Chris_C

I wonder if some of the veterans at this domain game could give me a hand with my domain name negotiation. I've just finished reading duke's rookie guide, which was great, but I'm coming at this from a different perspective.

Namely I'm not looking to build up a domain portfolio or resell domains. Each domain I purchase I'm buying because it's one that I'm going to develop. I'm the end user, the sucker, the reseller's grail, the one who's constantly paying the rediculous (imo) fees because I need a good domain. Now I'm sure it's just that need that's getting me into trouble, but I can't seem to shake it.
????: NamePros.com http://www.namepros.com/domain-newbies/6983-domain-bargaining-negotiation-game-i-hate.html

I've found on DNF and namepros prices are usually quite fair, but unfortunately often the top level domains I'm looking for are in the hands of a buydomains type of fellow/gal. As a result I feel like I'm already behind in the game when I do a whois lookup and send one of those "Hello, would you please let me know if you're selling this domain and what your asking price is?".

99% of the time the response is "I would prefer you make an offer" or "yes it's for sale!". To which I'll respond with a very low figure (probably too low as sometimes I end up irritating the person when they realize I'm not *that much of a sucker*).

Now some of the tactics I've tried so far are:
1) Appearing knowledgable. i.e. stating what other similar domains have sold for, limitations/strengths of a given domain, my intention with purchasing the domain, etc.

2) Play stupid. Mention that I know very little about the domain, requested help from the seller, then balk at the expected asking price of the domain. This is actually a genuine balk as the prices are really quite comical. After a chuckle, I'll then try to seasaw back and forth until we get to somewhere agreeable.

3) Least successful, rarely but sometimes when I'm starting to get very irritated with a very poorly regulated industry I'll resort to insulting or sarcastic comments about freeloaders and/or squatters. *big surprise* this usually cuts of all email contact and sends me packing back to whois.sc!

Help?
Am I doomed to pay more than everyone else or can anyone give me some suggestions. I'm constantly overvaluing the domain name I think because I see the website potential in it, which is goodwill, which is what I'm adding to the domain after the purchase, which is what I don't want to pay for anymore... Is it ok to overpay for a domain, I guess so because in the end I'll make a profit but then, well, I'm sick of exacerbating the problem of squatting and getting taken

Coastalguy

My whole domain name philosphy is quite different than yours. I'll go on record saying that I buy names for quick sale purposes (doesn't always happen unfortunately). I do alot of "digging" for those types of names and research the hits etc. I have had no luck selling to potential end-users. So, rather than look for those big sales I'm just as happy moving alot of mid to little ones.

Having said all that, if I ever have a name that you like and want you'll probably not pay an outrageous amount for it. 75% of the names in my possession are priced below $100.00 and occasionally can be had for NP$. I hate to have to reg the same name after its year is up (unless I think it's "special").
????: NamePros.com http://www.namepros.com/showthread.php?t=6983

Good-luck Chris_C,

ST

__________________
FOR SALE: MLSHomes.org/MLSRealEstate.tv/VWTH.com

Jammer

Welcome to the Domain Name Business and the so-called "New Economy".There are literally hundreds of thousands Domain Name Sellers "out there".The majority of them are individuals and small businesses mixed in with a few "giants".Whether you agree with it or like it or not-It Is A Legitimate Business.
????: NamePros.com http://www.namepros.com/showthread.php?t=6983
Like any business,it is based on the law of supply and demand.If the demand is high,prices will increase and if the demand is low,prices will decrease.
-If a real estate developer wants to develop either a house or a subdivision,they first have to buy land to develop.They either purchase that land from either an individual or another business.The same is true in the domain business.This real estate developer would see this as a cost of doing business.Most people would call this real estate developer a businessperson,not a squatter as you mention.Like it or not,the Internet has become very commercial.
-What's the value of a domain and can you pay too much for one?My personal opinion is that,like anything else...the value of something is what the next person is willing to pay for it.If a person lists something at an auction thinking that it's worth say $1000 and the high bid ends up at $100...the value of that item at that time is $100 not the $1000 they hoped to get.The same thing applies to everything else.If a car salesman tries to sell you a car for $25,000,but you thinks it's worth $15,000....you have the choice to either buy it or walk away....it's your choice.The only thing that really matters is what you think something is worth(not what anyone else thinks)...and if you operate on that principle,you can be guaranteed to never overpay.

painperdu

I think Jammer is right on the nose with this.

