someone makes an offer to buy a valuable domain name and it is clear they have not done a lick of research about domain name values beforehand. That said, perhaps a brief education about why a particular domain name is so valuable will help them come around on the price or can provide the basis for building a case for their company to acquire the domain name.

25 COMMENTS

  1. My response is this. Go f—- yourself. I can replace the buyer faster than the domain name. Buyers are a dime a dozen. Their needs, wants or wishes to Santa Clause don’t concern me one bit. This is bare knuckle mma brawl and the buyer should be slammed through the mat and concrete foundation below. If you have great domains they will come to you with no outbound whatsoever. These millionaire cheapskates will use spoof new emails to lowball emails acting downtrodden. When they say it’s a ridiculous price I say your right then quote double the price and say there I fixed it. When they offer low I counter With A Higher price. This is the new way of domaining. I hate the buyer ! He or she is a prick. Disgusting people imo.

  2. You are wasting your time “educating” the buyers…you think they know nothing when they have already scout who you are!! and know the value of domains.

    Just show me the money!!

    • Agree, the industry needs to forget this idea of “educating” people to pay what sellers think is the right price. Either they have the budget or they don’t.

  3. I refer them to DNJournal’s year to date past sales list and then like George (above), I offer lease to own options. Considering other advertising campaign costs, a great domain even in the millions can still be the better value in the long run. Never vent or write something hostile, there’s no benefit in that.

  4. “Comparable sales” is a dangerous game, a two edged sword, not just sometimes useless but sometimes also harmful, such as when a domain has been sold far below it’s real world worth and really is “comparable.” While yes, it MAY sometimes be useful, and yes Elliot’s advice here CAN sometimes have some valid applicability – on a case by case basis (domain by domain) – focusing on it primarily or as a priority is nonetheless looking at things not only too restrictively with a “residential real estate” way of looking at things, but precisely in terms of the point at which the “real estate” analogy for domain names is partially flawed to begin with despite overall being such a great and useful analogy.

    The first priority is and must be the potential value of the domain to and end user – NOT what supposedly comparable domains have sold for in the past. That requires being able to think like and end user and think in terms of end use. It not only includes commercial value – as in commercial, not residential “real estate” – but also non-monetary considerations depending on the domain and it’s best potential use. Then and only then it *may* be a good idea (or definitely *not*) to consider what “had been done” before in contemplating what *should be done* vis a via reasonable pricing (and don’t read into the world “reasonable” since real life could mean the sky’s the limit as to what “reasonable” means for a given domain). This is also “empathy” – not “sympathy” – but rather the ability to view the matter as an end user and NOT just as a “domainer.” To that end, it helps to actually be an end user to have some sense of what can really be done with specific domains instead of just looking at it in terms of attributes and past sales data a la residential real estate.”

    • And to emphasize the point about reading into words, true “empathy” in the sense I am referring to may really often mean a domain should priced at $1 million instead of $50k, for instance, not the other way around.

        • I cannot share that now for what I consider to be personal and business reasons. However, in terms of the present I have a few that are notable and famous, with a little bit of famous history too; one of them not as famous right now as it used to be, but definitely may “nuclear” explode in resurgent fame down the road. One of my past publicly known sales did appear high on the weekly list at DNJ before (and as I’ve said before, I don’t sell much), but I do not want to give a dollar range now. I’ve been mostly a buyer over the years quantitatively, and while I do like selling and would definitely like to do more of that, it’s second to “using” for me. Sometimes even a distant second. Would love to also experience some leasing via the Epik platform eventually.

          • Got it.

            Although I don’t share my sales #s, I do share many of the names I’ve sold (http://topnotchdomains.com/sales.html) and people can see that I buy good .com names on a regular basis (Leaves, Millions, Hasty, MYV, NLC, HappyEnding, Fairfax (sold)….etc).

            Point is, people can see I have a pretty good sense of the domain name market today. I think that is important when evaluating who is offering good advice based on today’s market.

          • I’m confident the wisdom of what I’ve said (and been saying for a while) about this topic can resonate with many above and beyond and regardless of the issue of relative anonymity, almost even axiomatically after some thought and especially among those with abundant user experience. For what it’s worth, I’m confident it also has already resonated with some of the more famous luminaries even though they may not wish to be seen endorsing something said by an anonymous commenter like me. Frankly, what I say even already substantially corresponds to what some of the them say to begin with as well. Perhaps this time my input can be thought of as amplifying or supplementing what you wrote. I’m definitely not throwing the baby out with the bath water re your post, which hopefully I indicated above, but I am most definitely trying to make things better for us all and make sure the real size of the pie is evident for us all.

