As a domain investor who flips domain names for a living, I think that making a reasonable offer for an acquisition target is one of the most challenging things I do. If my offer is too low, I likely won’t receive a reply from the owner. If the offer is too high, I won’t make a profit when I try to re-sell the domain name.
Making a fair and reasonable opening offer is the best way to close a deal. For me (and from my perspective), knowing what is a fair offer and what is a lowball offer is mostly gut feel, but it’s also knowing what the market is and has been for similar domain names.
One thing I recommend doing before making an offer on a domain name, especially if you are talking high 4, 5, or 6 figures, is doing some market research on that domain name and other, similar domain names. I recommend checking out NameBio.com or DNSalesPrice.com to see if they have sales in their database you can either use to determine a fair offer or even justify your offer when you receive a response. I recommend checking for the actual name, synonyms, and variations of the name – like -ing, -ed, -es…etc.
Both NameBio.com and DNSalesPrice.com have sales archives for domain names you might not have heard about selling. For instance, you might not see a full sales report on domain sales under $1,000, but they might have been archived on one of those websites. It’s also a great way to learn about other names that sold, and perhaps if you see a name that sold for a great price, you can target that name as an acquisition in the future.
I recommend doing your market research before making an offer because that will help guide you on making a fair offer. Should the domain owner tell you that your offer is way off, you can reply with a link to a sales report justifying your offer amount and telling the owner that you think it’s fair when compared to a recent sale.