Domain Buying Tip: Make a Realistic Offer

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It’s 2018, and virtually all domain names that have substantial value have been registered for many years. The best way to buy these domain names is either via broker or through private acquisitions. If you want to achieve greater success acquiring exceptional domain names, you need to make realistic offers commensurate with their values.

People and companies that own exceptional domain names have either owned them for many years or they acquired the domain names in the aftermarket. If a domain name has been owned by an entity for many years and it has substantial value, it is very likely the owner has turned down many great offers. If a domain name was acquired in the aftermarket, it is equally likely that a lot of money was spent to acquire the domain name.

Whatever the case may be, a domain name owner is going to need a significant offer in order to be enticed to sell a domain name. Assuming the domain name is actually valuable, I think it is critical that a prospective buyer make an offer that is commensurate with its value. It’s 2018, there is no point in offering $1,000 for a $50,000 domain name. There is a far greater chance of being ignored than working out a deal.

For many years, domain investors, startup founders, brand consultants, marketing firms, and others have spent countless hours trying to acquire domain names for their holdings or on behalf of others. It is highly likely that an owner of a valuable domain name has received and declined many offers over the years. A cheesy pitch or a blind inquiry asking if a domain name is for sale is less likely to yield a response than a reasonable offer.

I have found the most success buying domain names by 1) contacting the right person and 2) making a reasonable and fair opening offer. If a prospective buyer doesn’t know what a reasonable and/or fair offer is, the prospect should probably spend more time doing homework.

9 COMMENTS

    • Who will be selling?

      The people who have owned domain names for 20+ years have already endured at least one bad recession and many endured the .com bubble long ago. What makes you think that will shake the tree? Domain names cost $10+/- a year to keep, so it’s not like the annual holding cost is going to be a deterrent.

      • Those who are over-leveraged will be the sellers.

        And we havent seen a credit cycle turn where the malinvestment has been liquidated. To date, the .com & great recession were merely ‘papered over’ with Central Bank money printing.

        • Do you think there are domain investors who are over leveraged or big companies that own great domain names?

          I can’t imagine there are a lot of investors buying domain names with credit, but what do I know.

          • Have to agree with Matt’s position a bit. Domainers don’t have just domains as investments. A lot have a day jobs and depend on other revenues. They might have mortgages, credit card debt, debit in general, maybe even over leveraged. When the cycle ends, some people will lose their job and liquidate everything that can be sold. The Chinese are liquidating A LOT of 3-letter CHIPS currently. Also sth to do with over leveraging in the Chinese p2p lending sector and the fact that domains were posted as collateral over there.

            I saw it in 2008 and 2009 where I got some nice names at a good discount. In the next recession asset prices will suffer across the board as always. Certainly won’t affect ALL premium domains but there will be opportunities for sure imo.

  1. Interesting conversation. Domains and real estate in much stronger hands than 2009, and domainers that have true premium domains are well enough off. Stock buybacks in equities are not going to stop in near term. Central banks prefer inflation over deflation, and are very active in equity markets compared to 2008.

    This time might not be different but crypto clearly presents a new problem for central bankers. Last time we had a currency crises was 1970s after Nixon went off gold standard, and it was commodities that exploded in value. Volker had to raise Fed funds rate to 16%, and Wall St and/or Fed used paper futures to tear down silver from Hunt Bros cornering the market.

    We are closer to a currency crises than another asset bubble imho. It’s important to differentiate the two.

  2. “We are closer to a currency crises than another asset bubble imho. It’s important to differentiate the two.”

    Currencies and asset prices do correlate. In 2008/2009 we had a debt and liqudity crisis and the dollar index rose 40% during that time because most of the debt was issued in USD and people needed to sell stocks, bonds, commodities, fx, and real estate to cover those loans. That led to a depression in asset prices across the board. We saw similar developments with the turkish lira in recent weeks and with the depreciation of the Yuan against the USD. 2008/2009 affected consumers and corporations because of leveraged households and balance sheets. Now it seems that countries with a lot of outstanding debt issued in USD are the ones that are most affected. Russia, Turkey, Brazil are 3 examples for now. The inability of countries to borrow abroad in their domestic currency, therefore issuing debt denominated in USD. In finance that is called “the original sin”.

  3. Yes know exactly what happened 10 years ago. Also know what happened in 2000. Do you know what happened during 1970s? Gold went from $35/oz to $800/oz in less than 10 years (In $USD terms) because of a fiat currency crises.

    Central banks’ balance sheets have expanded 4X’s over since 2008/09. Do you really think we are coming upon another deflationary black swan? The Petrodollar is dead. China and Russia now deal directly in oil without the USD. Others following same path.

    Russia and Brazil’s economies are commodity based, and Russia barely has any sovereign debt at all. US is at about 100% debt to GDP. Russia sold off all of their UST few months back and flattened the yield curve. Doesn’t sound like a country starved for dollars. You should reassess your understanding of geopolitics and debt to GDP.

    • I think you’re clueless and wrong. Russia is dead in the water. It doesn’t matter that they don’t have any sovereign debt. Their domestic currency the Ruble lost 60% (!) against the USD since 2008. That’s your currency crisis right there. They may trade in oil and gas with China (oil and gas are traded in USD by the way) but the fact is, the world’s reserve currency is still the Dollar. That is why Russia and China are holding VAST amounts of T-Bills. Russia alone still holds $50 billion worth of US paper. Not sure where you read that Russia sold all their T-bills but it’s dead wrong. They had to sell the rest because they needed CASH to stay liquid. A country that doesn’t trust their own domestic currency.. What does that tell you? US debt to GDP is BAD for decades now. Who cares? It’s about trust. It always comes down to the one question. Who do you trust more? Your government in some emerging economy or the US Treasury? What is the lesser evil? Why are rich Russians and rich Chinese fleeing their country and move to London, Toronto, San Francisco, Vancouver, France?

      When the next crisis hits and the flight to quality (USD) starts again, think about my words and how foolish you were.

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