Sometime within the last 6 months, someone I don’t know emailed me to ask if I was interested in buying one (or more) of the three domain names he listed in the email. I was interested in one, and he told me the price was $500,000. When I saw the price, I said no and he asked for a counter. I told the owner we were too far apart, and I didn’t bother to submit an offer.
A couple of months after receiving the email, I saw that the domain name sold for around $10,000.
Had the owner started in the $10-50k range I may have made a competitive offer. His asking price out of the gate made me question my own valuation, and I didn’t want to submit a lowball offer or get into a valuation argument with the owner.
There are two lessons that I took away and want to share with readers.
A seller needs to have a reasonable price when he or she is making outbound sales. Inbound sales are a different story, but if we are emailing people out of the blue, they should expect to give a fair or at least reasonable price if they want to be taken seriously.
I am sure I bear some of the blame for not making at least some type of offer, but I figured it wasn’t worth discussing any further. Had I taken a chance and told him what I would pay, we may have worked out a deal. On the other hand, the guy could have told me off and called me a lowballer. I suppose it’s something to think about the next time.
I am not sure if I would have paid $10k for this particular domain name, but I probably would have offered something in the ballpark. At least some good came of this.
Been there many times myself, hurts a bit and puzzles me each time. In fact I had a very strong 6 figure offer on a domain about 6 months ago. I suddenly get an email from a known domain reseller (buyer/reseller) offering it for X, not much less than my offer to the former owner. I thought, gosh why was he so unreasonable and once decided to come down not even contact me again.
In general I think people just stink at good business, the smart one’s send out emails years later to everyone who had interest at some point, those one’s make me sad too lol
Yes I agree with you, if the price you could pay is at least 1/2 of the seller’s quotation, then you have to send a counter offer (if you don’t you are only an asshole trying to play hardball or a timewaster). Maybe you will not succeed to take him down to your max price, if the seller is a serious person, but you have to try, if you are serious too (maybe you can try, with few expectations, even if you could pay only 1/3 of the initial price).
If the initial request price is 10 times what you could agree to pay like in this case, then you are absolutely justified if you don’t send a counter offer.
Experience in making decisions like that is a rare commodity. I have mastered how to deal with people…it’s called speaking up…lol..probably why I have all the killer domains that I do!
Everyone thinks their domain names are the best.
Elliot I look at it this way. If a seller comes to me with a domain at a certain price and It is much higher than I would think of paying and then asks me for a counter, what would be the problem saying that “The price I would offer for this domain is XXXxx even if it is 100-200-300K less than what they wanted? The worst they could say is no and not counter my counter.
I see this happening a lot. I recently had a unsolicited email offering me a good three letter dot com. They shared no price expectation and asked for an offer.
I replied with a good domainer price, about 70% per cent of retail value.
They responded with $400,000.
I was pissed, why waste my time and of course theirs.
I think some new domainers like to dream and by stating such crazy high price evaluations, it makes them feel the prices are validated and they can go on feeling that “some day” they will be rich.
Had the owner started at a lower price? REALLY
Unless you ask, you will never get, now if you are emailing someone, and bothering them, they have a right to ASK a crazy number, if you want to be all offended and say you countered to high, I don’t want to do business anymore, that is your right. A smart business man takes it in stride, and talks it out, and has a discussion, not run away with his tail between his legs crying to his mommy.
Keep quoting high guys, these names are impossible to replace. GTLD’s are not the answer, good .com’s are getting pricey to replace.
All my names are listed at appraised prices. 2 different reputable automatic appraisals and my own. Most names are listed for the higher of the 2 appraisals. A few are below appraised prices. I add a premium for hot markets.
I have 6 figure names I would sell for 5 figures. BUT I am not going to advertise that. I advertise retail prices. YOU have to make an honest offer no matter how far apart you are with the seller.
I don’t understand why you did not make an offer anyway? 🙂 He asked for $500000, and why would you not offer $5000 or $10000 anyway? He came out of the blue and nothing prevents you to offer even $100. It takes just a few seconds of typing, literally. What is the worst that can happen? He can say “No!”. But, he can also start conversation and there is a possibility that you get the domain at much cheaper price than he asked in initial message.
