A Seller Request I Reject

4

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.

4 COMMENTS

  1. There are other platforms that list the names and IP address of the potential buyers when they sent in the inquires and not in stealth mode

  2. That would never be an acceptable term unless the domain was for a specific development project I was doing. Even then, unlikely it would be agreeable.

  3. “Most of my domain names are listed for sale on Afternic with BIN prices.”

    Is that how most of your sales occur?

    • No – just a small percentage. The majority are via inbound leads to the for sale landing page or outbound sales.

Leave a Reply