Often times domain buyers aren’t who they say they are, or if they are, they are buying on behalf of another entity. Domain owners should use caution when they are approached by a person or entity with whom they aren’t familiar. Domain owners need to research who a potential buyer is to maximize the sale or prevent a UDRP.
There have been times when companies inquire about a domain name simply to use the owner’s willingness to sell the domain name as proof of bad faith. If a domain name may even slightly infringing on a company’s mark – even if it’s generic, a company can claim bad faith in a UDRP if the owner names a price that he’d sell it. This is ridiculous, because everything is for sale for a price, but it can come back to bite the owner in the ass:
“From July, 2006, the Complainant (using the services of a domain name broker) made several approaches to the Respondent with a view to purchasing the Domain Name from the Respondent. Initially, the Respondent did not reply. However, after a further approach in January, 2007 the Respondent indicated that it would not accept less than a five figure sum. The broker responded indicating that the Complainant was prepared to pay $10,000. The Respondent responded on February 20, 2007 indicating that it was not prepared to sell at that figure. This provoked the question “What would interest you in a sale then?” to which the Respondent replied that they were so far apart (not in the same ballpark) that the negotiations were unlikely to lead anywhere. The broker then asked if $100,000 would be enough and the Respondent replied that it probably would. There the correspondence ended.”
Another reason why knowing who is making an offer is important is because the buyer may be able to pay much more than he would lead the domain owner to believe. In the case where a large company wants a domain name for a large project, the domain value could be much, much greater to them than to the domain owner. Their objective is to get the domain name for the least amount of money, while your objective is to get the most for your domain name.
With this being said, there are a few things that every domain owner should do before even responding to an unsolicited domain inquiry:
1) Research the name of the person who contacted you. I recommend first doing a Google search of the person’s name in quotes. If the person’s name is “Greg” you should also look up Gregory or another name the person could be known as. Use sources such as Linked In or Facebook to see if the person is listed, and if so, see which company they might represent.
2) Research the email address of the person. Just like #1, search Google for the email address. This can be useful to see if the person is listed in a forum as a domain spammer or perhaps you will find something else out about the buyer.
3) View the email headers and see where the email originated. Make sure the email is from a legitimate source and the person is being truthful about who they are. If you receive an email from an unknown person/email address but the IP indicates they work for an ad agency or other F500 company, you will know where the buyer is probably from.
4) Before mentioning any prices, ask who the buyer is and what his plans are. I want to know that all inquiries are legit before even considering whether to sell a domain name. Why waste your time negotiating if there isn’t a chance of a deal?
5) Let them start with an offer. If they’ve emailed you out of the blue, they should make the first offer. If they insist on you leading off with your price, tell them to take a hike. What person tries to buy a name without a clue how much he can/will spend? If they won’t make an offer, I would walk away – or not even respond. If they are serious, they will come back.
6) Search the USPTO for any potential trademarks. If there is a trademark – even if the domain registration pre-dates it, you could be set up for a UDRP. If you receive an email from someone about a name where a trademark exists, proceed with extreme caution. Some people/companies are either uninformed or misinformed, but they think the domain is rightfully theirs if they have a trademark. Oftentimes, they aren’t very nice and think they have the right to take your name.