When buying a domain name from a person or company who previously used it, I am sometimes asked to not resell the domain name to a competitor. Typically, I am not willing to except this request. In fact, I recently lost out on an acquisition deal because I couldn’t honor that request in good faith.
For the most part, I am buying domain names as investments. The intent is to monetize the domain names as best as I can while I own them, with the ultimate goal of ultimately reselling them.
Most of my domain names are listed for sale on Afternic with BIN prices. I do not have any control over who buys the domain names I list for sale on Afternic or via any other platform. I also have limited control over the domain names I list for sale via Embrace.com because buyers regularly make offers in stealth mode.
I have found that many times the domain names I am interested in buying are so generic, it is unlikely to attract a competitor to the former owner. A brandable one word .com domain name can be used by any type of company. It is doubtful a competitor of the former owner will spend a premium to get its hand on a generic domain name, unless that generic name has something to explicitly do with that industry. Even so, I do not want to promise or agree contractually to never sell to a competitor.
Even if I were to agree not to sell to a competitor, most sellers would likely want that memorialized in the contract and ensure I keep that assurance in place to any subsequent buyers. Essentially, anyone who ever buys that domain name will have to agree not to sell it to a competitor of the original owner. That is difficult to enforce, especially if a domain name is sold many times. Since I would be the original person to agree to such a deal, if a competitor ever got ahold of the domain name, the original seller would come after me and I would be forced to spend money on legal fees to untangle the mess.
This type of request is not common, but it can be a deal killer for me.