Domain Brokers Should Come With an Offer | DomainInvesting.com
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Domain Brokers Should Come With an Offer

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I think most domain brokers predominantly represent domain name owners on the sale-side. There are quite a few brokers and brokerage firms who offer acquisition services though (buyer brokers). When a domain broker is working on behalf of a buyer to buy a domain name, they should be ready to make an offer, or at the very least, they should know their client’s budget.

I occasionally receive inquiries on my domain names from brokers representing a buyer. The first question I ask the broker is either “what is the offer?” or “what is the budget?” If someone is inquiring about one of my domain names on behalf of a client, it makes sense that they would know how much their client wants to spend or is willing to spend.

I don’t generally price my top tier domain names, so coming up with a price isn’t always a simple process, especially when I don’t have any information about the buyer (beyond the fact that a broker was hired). It usually makes more sense to contemplate an inbound offer rather than just give a price.

When I make inquiries to buy domain names and the domain owner responds asking for an offer, it wouldn’t make sense to say “I have no idea.” I think most domain owners expect people making inquiries to present an offer when asked, and that is what I do. If the domain seller doesn’t have a price and the domain buyer doesn’t have an offer, how can a deal get done?

After I shared my frustration at receiving a broker-made inquiry without an offer on Twitter yesterday, Andrew Rosener (Media Options) shared the rationale for this and made a few good points in response to me. Essentially, he told me brokers sometimes collect prices on a group of names to present to their client. If the domain owner didn’t respond to an email from the broker, the domain name might not be presented to the client.

Brokers who are working on behalf of a client should let domain owners know why they are inquiring. It is helpful to know my domain name is being considered amongst a group of other domain names as opposed to a buyer being interested solely in one particular domain name. This might actually help the broker as I could price it accordingly.

As a domain owner, I want brokers to know that it is frustrating to get an inquiry and learn that the broker has no idea how much their client is willing to spend for the domain name. A broker should have the offer at the ready to be able to either proceed with a negotiation, close the inquiry, or open escrow.


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (27)

    Todd

    Domains is the only industry where sellers don’t have an asking price. Cars, boats, real estate, jewelry, etc….all have an asking price. Maybe we would all sell more names if we actually approached the sales process differently and at least gave some form of an asking price even if it may be high. At least it starts the ball rolling.

    August 22nd, 2017 at 11:21 am

      J.R.

      Cars, boats real estate, jewelry are mature commodities & products. How many years did it take to know the price of cars, land and real estate? Moreover, there is no exact parallel for domains; they are a unique intangible asset unlike any I’ve ever heard of. Just look at how Mike Mann turns, what many domain speculators consider pigeon shit, into gold nuggets. Or how Rick Schwartz sells a domain for 7 figures where most would have taken $100K; wasn’t Porno.com purchased for $42K but sold for $9 million in 2015?

      In reply to Todd | August 22nd, 2017 at 12:33 pm

      J.R.

      All the commodities and products you mentioned were part of markets that matured over long periods of time. Domains are intangible assets unlike any known to mankind and the market is still immature compared to other commodities. Do we know how the 2017 retail apocalypse will impact domain pricing? Or the crash of gTLDs next year? Look at how Mike Mann, turns what many domain speculators would call pigeon shit, into golden nuggets on a consistent basis. Or how Rick Schwartz sells domains for 7 figures, when others would have taken $100K. Wasn’t Porno.com purchased for $42K and sold for $9 million in 2015? Every domain speculator should provide or not provide a price based on their own assessment of the marketplace. Maybe in 5 years, the market will be mature enough that most domains have an asking price like cars, jewelry, or real estate…

      In reply to Todd | August 22nd, 2017 at 12:39 pm

      John

      All the commodities and products you mentioned were part of markets that matured over long periods of time. Domains are intangible assets unlike any known to mankind and the market is still immature compared to other commodities. Do we know how the 2017 retail apocalypse will impact domain pricing? The crash of gTLDs next year? Look at how Mike Mann, turns what many domain speculators would call pigeon shit, into golden nuggets on a consistent basis. Or how Rick Schwartz sells domains for 7 figures, when others would have taken $100K. Wasn’t Porno.com purchased for $42K and sold for $9 million in 2015? Every domain speculator should provide or not provide a price based on their own assessment of the marketplace. Maybe in 5 years, the market will be mature enough that most domains have an asking price like cars, jewelry, or real estate…

      In reply to Todd | August 22nd, 2017 at 2:36 pm

    Logan

    There’s plenty of people holding onto raw land who have no clue what their ‘asking price’ is. If someone makes them an offer, then they can think about taking the cash or just holding onto the raw land some more. A domain name is no different: there’s plenty of people holding onto domain names — who are not “domainers” — who have no clue what their ‘asking price’ is.

