One of the most difficult aspects of domain name sales is that many people still have no idea how much a domain name is worth. It is always a bit humorous to receive a $100 offer shortly after receiving a 5 figure offer for the same domain name. Although it can be slightly frustrating to deal with uneducated offers, it comes with the territory. If there was a pricing model for domain names, it would be more difficult to get good deals, so I will take the uneducated “lowball” offers.
I thought I would share a typical response to lowball or uneducated offers for domain names. Most of the time, prospective buyers take this good-natured rebuke in a positive way, although there is always the potential for someone to get angry about it. After all, many prospective buyers will think I (or you) own a domain name they can use and I (or you) are not using the domain name in a productive way. This is obviously flawed thinking, but it is how many people think. I often wonder if they would think the same way about undeveloped property owned by a private investor, but that is a different story.
Here’s a response I give to people who make a lowball offer:
If you can go back in time to the 1990s, you might be able to get a one word domain name like [Redacted].com for $80 🙂
You should probably have a look at the DNJournal year to date sale chart with public domain name sales to help set your expectations: http://www.dnjournal.com/ytd-sales-charts.htm As you can see, meaningful one word .com domain names sell for tens of thousands of dollars to millions of dollars.
I think you would be hard pressed to buy any decent domain name – even in a non-.com extension – for $80 these days.
Good luck with your search.
This may have been adapted from seeing various other responses over the years, but it seems to be a friendly response to help set expectations since many people don’t have a clue about the value of domain names. This saves some time negotiating with someone who is clueless and it really helps to show what domain names are worth. I have probably closed a few decent deals that started at low 3 figure offers, but for the most part, my response is an attempt at being nice but telling the prospect that they have zero chance of acquiring a decent domain name for such a low budget.
I acquired more than 100+ quality domains with lowball or uneducated offers, I can’t complain.
Yes but probably not from domainers.
“If there was a pricing model for domain names, it would be more difficult to get good deals, so I will take the uneducated lowball offers.”
Okay Elliot, you lost me there. You have come out in favor of abominations like Estibot, though I find your particular reasoning on that to be not completely unpalatable and not so terrible within the limited scope of your stated purposes in using such things, but “appraising” in general is certainly a “pricing model for domain names.” And what you have just said is exactly one of my biggest objections to it, that it makes it “more difficult to get good deals” as such services haven’t got the slightest clue what many domains are worth and mislead people into believing they are worth far less than they really are. So we already have a pricing model, Mike Mann is about to make it ten times worse, and it stand to harm good deals all the worse as well.
I think Estibot has its uses, but that is not really of consequence here.
If there was a pricing tool like the MLS or Kelly Blue Book for domain names, good deals would be hard to find. Why would anyone sell a domain name for $2,000 when a legit source (like MLS or KBB) says it is worth $100,000? If there was a definitive source of valuations, it would be harder to get deals. The nature of this business makes it impossible for there to be a definitive price guide.
Thanks Elliot for your insight and willingness to serve us in the industry with your time and wisdom. You are always willing to offer help even if it means controversy. Thank you for all you do. Giving low-ball, buyers a point of reference with real world sales statistics to help them understand domain values is important and has worked for me as well on many occasions. Most domainers don’t respond at all to low-ball offers (usually from other domainers), but I admire your respectful response since it helps promote professionalism and good faith for our industry. Great job as usual Elliot.