Buying Domain Names

You’ve probably heard that huge companies like Microsoft and Google buy domain names using intermediaries at companies like Mark Monitor and Corporation Service Company. They do this to get a better price and to stay stealthy with their acquisitions. Although most domain investors don’t have the budget to make ultra expensive domain acquisitions, I do think it can be beneficial to use a buyer’s broker to acquire a domain name, and several companies offer this type of service at reasonable costs.

Here are five reasons a domain investor might wish to hire a buyer’s broker:

1) Stay Stealthy – If a domain owner knows you are a domain investor, you might not even get the courtesy of a reply to open a discussion.

2) Depersonalize Negotiations – Many things can be said during the course of a serious negotiation, and it can be frustrating. With a buyer’s broker, you don’t have to take things personally.

3) Eliminate Negotiations – If you tell your buyer’s broker a price, it’s that company’s job to negotiate to get you that price. If you don’t like negotiations, let a broker handle them for you and you won’t have to worry about negotiating.

4) Seamlessly Close Deals – Many companies will handle just about all aspects of the transaction. You don’t have to worry about transfer or payment issues. It can be frustrating to deal with people who don’t have much knowledge about how to sell or transfer a domain name.

5) Get a Second Opinion – A buyer’s broker likely knows the market value and can let you know whether your offer is reasonable and/or has a good chance of being accepted. Recently, I’ve been using a buyer’s brokers to try and negotiate great prices on domain name acquisitions. If I can improve my buy rate just a bit, it’s worth the added cost. It certainly saves time and effort telling someone the names you want and the prices you’ll pay to get them.

Have you used a buyer’s broker service before, and if so, what are your experiences?

I have a couple of colleagues who buy great domain names in specific verticals. We’ve done business before, and it seems that whenever I bring them a great domain name, they always balk at the price at first and refer me to a report about a great purchase the company made within the past two years.

That purchase was a steal of a deal in my opinion, and they now use it as a comparable when someone brings them a name to purchase or when they are in the midst of negotiations.

Recent comps are a great tool to use when negotiating. Without a MLS system, there are few ways to really value a particular domain name, and a comp shows actual market data. If you can show a buyer or seller a comparable sale, that person might be more inclined to negotiate in your favor, and it’s a great way to say, “your asking price isn’t in touch with reality.”

When you buy a specific type of domain name and are continuing to buy without plans to sell, it might behoove you to report your lower priced acquisitions to an outlet like DNJournal. If you snag a steal of a deal, you can direct future negotiations to that sales report in the hopes that they will see it as a comparable sale. The seller may do his or her own research to find other comps, but if there aren’t many out there, it could be a great way to get a domain name you want at a terrific price.

Personally, I haven’t done this before because as a domain seller, I don’t want my purchase price disclosed. I do think someone who has no sales plans but wants to buy more names in a particular vertical could benefit from having “beneficial” comps reported.