Tip to Make a Fair Purchase Offer

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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 For instance, you might not see a full sales report on domain sales under $1,000, but they might have been archived on one of those websites.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.

9 COMMENTS

  1. 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.

  2. @ 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.

  3. 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

  4. 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.

  5. @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.

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