Be Consistent with Pricing

When business is humming along, I have the tendency to increase my prices because I am more willing to lose a less than ideal deal to secure a great sale. When things haven’t been going as well as I would like, my pricing may be a bit more flexible. This is particularly true on the higher end inventory I don’t price unless asked.

Nat Cohen shared some solid advice on Twitter that illustrates why price consistency can be helpful to domain investors. He highlights a recent negotiation he had with someone who had previously inquired about one of his domain names:

Consistency in Pricing

Recently learned that a start-up founder while in stealth mode anonymously inquired about a domain name about a year ago with no intention of buying it then, but simply to establish a price point. We’re now talking again after he has raised a large round

— Nat Cohen (@domainarts) December 10, 2021

and is out of stealth mode. The price I quoted recently is consistent with the price I quoted before. This is reassuring to the founder because he knows the price is independent of his business use and that I didn’t increase the price because I became aware of its value to him.

— Nat Cohen (@domainarts) December 10, 2021

As a domain name owner you often don’t know who is inquiring or why. A buyer may approach you through different brokers or over a period of years. While at times the market may dictate a sharp increase in pricing, it helps to have some logic to your price quotes, such as a steady

— Nat Cohen (@domainarts) December 10, 2021

increase over time. Price quotes that zig zag wildly up and down depending on your mood or your perception of who the buyer is could backfire and hurt your negotiating position if it turns out that the same buyer is on the receiving end of these inconsistent price quotes.

— Nat Cohen (@domainarts) December 10, 2021

One thing to keep in mind is that the domain name aftermarket is dynamic. Valuations change as the market and general economy changes. One word .com domain names, in particular, have sold for higher amounts this year than in prior years. It has also become more difficult to replace sold domain names so I need to maximize sale prices on my best assets. I may have quoted $100k for a particular domain name two years ago but have turned down inquiries and offers in that time that justify a $175k asking price.

That being said, prospective buyers who do not understand the nuance of the domain name aftermarket may think the investor is gouging them because they have built a brand in that namespace. It can be a fine line to traverse.