I am sure you’ve heard the phrase (or one like it), “pigs get fat, hogs get slaughtered” as a warning to not be greedy. Well, unfortunately, I want to share how I got greedy and lost what could have been a profitable and substantial deal as a result.
I recently received an unsolicited mid five figure offer to buy a domain name I had acquired within a year for under $150. The offer started in the low five figure range, and after a couple of emails, the buyer made a mid five figure offer. Under normal circumstances, I probably would have accepted the offer, but having just closed a very large sale, I countered with a higher price. I figured the buyer would either accept the higher price or stand firm with the offer, and I could accept that if the buyer would not budge.
I sent a couple of follow up emails to see if we could find common ground somewhere between the offer and the price I provided. Silence. Time has passed, and I presume the prospective buyer chose something else. That is sometimes how it goes in the domain investing business.
I have always assumed that a prospective buyer who makes a serious offer will not simply go away when a higher counter offer is proposed. Typically, if someone makes a very strong offer, there is a good chance we can work out an agreeable price after a bit of a back and forth. Afterall, quickly accepting a good offer may give the buyer cold feet. I got greedy and lost a really nice deal where the escrow would have cost more than the domain name cost me!
When reading forums and social media, there is a propensity for people to advise others to go for a home run when they have received a solid offer and seek advise on how to respond. It is easy to advise people on negotiating when it is their money on the line. Sometimes buyers are willing to increase their offer to close a deal or will simply stay firm at their price hoping the seller opts to accept their offer. In this case, the prospect turned into a ghost.
Coming off of a really nice sale, I was willing to take a gamble and acted greedy. Sometimes it works out for the best, but sometimes, it does not.
Good points. It is always best to judge each offer independently, and having the domain name and offer you receive standing on it’s own merit, and not your current financial situation. Too many times it’s the other way around….meaning someone is in need of funds and allows a name to be sold at a bargain price. As an entrepreneur and multiple business owner, I’ve been on both sides. Until this industry gets more liquidity, this will continue to happen.
I get your frustration. Win some lose some is the attitude I try to keep. I recently had a base (what I considered anyways) offer for two 16 year old real estate domains. First the buyer asked if a price I had advertised a few months ago was still valid. When I said I would honor that then they asked to receive the 15% discount we would have given an affiliate to bring a buyer. I honored that request too. Then as you said Silence. And to date after one or two followup messages still nothing. So the bottom line is when you find a true buyer then reasonable market value should not be an issue and if as in your case and my case the buyer goes into oblivion then the only conclusion is that they likely were either not passionate or serious about owning that domain name either that or frankly not qualified so move on. Some will Some won;t So what! is an old Amway saying (i believe).
Don’t feel bad!!!
Greed is good.
Greed is part of the DNA
Greed is what keeps the economy moving!
Professional Domain Investor
Professional Internet Real Estate Investor
Professional Digital Real Estate Investor
Don’t beat yourself up.
Many times, buyers are happy to have an ‘out’ — and feel
they jumped the gun in making a big offer in the first place.
I agree with Aron. Sounds to me like the buyer wasn’t very solid at all.
Agree Elliot. Some years back I received a 10k offer on a NLLLL.com I had registered less than 5 years prior. Countered at 20k, figuring that if the buyer didn’t accept, that we’d compromise somewhere in between.
But no. Though not worded as such, turns out it was a take-it-or-leave it, “one-and-done” offer.
They left it.
If you want higher prices that means genuinely walking away from lower prices. If you are only “kinda sorta” walking away, you’ll be selling at lower prices most of the time. A buyer who knows what they are doing will test your pricing with months of silence.
It is up to you, but it is not possible to have both models at the same time where you get the amazing prices and also scoop up the lower offers, it is one model or the other.
Don’t send the follow up emails unless you are following a lower price model because that is signalling weakness in a bad way.
I agree with Aron and Andy. But Snoopy is the one who really nailed it.
Before replying, remind yourself of what your strategy was for this domain when you bought it. Then ask your self if that strategy is still valid.
If yes, stick to it. If not, what should be your new strategy for that domain? Stick with the new strategy.
When I bought it at auction, my sales valuation was lower than the offer. I was playing with house money and overplayed the hand.
There’s always a chance the buyer will return, but for now, it is a lost deal.
But did you? There are a thousand and one reasons why someone may kick the tyres and walk away without offering a reason. It happens to everybody who makes sales, whatever they sell. Not only to domainers. It is something we all have to expect at some point and without warning. Plus there will be the odd occasion when there is a “take it or leave it” without them saying so.
If we make every sale we expect to, we are underpricing. Then we stand to lose a lot more than we shall gain in the longer game.
Agree, the missed sales aren’t real revenue and never were attainable. Need to miss lots of lower sales to have some higher sales.
it keeps the economy moving!
premium domains for sale
Great post, Elliot. Thanks for sharing.
Just goes to show you that the domain industry is no further ahead today, then it was 20 years ago. No liquidity, poor buyer/seller communication and undervalued.
Way too much gray area!
Sounds similar to American elections, they’re no further ahead either since 2000 Lol.
Should be an interesting election. Probably won’t know for month’s who won the election.
Hopefully Joe Biden wins the election and America is respected again.
Good luck American domainers.
No need to bury the lede: “but having just closed a very large sale”
We could micro-examine this but I think probably a couple of smaller lessons is all we can squeeze out of it.
The first one refers back to my earlier question regarding initial strategy, “. . . normal circumstances, I probably would have accepted the offer”. It may be useful to reflect from time to time on what we do habitually under normal circumstances so we don’t get thrown off by an immediately preceding event. But we don’t make that reflection. I don’t remember ever making it.
The other arises from “I sent a couple of follow up emails . . .” That was after you’d suggested a higher price. It was the other party’s move. But that wouldn’t have arisen anyway had you done what you say you usually do.
The main barrier to learning anything from the experience, though, is that such an offer very rarely follows so soon after another attention-grabbing event, in this case a big sale. I’d wager none of us will remember this conversation or what we should have done by the time that happens again.
You got the nice offer which definitely indicates that the domain got that much value for the buyer. Silence is sometimes good. The buy will come back with more better offer.