Depending on your background and experience, negotiating can either be a great part of the job of a domain investor or it can be one of the worst aspects. I think it is expected that negotiating with a buyer or a seller is one of the most necessary aspects of domain investing. People have different negotiation strategies, and there are many factors that go into choosing the right strategy.
I saw a Harvard Business Review article about negotiation strategy that I thought I would share with you. The HBR article discusses some research done to see if a strategy of being nice is better or worse in a negotiation than being firm and tough.
These researchers created a fake, gender-neutral persona to ask Craigslist sellers for 80% discounts via email. Warm and friendly emails got less rejections — but they were also more likely to be ignored. https://t.co/ZglKTbbyaF
— Harvard Business Review (@HarvardBiz) September 9, 2019
You should take some time to read the entire article, but here’s an excerpt:
“We found that warm and friendly messages were just as likely to elicit a counteroffer as tough and firm messages (around a 31% probability in either case). But whereas firm messages got more active rejections, or outright no’s (24%), than warm messages (14%), warm messages were more likely to be completely ignored (54%) than firm messages (45%). And in this kind of online context, it’s arguably better to get an active rejection than to simply be ghosted, because with a rejection you at least get a response that you can then try to negotiate on.
When sellers did offer a discount, it was larger when Riley’s message was tough and firm. In particular, sellers were more willing to accept the 80% discount offer when it came from a tough buyer (about 13%) than from a friendly buyer (less than 9%). Because the average phone price in our sample was $435, these results imply that the tough and firm requests generated $35 more savings per phone than the warm and friendly requests.
It appears that being firm can sometimes lead to better deals, at least in a distributive negotiation, than being warm.”
While the research was done with people buying phones, I think it can be applied to negotiating to buy or sell a domain name as well.
Negotiating to buy or sell a domain name can be stressful for some people. It can also be one of the most exciting or thrilling aspects of domain name investing. It would benefit domain investors to read articles and studies about negotiation tactics and strategy to determine the best way to sell their domain names.
AWESOME read Elliot. I’m thinking that somewhere between “Firm” and “Warm”, there’s a need tor “tact” and a “sixth sense” about the buyers limits.
My (one of my) dilemmas has always been trying to set a price, “what will you sell it for?” I usually ask them to submit an offer. I sell fairly often (Lot.us, $3,500 a couple of weeks ago) but I’m learning. Learned a LOT from your Blog, thanks. Also, I’m of the impression that the most common way by far for people looking for a name is to put it in the address bar and see what happens. With that in mind, I’m making a slew of landers with Godaddys GoCental, i.e. http://petsyes.com
Even if it were true, who could buy that many domains to reach the numbers where this statistical ratio would get into effect? Domain deals which can be ruled by statistics are mostly being done through BIN listings and no direct contact. Everything beyond that is an art.
Friendly but firm.
friendly and tough I would say.. that’s what Namecheap is.