If I ask $xxxx for some domain and you offer me $10 I will respond anyway. I am aware there is a possibility that the person who offered $10 thinks I may be stupid and will accept $10, but is at the same time ready to pay $xxxx if he cant get it cheaper.
Today I received $60 offer at Sedo, and I want mid $xxxx. Of course I responded with my counter offer. I read that many will not even respond on $60 offers at Sedo. I cant understand that. When you are already logged to Sedo and opened this offer, it takes few seconds to create counter offer with any amount you want.
If the person who offered $60 is potential end user and wants this domain badly he will probably make another offer. But he could have sensitive personality, and although being a end user he might search for another similar domain as you offended him with no response. He also could be some domainer ready to pay some bigger amount as he have potential end user in mind, but you will loose him if you not respond and all.
When I am buying, I will low ball the owner. I always can raise my offer. I will not send $100 offer to Rick Sch. for some of his domains, but if I don’t know the owner and there is a possibility he is not aware of the real value I will low ball him for start.
I even reply on “Thanks, not interested” with something like “no problem, thanks for your reply” and I also add a sentence or two to highlight again the advantages of my domain and to inform him/them that he/they could contact me later if they change their mind. I had success with this tactics many times.
Is it a one word domain, Elliot? And what is the estibot valuation for that domain?
I am wondering why did he sell for just $10k..
I certainly agree with you on this. One point I would like to add is that where outbound sales often goes wrong is that they try to adapt the client to the product, instead of adapting the product to the client. What I mean by this is that they will sell the features of the product but not actually say how it can benefit the client. In this case I think it is as much about understanding the client first before selling the product with outbound sales I believe that real success can be summed up in famous saying “understand before you are understood”.
Thanks for your post Elliot, I will look forward to reading more of your posts in the future.
I’ve already posted on this blog about this very topic before.
The pro-discussion, pro-negotiation commenters here are the ones who are right.
This is possibly even my biggest “complaint” about buyer and “broker” habits in the industry, and I’ve more or less said as much here before. “Brokers” who approach to buy on behalf of their secret “client” are even the worst – almost without exception in my experience they don’t discuss or negotiate a single syllable. They simply run.
It’s a two edged sword for me to even be posting here on this topic:
1. As someone who does like a nice occasional sale, it’s in my interest to try to get the word out that people should be willing to have a conversation and make a try no matter what asking price you first hear. Being put off by an asking price way out of your ball park is not the answer, especially when the seller may really be willing to accept something much less. Self (as seller) included sometimes.
2. Most of the time I’m the buyer, the “domain-stalker.” By simply not being fazed or put off by any asking price, and by simply being willing to discuss and make a try, I can sometimes buy domains well below said asking price and acquire a nice domain I really wanted to buy. It’s contrary to my interests to let other “domain investors” in on that little secret. Surprise – it really happens sometimes, in a really nice way.
Case in point for #2: Not long ago at all now I was able to buy a domain I had first tried for years ago. Originally I was given an ask of what I believe was $25K to the best of my recollection some years back. Was able to buy it just recently for $2500 from the same seller. I’m happy to keep and use it for now, and if anyone wanted to buy it from me, I would quote an ask anywhere from $25K to solid 6 figures, especially depending on the state of the subject matter industry. The state of the industry it pertains to could very realistically catapult its value that far. And if I was in the mood to let it go, then someone could try for less than $25K with me as well.
On a smaller scale, there was one recently for which I was quoted $2200. Didn’t want to pay that. Offered $800 plus another domain in “barter.” Wanted this domain for use, but didn’t want to pay much. Came back later with $1200 cash only, seller was happy with that – domain acquired for much less than the ask.
Get the picture? Was quite pleased to finally get them both for $2500 and $1200 respectively. So just make the try and don’t worry about any worst case possible reaction on the part of the seller, because it may be the furthest thing from what would happen and both you and the seller may lose out substantially by keeping silent.
P.S. Was even able to buy one from the same seller a short time later for only $3,000. Later also approached by a Sedo rep on behalf of some secret client, gave an ask near $1 Million. It’s a killer domain that I got for next to nothing compared to what it’s worth. As usual, the “broker” simply ran and never even said another word despite being invited to reply regardless.
From my perspective, I certainly wasn’t the end user prospect, so it made no sense for the seller to ask a ridiculous end user price. Had he asked close to market price, we may have been able to work out a deal.