            Sometimes my passion for the subject matter, and above that just for “truth” in general, has gotten a little bit extreme, perhaps. 🙂 In fact, I finally pushed Morgan Linton to the breaking point in terms of him finally censoring a comment of mine recently, but he’s in very deep doo-doo if the incontrovertible black and white of the matter ever has to be shown. 🙂 Glad you don’t do censorship so far. 🙂

            Regarding your domains, yes I have definitely liked a number of them a lot, and you have chosen a strongly rewarding path and mo. Frankly, if I could do it over again I would have done more of what you have done just for practicality. There have even been times, however, when I have even felt it necessary to defend some of your own domains from you yourself no less when it was evident you did not consider them to be worth what I would argue unwaveringly they are or were. That’s definitely a pretty droll scenario if you ask me. 🙂

  5. From 1980 – 2000 I sold over $100M in real property on the Gold Coast of Australia. There were 2 booms and 2 busts but I never changed my presentation to clients because I felt whilst it was successful in the past there is no need to make change I guess ( with tongue in cheek ) when prospective buyers would come to inspections many would say ‘ this property is not worth the asking price of the owner’ I always found less said by agent more traction but would often reply to buyer with,’ you may certainly be right and if you share what you are willing to pay today for this property then let me take your offer to vendor. This may sound mundane but I can only go on the results achieved.

    I consider myself to be only a small to medium Domainer of once holding 3000 domains that included pow.com oar.com organ.com nak.com with other average domains. I learnt quickly the actual business of marketing/selling domains did certainly have its differences from real property but nonetheless there were similar skills required by the seller and never to try and educate or hoodwink a buyer as that is the biggest no-no of all.

    I know you guys would probably have forgotten more than I would know about domains but one certainty is that domains with short generic dot com titles are like having property as close to the surf ( water’s edge) as possible

    I do like many of the comments raised above, as I feel the most important tool domainers must have beyond their own stock is knowledge. Professional Realty ( Real Estate) sales persons spend majority of their time doing due diligence with study of the property listed with all the demographics required for purchaser information.

    Just on a lighter side I kept one email from an interested person who wanted to buy my domain pinup.com and said quote/unquote. ‘ how much do you want for that pinup.com (very professional I thought mmm) I replied

    ‘I think it would be best to confirm that you have enough money to pay for it’ He replied ‘ I have more than you have ever seen’ I did reply for the last time and said OH my goodness then you could buy it with your pocket money. The End

  6. Eric, thank you for this excellent article and discussion.

    To high-end prospects I would suggest this:

    How many similar domain comps have you reviewed that provide the potential ROI with only 2 to 3 new clients?

  7. Another vote from me for not trying to “educate” an offerer. That’s kind of silly considering:

    • many offers come as low-ball pitches made by someone with nothing to lose by pitching a low-ball offer, and real cash to gain if it is accepted(fishing for bargains)

    • many offers are “one time” buyers… successful “education” would at best raise their offer this one time from a low-ball anchoring price. More expectedly, “educating” will increase your costs for selling your portfolio (since you will cost-average the additional expense across future sales, after this one fails to close)

    • everything you say will be “anecdotal” in the realm of information, to be compared by an astute student to all other information available on the issue, and this devalued. Will you engage in debate with each successive counter point based on 10 year old blog posts or point-counterpoint domain “comparables”?

    It’s not an issue, really. How much is it? Price. That’s too high. Make a counter offer, if you like. No, thanks.

  8. Some folks here have compared DN sellers to Real Estate agents so I thought I’d share an interesting anecdote. We bought an Alfa Romeo convertible from a real estate agent. We were armed with Blue Book info, ebay listings, etc. At the end of the day, she said the car’s price was what she was willing to sell it at and if it was what we’d be willing to pay, we had a deal.

  9. I think there are some valid points from the buyer and seller perspectives. Many times crap names are exactly that and thinking they are worth thousands is laughable but if it’s brandable or a common topic it may be worth that or more simply because it’s part of the marketing of the company’s brand. If you ask me though, some of the worst to deal with are domainers trying to buy names for dirt cheap. Most of them offer 2-10% of offers I turned down from legit buyers that actually want to use the name.

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