The legal definition of Cybersquatting is much different than what is popularly believed. If you wish to appear knowledgable to a domain name seller understand this difference.

__________________
dotbob.com -Cheap Domain Name Registrations/Unlimited Web Hosting Plan $5.98/month

Chris_C

I honestly don't care whether I come across as knowledgable or an imbecile, and functionally I don't care a whole lot about the ethics or legality of domain squatting. (I actually do but it's not something I have any control over). You've both made some good points, but what I'm really after with this thread are some tactics that domain resellers & frequent traders use to get a better price on domains.
????: NamePros.com http://www.namepros.com/showthread.php?t=6983

Yes and no. Agreed if I'm getting value from it and can build it into my business model it's a "good purchase". If the seller was willing to let it go for much less, then it's still a poor purchase.

__________________
"There was a time when a fool and his money were soon parted, now it happens to everyone." -JM Keynes

Jammer

"If the seller was willing to let it go for much less" is something you'll never know unless you try....every buyer wants a bargain.
????: NamePros.com http://www.namepros.com/showthread.php?t=6983
In your post you mention the word Potential.The seller has obviously purchased the name because they see "Potential".You want to purchase the name because you see "Potential".If there is a huge difference in the price you want to pay and the price the seller wants for it...then there is a difference in what you both see as "Potential".
As for some "Magical Strategy"....I don't know if there's one out there.But,if it was me and I definitely wanted the domain....I would ask what the seller sees as the potential....take a look at what they say.....then do the research and then decide if it makes sense or not(maybe they are looking at something you are not).
If it doesn't make sense to you,point out the reasons why and then make a counter offer.If the seller still refuses...say okay thank you....and leave an open offer on the table....something like...if you ever decide you want to sell at $such and such a price,then contact me,I'll be interested.If you don't hear back,go to another name.Sometimes circumstances change for the seller....sometimes they don't.

CenterPoint

Not really there is also the option of having someone work as an intermediary for you. Normally you will pay a small fee for this type of service but it eliminates the hassles of dealing with the domainers
????: NamePros.com http://www.namepros.com/showthread.php?t=6983

There are a number of firms out there that offer this type of service, unfortunately they are not always well advertised.

DavidH

I have been both a buyer and a seller in my small way so I think I know where you are coming from.

IMHO,

Don't always think that the seller is in the strongest position - he or she may have the name but no other potential buyer, may need cash urgently or have other reasons why to sell quickly and hence settle for a lower price; you have some money but have the choice of walking on to the next name - you don't have to buy that particular name although it may take patience to wait for the next suitable one to come along.
????: NamePros.com http://www.namepros.com/showthread.php?t=6983

When I am a seller I expect the other person to come in with a price; often it is very low but sometimes it is more than I was expecting so they valued the name higher than I did. I have not yet mastered the art of how to respond correctly to a low offer and have lost a number of sales by going back too high. However I am learning and what works for me is to go back with a definitive figure, eg offers over $943, rather than simply a round number, eg $1000 or the old marketing ploy $995.

I tend to ask people to offer what they think it is worth to them and very often they will come back with a reasonably fair, not ridiculously low, initial offer

Don't give up on an initial NO from the buyer - I have had sales where the buyer definitely wanted the name, initially said NO, and then came back, probably because I did not close the door after the initial NO. But they have to come back to you; don't chase them.

As a buyer, you want the name for as little as possible. Be patient, decide what the name is really worth to you, increase your offers slowly by ever decreasing steps and see if that works.

Above all remember both sides really want the transaction, but you don't know whether the other side wants it more than you!!!

Good luck

DavidH

__________________
www.WildcatDomains.com

mr webname

Actually the tactic used by real domain resellers and frequent traders is to pick up names as they "drop" - by doing this a $6.95 catch can bring $100's or $1000's by selling on, or a great name that you want to keep.
????: NamePros.com http://www.namepros.com/showthread.php?t=6983

I buy and sell in a small way and find that patience is necessary as well as the need to keep searching. I will never even look at the "buydomains" type of setup, personally I think its a joke. I get offers sent regularly with prices that I laugh at.
There are bargains to be had but it means being in the right place at the right time - I've seen some real bargains sold on some forums - generally listed and quickly sold sold in US time when I've been asleep in the UK - bargains don't stay around for long.

