Different Prices for BIN on Marketplace vs. Direct Inbound

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A couple of months ago, I needed something from Target. I can’t remember what it was, but I needed it more quickly than when I would get it if I bought it online. I went to the Target store and noticed the price in-store was higher than the online price. Although ordering online may be more convenient than going to a store, actually getting the product right away is more convenient and there are additional costs associated with keeping the inventory in the store.

This got me thinking about domain name pricing, and  I think some people might have a similar philosophy when it comes to domain names.

Many domain investors list their domain names for sale on marketplace platforms like Sedo and Afternic with buy it now prices. If a domain name sells via one of those platforms, the domain name is either automatically pushed or transferred to the buyer, or the seller needs to facilitate the transfer or push. The platform handles the payment disbursal and manages the transfer or account change to the buyer. It is typically a convenient process for the seller.

On the other hand, when a seller deals directly with a buyer on an inbound inquiry, there is more work to do to close the deal. Not only does the buyer and seller engage in a negotiation, but when a deal is struck, the seller needs to spend time and effort to finalize the deal and transact. At best, the seller just needs to facilitate escrow and take care of the  domain name transfer. At worse, the deal becomes a time suck educating the buyer about escrow and making sure there are no issues with the domain name transfer. There may also be time spent going back and forth on the contract. It seems like the bigger the company that is buying a domain name, the more issues there are with the contract.

Put simply, more effort goes into managing a private sale than a BIN platform sale. As a result, domain registrants may quote a higher price for a domain name when a buyer comes to them directly than if the domain name is bought via marketplace platform. It takes more effort, so it is more expensive. In addition, a buyer engaging with a seller gives the seller additional time to do diligence on the domain name to understand whether the BIN price is fair.

One issue the seller should keep in mind is that the buyer can also do diligence and potentially see the lower BIN price. The buyer can either simply buy it via platform or call the seller out on the price differential. Some buyers will have done their diligence before engaging with the seller, and it could get sticky if they see the different prices. This can cause the buyer to call the seller’s ethics about pricing into question, although it can easily be explained about the extra time and effort that goes into dealing directly with a buyer.

As always, you are welcome to share your thoughts about this and discuss whether you think this is problematic.

4 COMMENTS

  1. Great info. Not to go off subject but if you take a screenshot on your phone of the online price the store always honors it. Just go to customer service with the item and they will give you the online price. I have done it many times at Target, Best Buy, Walmart, Children’s Place etc…

  2. Escrow.com has been offering their API for a while. That is something that parking services like Bodis utilize –there is a contact form that collects the required data and initiates a transaction at Escrow.com with specified domain and specified price between the seller and the %username%

    One can have their own contact forms (with their own design) at their domain landers. So a visitor can come and initiate a transaction right away, it is not any more complicated than a marketplace purchase. No extra marketplace fees. I expect more and more domain investors to use this in the future.

    Would be great if Epik could also offer an API like that – competition is great and Escrow.com does not deal with cryptocurrencies.

  3. I have given a higher price when contacted directly as well and have explained exactly what you’re saying here. I’m glad I’m not the only one.
    Also Todd is correct that Target will honor the online price in the store. They will also price match if you show them a cheaper price at Amazon or Walmart for the same product they are selling.

  4. I am always concerned with being “caught” by a potential buyer with a lower BIN than what I quote them directly.
    My current way of handling it is to have my starting direct price the same as my BIN price. I can afford to drop my direct price 10-15% without losing money compared to BIN price, since I am saving on commissions.

    The other point is that I only offer BIN prices for relatively lower value domains, so that I am not risking that much offering a BIN price. For higher value domains, where due diligence and negotiating play a bigger role – and where we are talking about larger amounts/differentials of money, I don’t offer BIN price.

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