Rebranding is Expensive

When I am in a negotiation to sell a domain name to a company that would use the domain name by launching a new brand or rebrand an existing business, I often think about how expensive of an endeavor it will be for the company to do so. In addition to their web related graphics, the company needs to update signage, business cards, marketing materials, shirts or uniforms, and other merchandise. This is expensive. Frankly, the domain name would likely cost a fraction of the entire rebrand, even if the domain name is expensive.

On one hand, a domain owner can make the argument in a negotiation that the company should pony up a bit more for the domain name since they are going to have to spend big bucks on the rebrand. On the other hand, reminding a decision maker about the expense of a rebrand might give them second thoughts about buying the domain name in the first place.

I think there may be a disconnectwhen domain owners are negotiating with a company that would need to rebrand after acquiring the domain name. The company understands all of the extensive upfront costs of rebranding as well as the SEO risk and risk of becoming unfamiliar to customers. Domain investors, myself included, see a company willing to spend handsomely on a rebrand, so they should be willing to pay a bit more for a key piece of the puzzle.

Keeping things status quo is often the easiest thing to do. There is less risk for marketing managers and other decision makers. As people who sell domain names, we need to realize that there is a lot more at stake than simply buying a domain name. Oftentimes, the purchase of a domain name is the least expensive aspect of the acquisition. It is something to keep in mind during a negotiation.

Elliot Silver
Elliot Silver
About The Author: Elliot Silver is an Internet entrepreneur and publisher of Elliot is also the founder and President of Top Notch Domains, LLC, a company that has closed eight figures in deals. Please read the Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest. Reach out to Elliot: Twitter | Facebook | LinkedIn
  1. If you only saw how much companies small and large spend on IT, accounting and legal services, advertising, travel, insurance, etc. you would realize how trivial domain names are viewed outside this industry.

  2. Yup, I agree Leonard. I had an awesome brandable name that was short, memorable and an exact match to a local business start-up (no TMs involved). They contacted me, I offered them a steal of a price as it really suited them and I was happy to see it go a “good home”. They hummed and hawed over the $600 price, and walked away even when I pointed out that the newspaper ad campaign they were just running cost more than that!

    That newspaper ad campaign is long gone, I’m not sure what happened to the start-up, and I sold the name on one of the brandable marketplaces for 4 x times what I had quoted that business earlier…

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