I have most of my inventory-quality domain names listed with a buy it now price and a less prominent link to make an offer. I tend to receive more offers than people buying the domain name straight away, so I tend to price the domain name with that in mind. I was recently asked how much of a discount I am willing to accept to sell a domain name, and I want to share some broad insight.
There are several main factors that I consider before agreeing to a discounted sale price:
- The buy it now price. Knowing that the majority of prospective buyers will submit an offer rather than clicking the BIN price, I tend to price my names a bit on the high side. This allows me to comfortably offer a discount without cutting too much into my returns. If my BIN price is more in line with what I believe is the true value of the domain name, I am less likely to give a discounted.
- How much I paid to buy the domain name. I need to ensure that I am profitably selling my domain names, so the price I paid will help determine whether and how much to discount.
- How easy it will be to replace the domain name if sold. If I can easily replace a domain name via auction or private acquisition, I may be more willing to give a deeper discount on a domain name than on a domain name that will be tough to replace.
- How much I need the liquidity. If I have had a dry spell with domain name sales or I could use the funds to purchase other assets, I may be more inclined to give a larger discount.
- Who is inquiring about the domain name. If the prospective buyer is a huge corporation, I will likely be less willing to give a discount than if the buyer is a small church or non-profit organization.
Situationally, I may not take anything less than the asking price or may take up to 50% off the buy it now price depending on the factors above. Most of the time, I price names knowing I will have to negotiate a bit. I tend to be more or less generous with the minimum offer depending on the domain name.
One thing I have done in the last few months is tighten the minimum offer standards for most of my domain names. Previously, the minimum offer settings on the account would guide the portfolio. Due to some limitations at DAN, that amount had to be the lowest price domain name in my portfolio. I received many very low offers that were not worth responding to. For many of my names, the minimum offer is either around 50% of the BIN price or what I would consider to potentially the absolute rock bottom price I would consider if I needed to close a sale pronto.
Ultimately, I would say that I might be willing to sell a domain name for a maximum discount of 50% off the BIN price, but the domain name would have to be easily replaceable and I have a strong desire to sell the domain name. Most typically speaking though, I would generally discount somewhere between 10-20% depending on the factors outlined above.
Question.
What should I expect if I’m dealing with a buyer who has a IP from Aruba?
Thanks
I have no idea how much of a discount someone else would take.
Re: Who is inquiring about the domain name.
I would rethink that one regarding churches and non-profit organizations. Most of those are more profitable than other businesses. To be brutally honest, many of them are just very lucrative tax free enterprises (including churches), often mis-using sympathy of people to gain advantage. Of course, each one needs to be thoroughly investigated. I’d also look at what general informational use the domain could be put to by perhaps individual buyers – that is, what resource and enrichment they could add to the www as a whole.
I agree wholeheartedly. No need to discount any further for a church, synagogue, temple, or mosque. These private, elective organizations are already not paying property taxes on some of the most valuable land in communities all across America, thus not making a significant financial contribution to their local communities in the form of property taxes, which pay for public schools, libraries, streets, and more. Those annual property tax payments foregone leave plenty of money available to acquire a good quality domain name that only increases a house of worship’s brand equity in their local communities.
I don’t discount domain names. I have a min. offer and and assess anything that comes in above that.