I inquire about a lot of domain names in private. The inquiry to deal ratio is somewhat low, but I have found that private acquisitions yield the best results for my business. When dealing with domain owners, I am occasionally asked what I plan to do with the domain name.
A reader emailed me this past week, and he asked me for some feedback about how to answer this question, and I thought I would share the gist of my answer with you.
I almost always answer by telling the domain owner that I am buying the domain name as an investment, and I don’t have plans for it yet. If I do have plans for the domain name, I usually tell them that I buy domain names for investment purposes and would prefer to keep my plans private. I also let the owner know I would be buying the domain name on my own behalf.
This question is most likely asked because the owner is afraid that he or she will sell the domain name too cheaply. Perhaps they have owned the domain name for 15+ years, and they don’t want to undersell it to a person or company that is going to use it to create the next big thing. I can understand this, as I wouldn’t want to sell a domain name I have owned for 15 years and have to hear about it in the news, knowing I left money on the table.
Honesty is probably the best policy in a situation like this. Letting people know that the domain name is an investment probably tells them that there isn’t a huge round of funding behind the acquisition.
Some people may not wish to do business with a domain investor because that means they are likely selling it for less than full value. Others will appreciate that they are able to “cash out” on a domain name that hasn’t been used or is being underused.