    August 22nd, 2017 at 11:49 am

      Todd

      I agree but when you’re in the business of selling domains is when I disagree.

      In reply to Logan | August 22nd, 2017 at 12:48 pm

      Elliot Silver

      I’m in that business, but some names aren’t for sale.

      In reply to Todd | August 22nd, 2017 at 12:54 pm

    J.R.

    All the commodities and products you mentioned were part of markets that matured over long periods of time. Domains are intangible assets unlike any known to mankind and the market is still immature compared to other commodities. Do we know how the 2017 retail apocalypse will impact domain pricing? The crash of gTLDs next year? Look at how Mike Mann, turns what many domain speculators would call pigeon shit, into golden nuggets on a consistent basis. Or how Rick Schwartz sells domains for 7 figures, when others would have taken $100K. Wasn’t Porno.com purchased for $42K and sold for $9 million in 2015? Every domain speculator should provide or not provide a price based on their own assessment of the marketplace. Maybe in 5 years, the market will be mature enough that most domains have an asking price like cars, jewelry, or real estate…

    August 22nd, 2017 at 2:36 pm

    Mark

    Hi Elliot,

    How about if a broker approaches you about a domain name, you work out a price to be presented to a buyer, and then the broker never gets back to you? And, no follow up is given from the broker, ever, even if you send a follow up email to the broker.

    Yep, this has happened to me. I realize that brokers are busy and responding to every email from everyone is not possible. But you would think if a dialogue has begun it would continue until all parties are informed of an outcome.

    August 22nd, 2017 at 3:37 pm

    John

    In my humble opinion, one of the dumbest things ever is when you quote a price and people treat it as the last word and are not willing to negotiate if they want the domain. Everything is usually negotiable, and and asking price is just that – an asking price. The final price can be wildly different from the first ask.

    I’ve acquired many great domains as the buyer myself by merely being willing to negotiate. In fact, one of the last ones I just sold for $xx,xxx was one I was first quoted $xx,xxx for myself a few years before I was finally able to buy it for low $x,xxx.

    August 22nd, 2017 at 4:14 pm

    John

    And so to summarize, here’s my message to buyer brokers: if someone says the price is $50,000 or $100,000, then you may still be able to get it for $35,000 or $75,000. Unless you’re just lazy or not willing to even try to ever negotiate.

    August 22nd, 2017 at 4:16 pm

    @domains

    Unless it’s a domain being used like Apple.com, Google.com, etc I’d say pretty much every domain is for sale. It’s just a matter of price. Saying a domain isn’t for sale is really just a sales tactic.

    Ofcourse the domain seller wants to see an offer come in with an inquiry, as it benefits the domain seller. It tells the seller how serious the buyer is, and they may make an offer higher than the seller expected.

    Turn this article around and make it from the buyer’s point of view, or the broker working on behalf of a buyer, and they’ll want the owner give their price first. Most things that are actively being sold in the world have a price attached up front, sure there are exceptions. Imagine the frustration of a buyer seeing a domain for sale, and the owner not putting out a price? The buyer doesn’t want to offer any more than the seller will take.

    Also, in any negotiation the first party to throw out a price usually does worse than the other side.

    I don’t think either side is wrong, it’s just negotiation tactics and you shouldn’t be surprised if inquiries don’t always come with an offer. It isn’t up to the buyers to help domain sellers get the most for their names.

    August 22nd, 2017 at 5:02 pm

      John

      And that’s exactly why it’s so clueless to not be willing to negotiate or to take an asking price as some kind of last word…

      In reply to @domains | August 22nd, 2017 at 5:54 pm

      John

      Or for that matter, the first offer as well…

      In reply to @domains | August 22nd, 2017 at 5:55 pm

    John

    I had a marketing co contact me. I gave a price and she said too much must be lower lower. After debating with her how key words in the domain name are still valuable I suggested that her client should make an offer. She said that if I don’t give her a low price they would use 2nd choice. I replied back that she should tell her client to take their 2nd pick.

    The marketing company is working within an estimated budget and wants to keep the majority of their client’s money in their pocket and not the domainers.

