Tip to Make a Fair Purchase Offer
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 For instance, you might not see a full sales report on domain sales under $1,000, but they might have been archived on one of those websites.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.
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About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.Reach out to Elliot: Twitter | Google + | Facebook | Email
RH
Nice post Elliot, let me ask about the last part, do you feel the same when people make you a low offer and then use another sale as a comparable. I know most don’t and some get rather loud and foul when someone says that to them. I just ignore it, but I know many that really ticks them off.
The feeling is each domain is unique so the comparable means little, I know a lot of looney tunes who are now thinking their cvcv same two letters is worth $1million because of the DuDu.com sale. Obviously lunacy but people will make all kinds of comparisons to fit their agenda.
Elliot Silver
@ RH
If it’s a real comparable like “UsedCars.com vs. UsedTrucks.com” I will discuss the differences like # of cars and # of trucks…etc. If it happens to be someone who thinks UsedCars.com and TrucksUsed.com is a good comp, then it’s laughable. That said, it’s all a negotiation and each party has his own objectives.
They say that numbers don’t lie, but you can use numbers to state your case and the owner/seller can also use numbers to state his case, and if it’s close, we can bridge the gap.
I agree that all domain names are unique and the value/price takes many factors into consideration. Comps are just one negotiating tool.
BullS
The power of saying ” Go to Hell”
I don’t need your stinkin money.
WalletDomains.com
Just after a bit of advice, the domain name – PayByCell.com sold not long ago for $9,370 , I own the domain – PayByNFC.com ( NFC – Near Field Communication ), should I price the domain around the $10k mark? I know that other businesses have started up with the same type of names , ie – PayByPhone.com .
Thanks
Adam
Dang. I shoulda sold paybytelegram.com when i had the chance.
WalletDomains.com
@Adam
Ill ask the question in 1 year again, when your using your mobile to buy things.
Cheers
Mike
If I suspect you’re another domainer then I wont sell to you at all. 99% of the time the office prices gives that away so its little effort.
Adam
@wallet welcome to 2011 where I can get on my phone pull up paypal and send you some cash or where I can grab a square device and charge your card using my iphone. Citi is already doing this stuff with mastercard. That doesn’t make your name any more valuable.
walletdomains.com
@adam
Its 2012 mate.
P.S. good luck in 2011