Working the way I have done I have made a few bucks and picked up some great names for my own main business at quite low prices really. One or two names I've picked up have been absolutely priceless for me, but they were down to being in the right place at the right time - with one exception, a name I paid $150 for, they have been registered at "drop".

Light

Nice comments everyone! This was a great read and I can say I learned something

Chris_C

Yes agreed, thanks for the replies (: I'm still digesting the most recent ones... I've also picked up a book on general negotiating tactics and will share my thoughts once i've made it though.

__________________
"There was a time when a fool and his money were soon parted, now it happens to everyone." -JM Keynes

DavidH

"In the land of the blind, the one-eyed man is King."

If you specialise in a particular area, the chances are that you will know more about domain names than most people in that area, which should help give you more confidence that you know the correct worth of a particular name.
????: NamePros.com http://www.namepros.com/showthread.php?t=6983

Choose something you are interested in or have particular knowledge about and then look for names in that area. There probably will not be too many other "domainers" in that particular field. (My interest is in the marine sector - shipping and boating - see Loadline.com - I don't know anyone else who specialises in marine names, but I am sure someone will prove me wrong )

Good luck

DavidH

__________________
www.WildcatDomains.com

Jeff

I'm thinking that there might exist the possibility of formulating a "team" or "group" of domain professionals that could serve the need of both valuating domains, as well as negotiating for their purchase ... a la "Brokers" or "Intermediaries". I sent you a PM on this general "concept", and I wondered if this seemed like a viable alternative option (versus any ONE professional providing the service, or going it alone)? I think it would also be wise to have a developer (such as yourself, Chris) on the "panel", as well ... as though perhaps that this would possibly elevate the median valuation of a given domain in question (based on the assumption that a developer, not necessarily a domainer, may perceive the domain name as possibly more valuable in seeing the end product), at least one would/may not be "doomed to pay more than everyone else". Negotiations, offering prices, presentations to potential seller's could be agreed to and utilizing a "pool of talent" in this manner, as well.
????: NamePros.com http://www.namepros.com/showthread.php?t=6983
It's really just brainstorming here on my part on a fine domain Tuesday, but I wondered if the idea could possibly be beneficial to the current predicament, as posted initially above.
Thanks for any and all comments.

__________________

Chris_C

Yes centerpoint mentioned this already which means others have recognized this need as well. I also noticed another forum has a thread dedicated to this purpose. There is of course a lot that would go into making an idea like this work, but like coolhost said, at this point it's probably worth brainstorming.

As an aside, I read something interesting about general negotiating tactics the other day that seems to make sense. The suggestion is that you try to get the other party to commit their time into the potential deal. Get them working on providing information and exerting effort into the negotiation process as this creates a sort of "I better get something out of this" type of feeling. The longer and more invested you can make your "opponent" the better your chances at getting your bottom line.

Whether it's mumbo jumbo or not I'm not sure of, I'm going to give it a try though on a domain I'm negotiating for and will let you know the results via this thread.

Jeff

Interesting ... I bet this would have some general validity, though each would depend on the particular Seller. Please keep us posted as to your strategy and negotiations ... and I hope we all keep this thread going strong, very informative!
????: NamePros.com http://www.namepros.com/showthread.php?t=6983
See you soon, Chris.

__________________

Dave Zan

*whistles*

Information overload....alert.....

....he he he....sorry....tried to process what you all wrote here. Needless to say, all the info's priceless....

....oh no....information overload....alert.....shutting down.....

onspec

Some very good information here. I'll wade in with this.

I have bought and sold domains and have had my share of frustrations (what Domainer hasn't?). I don't believe there is a definitive right or wrong answer, particularly when it comes to price, but I think you have greater chances for success if you take a professional approach to the WAY you handle negotiation(s).

I have found that a little honesty and common courtesy go a long way in reaching a successful transaction.