    August 22nd, 2017 at 6:37 pm

      John

      Hey John, see what I just wrote below. It was partially in reply to you actually…

      In reply to John | August 22nd, 2017 at 7:15 pm

    Bill Sweetman

    Excellent points made here, Elliot. I won’t take on a client as a Domain Buyer Broker without there being a budget written into my brokerage contract with the client. I don’t want my time or any domain owner’s time wasted by someone on a vague fishing expedition.

    August 22nd, 2017 at 6:40 pm

    John

    One of the biggest obstacles now is the industry itself, including some in the blogoshere. For whatever the individual reasons are, you have people at the top in important positions buying into the idea that domain names are worth much less than they used to be and that the so-called “market” gets to dictate that. Sorry to be so blunt, but stupid. If Rick were willing to say something I’m confident he would agree.

    I just ran into more of that because one of the famous selling platforms had a really surprising counter-offer restriction I never even knew about or even heard of before. Okay – so we’re all familiar with restrictions on initial listing prices, but who knew that once you complied with that there could also be a restriction on any counter-offer you wished to reply with when an offer comes in? Is that stupid, or is that stupid? Are they really so clueless they do not understand there are important strategic and larger big picture industry related reasons why you need the freedom to reply as you see fit even when you know a sale will probably not occur?

    And the reason I got for this restriction on freedom to counter as you see fit when I put in a request about it? Yep, you guessed it:

    “blah blah…the current market…blah blah…”

    August 22nd, 2017 at 7:11 pm

      John

      That typo should read, “Sorry to be so blunt, but how stupid.” 🙂

      In reply to John | August 22nd, 2017 at 7:12 pm

    Garth

    The buyer broker is looking to get a good deal for the client (or themselves).
    Laying down an offer breaks the don’t move first rule.

    August 22nd, 2017 at 7:15 pm

      John

      If no one does it, then you have a stalemate and nothing can happen. So the best thing to do if that occurs is to simply state what you really think the domain is worth and what you would really like to get for it. Then if the potential buyer or broker is not foolish, they will be willing to negotiate and make a counter-offer if not match your price.

      In reply to Garth | August 22nd, 2017 at 7:23 pm

      John

      Or of course you can start even higher… 🙂

      In reply to Garth | August 22nd, 2017 at 7:24 pm

    @domains

    And what broker working for a buyer is going to divulge their budget to the domain owner? Doesn’t hurt for the domain owner to ask, but I imagine 99% of the time the broker won’t give up that information. It’s like asking the broker who they’re working for, they won’t tell. The domain owner is in the driver’s seat if the buyer really wants the domain and has a good budget. On the other hand, the buyer is in control if the domain owner is motivated to sell, and the buyer has a budget at least within the domainer’s lower range price expectation. The art of negotiation helps you get to the sweet spot of a sale that both parties are satisfied with. As a domain seller I think you have to have a price point or at least a range in mind to throw out to an inquirer if they are really stubborn. Even something such as “your offer would need to be at least low/middle/high 4, 5, 6, 7 etc figures for me to consider it”.

    August 22nd, 2017 at 7:32 pm

      John

      Good post. I know that seemed a bit odd to me too: “And what broker working for a buyer is going to divulge their budget to the domain owner?”

      In reply to @domains | August 22nd, 2017 at 8:44 pm

      Elliot Silver

      They may not tell the truth, but most will give a # they hope will get a deal done. In most cases, the budget is flexible depending on how much the client wants a particular name.

      In reply to @domains | August 22nd, 2017 at 8:47 pm

    Steve

    About a decade ago, a well-known IP broker company, which represents Fortune 50 companies, contacted me wishing to acquire one of my domains with a maximum budget of $10,000. I declined.
    One week later, the budget had increased to $50,000. I declined.
    Two weeks later, the budget had increased to $150,000. I declined.
    10 days later, the budget had increased to $250,000, and I was urged to accept within 48 hours or the “client” would choose another domain. I declined.
    7 days later the budget increased substantially and I accepted. The client was one of the 10 largest companies in the world in market cap. They ended up buying some additional assets (patent, trademark, software code, etc)

    I should mention everyone I knew advised me to accept the $250 K offer, except my dad who said I should go on my instinct, as I was in the position of power.

    August 23rd, 2017 at 11:44 am

      John

      Great post. 🙂

      In reply to Steve | August 23rd, 2017 at 3:25 pm

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