I regularly receive price requests for domain names I own, but I don’t always give prices when asked. One of the major reasons why I am sometimes reluctant to give a price is that I don’t want a “prospect” to take my price and try to sell my domain name to someone else before he or she buys it.
I’ll share a hypothetical example with you:
Let’s say someone asks me about the price of [Example].com, and I give the person a price of $10,000. This person can then go out and try to find a buyer for [Example].com at a higher price than I quoted. If he is successful, he will buy the domain name from me and immediately flip it to his buyer. If he is not successful, either because he can’t find a buyer at a higher price or he is caught in the act, he will disappear without much of a trace. Aside from reputational damage, there is little risk for this person for doing something I believe is unethical.
Some people might say that there is nothing much wrong with this approach. In theory, the original seller gets his asking price and the buyer makes a profit on the resale. All parties are theoretically happy. Unfortunately, there is a major risk that is born by the domain owner when someone tries to sell his domain name without permission.
Let’s say the prospect received a price for [Example].com and pitched the domain name to [Example], Inc. without the permission of the owner. This company would not know that the domain name is being pitched to them without the permission of the domain owner. They could easily pass this email on to their IP counsel and file a UDRP or even litigation claiming that the domain owner is acting in bad faith by trying to sell them the domain name that matches their business.
Unfortunately, this activity happens more often than one might think. In fact, I know of a major UDRP that was won by the domain owner because of something along these lines.
When I receive a price request from someone I don’t know, I do what I can to identify the prospect. If I believe that this prospect could potentially try and use my price quote to re-sell it before a deal is done and I am concerned there could be added risk, I simply require that the prospect submits an offer.