Whether you’re a child telling a parent you didn’t eat the bag of candy or a parent telling a child the bag of candy must have accidentally been thrown away, getting caught telling a lie is uncomfortable. In a business situation, such as a negotiation, being caught in a lie can create distrust and kill a deal.
While some people may feel like stretching the truth or outright lying during a domain name sales negotiation is acceptable, I always assume the counter party has more information than they may have. To me, this means I assume they know prior sale prices, listing prices, and other pertinent information about the domain name. Even though it’s not possible, I also assume the counter party knows about previous offers I received. With that in mind, I won’t say something the counter party knows to be untrue.
On a recent phone call sales negotiation with the most obvious best buyer for a particular domain name, I discussed the valuation of the asset. The prospective buyer proceeded to ask a couple of questions about a previous sale listing for the domain name. Apparently, the former registrant or a domain broker reached out to him to try and sell the domain name. As a result, the prospect knew the approximate price I paid to acquire the domain name and was not willing to pay more. I don’t really blame him since it was a recent acquisition. We couldn’t come to terms on a deal.
In general, most people don’t do much research before trying to buy a domain name. This is a big reason for the $100 offers for domain names that are worth five or six figures. Many people see a domain name they like and submit an inquiry without much thought. For high value domain names, these casual prospective buyers probably aren’t great prospects.
Serious buyers, on the other hand, will perform due diligence before submitting an inquiry. Someone who is serious about buying a domain name will arm themselves with intel. Many will spend time evaluating domain names – sometimes this takes months or even years. Oftentimes, this means they know about prior sales and comparable sales. They will use this information to their advantage much like a domain investor will do the same.
If a prospective buyer has a brand or service that matches the domain name, it is also likely they have been pitched the domain name by someone, particularly if it is or was listed for sale on a platform or with a sales-focused landing page. Whether it was a legitimate broker for a platform doing outreach or a frontrunner, the prospective buyer may have additional intel about the price history of a domain name.
Being untruthful to a serious buyer could be a major setback for a negotiation. I don’t want to do business with someone who is straight up dishonest. I always assume prospective buyers know the history of a domain name, and I negotiate with that in the back of my mind.