Buying Domain Names

One question I frequently receive after making an inquiry on a domain name is “what do you plan to do with the domain name if we reach a deal?”

People are curious about whether I am going to re-sell the domain name or perhaps turn it into the next Google or Facebook. Some are probably a bit hesitant to sell a domain name they’ve owned for 10 years when that name could become the next billion dollar brand or be re-sold for 10x the sales price. When you think about it, the reasoning isn’t really all that sound, but it’s human nature.

Although I won’t lie to someone during a negotiation, I generally won’t give away my plans for it either. I may be very vague about my intentions or say that I haven’t figured out my plans yet, but I won’t get into details about them.

You don’t want to give them an idea about what they can do with the domain name if they choose not to sell it, nor do you want to give them any leverage in the negotiation if they know that their domain name is your only choice for what you want to do. It will generally cost you more to acquire it if you give too much information away.

Additionally, when I plan to re-sell the domain name, I don’t mention that either. Inevitably, the person will ask me to broker it and split the proceeds. I have no interest in brokering domain names.

If they’ve seen my blog (many people search for my name and arrive here), they know I buy and sell domain names so they assume I am doing that with their domain name, which may be true. The way I explain it to them is that I am only interested in taking on 100% of the risk for 100% of the reward. If they want to keep doing what they’ve been doing and hope someone comes around with a better offer, they are welcome to do so. Alternatively, I am able to pay all cash up front right away to buy their domain name.

Some people don’t like this and won’t sell their domain names knowing they are going to be re-sold. The majority of people look at the offer as likely the best they’ve received, and they happily accept, not worrying if they’re leaving anything on the table.

I want to share a piece of domain buying advice with you based on an inquiry I received on one of my domain names from the Voodoo.com sales form.

In the field asking for an offer, the person replied (with spelling and punctuation corrected): “How much?  I am a domain buyer, not an end user.” Translated, it means, I am not going to offer you what the domain name is probably worth.

Although I do appreciate the fact that knowing the buyer wasn’t going to pay top dollar, I was able to save some time with the negotiation, I think it is a poor way to open a negotiation to buy a domain name. Why tell the domain owner you’re not going to pay him or her what the domain name is worth?

My reply was simple: “too much.” If the buyer was going to come close to what it would take to get me to sell the domain name, he would have asked how much is too much, but he did not.

When you’re negotiating, I think you should act in good faith, but don’t kill the negotiation before it starts. When replying to a domain forum sales post or to a domain newsletter listing, it may be appropriate to mention that you’re not going to pay end user pricing and that’s an expectation with a listing to other domain investors. However, on an unsolicited offer, it’s probably not a good idea to initially mention that you’re not an end user, unless you don’t want much of a response.

Someone asked a question on DomainQuestions.com that I’ve been hearing quite a bit lately: “Should I protect myself by buying the corresponding .xxx domains?” People have seen the .XXX brand protection advertising and are wondering if they need to protect their brands.

Generally speaking,  I’ve  recommended  that people apply for .XXX domain names to correspond with their important brands, only if the .XXX domain names could legitimately be used as an adult website. For instance, DogWalker.xxx wouldn’t make much sense to be used for an adult site, but Dating.xxx would make sense and could potentially be confusing once the general public knows more about .XXX and uses it more regularly.

Some more conservative brands or organizations should probably protect their brands regardless, so they don’t have to explain a .XXX site to constituents or customers who may hear about the .XXX site through the grapevine.

I’m not too worried about this for most of my brand names, so the few I want to protect, I will do my best to reserve at General Availability, which begins on December 6. For me personally, I didn’t want to spend a $60 non-refundable application fee, when I didn’t see much potential for confusion with my brands.

.XXX landrush ended yesterday, and the auctions for the domain names that have more than one entity applying for them will begin on December 12 at Pool.