Example 1:

When I am selling a domain and don't have a definitive price in mind, or I'm not sure what to ask, I'll reply to potential buyers with:

"Thank you for your unsolicited inquiry into (thisdomain.com). Due to the volume of requests that I/We receive, and to rapidly changing market conditions, I/We do not post prices. I/We would ask you offer the maximum amount that you are prepared to pay for (thisdomain.com). If that offer is sufficient, I/We will be prepared to sell you thisdomain.com (any transfer/escrow fees are for the buyers account). Thank you very much ....
????: NamePros.com http://www.namepros.com/showthread.php?t=6983

I always try to :

1) Let the potential Buyer make the first move... and then be prepared to back up my commitments with honesty and integrity. If you ask them for their highest offer and they come back, either I accept it at that price, or reply that the offer does not meet my minimum requirement. If the Buyer truely made his/her best offer, either it works for me or it doesn't. There is no dickering back and forth.

2) Leave the prospective Buyer with the impression that they have been dealt with in a courteous and professional manner. And should his/her views change, that they are welcome to make future offers.


Example 2:

I also use the same principles when listing domains. If the listing broker (such as Sedo or Afternic) offer you to list a price or "make offer", I'll decide which way to go based on the individual domain.

In the case of one very large domain resales broker, I applied to have my domain listed for sale. This particular broker only takes tier 1 - "cream of the crop" domains and wants to have strong input into the price the domain is listed for on their site. They liked one of my tier 1 domains and offered to list it for sale.

Here is the actual reply I got from them:

Thank you for your request to list (thisdomain.us) for sale at (Broker). We are interested in listing the domain, provided we can agree on a list price and reserve price. The list price is the price that will be shown on the site and the reserve price is the lowest price that (Broker) is allowed to accept for the domain. We cannot accept an offer lower than the reserve price without your consent.
????: NamePros.com http://www.namepros.com/showthread.php?t=6983

There is no charge to list the domain. If you agree to list, we will send a Listing Agreement to the email address on file in the who-is record, which you are required to sign and return via fax. If the domain sells, (Broker) keeps (x%) of the total sale price (minimum $x) and handles the entire escrow process, including domain name transfer.

We suggest a list price of $12,000 and a reserve price of $7,000 for (thisdomain.us). Please let me know if you would like to proceed under these terms or if you have any questions.

Best Regards,
(Broker Rep)


I didn't feel that their estimate of the value was appropriate so I countered with this reply:

Dear (Broker Rep),

Thank you for agreeing to list (thisdomain.us). However, I am not prepared to list the domain at the respective prices that you suggest.

The domain is at least as valuable as domainx.us which is listed on the front page of your current site.

If you are interested in listing the domain, I would be prepared to list it at $20,000.00 with a minimum reserve price of $15,000.00. If this is unacceptable to you, I understand and wish you much continued success.

Kindest regards,


These methods have worked for me. Collectively, it may serve all Domainers very well if we conducted ourselves as if we were representaing ALL Domainers in every transaction we engage in.

Best of luck with your buying and selling.

__________________
Do You "Tel"? Join TelMasters

Chris_C

Hi Onspec,

Thanks for a very informative post from the perspective of a successful reseller.

I agree fully that being highly courteous and helpful in correspondence from either side is very important and your strategy I'm guessing works quite well.

From my perspective as a buyer, when I contact you first about a domain, one of my first requests is your asking price on it. I as a buyer notice if you try to defer the responsibility of assigning value back to me in your reply email. That immediately says to me either; (1) You don't know what the domain is worth, (2) You're hoping I don't know and will offer a higher value than your reserve, or (3) You're a savvy negotiator and want to "do battle" so to speak.

????: NamePros.com http://www.namepros.com/showthread.php?t=6983
Negotiation IMO is a sort of game where each side has an absolute value that they cannot go past. For the buyer this is a maximum that they will pay, for the seller this is a minimum they will sell at. The ideal goal for each participant is to get the other party to pay exactly at their true maximum (certainly maximums can fluctuate during negotiation but there must somewhere be a true value). With this in mind there are really only 2 scenarios; (1) Max/Min overlap and it's "game on", or (2) Maximum/Miminum don't intersect so no sale is possible and both parties are wasting their time.

No matter how politely you say this, to me as a buyer, you've just asked me to give you the LAST thing I ever want to give you! IMO we've immediately started on wrong foot. Namely, you've indicated in your email that you are an experienced domain seller, yet you don't know/want to put a value on your domain. Further you don't know anything about me as a buyer (probably less experienced with domains than yourself as it is afterall your business), yet you want me to assign a value to the domain.

At anyrate, to flow with your case study, were I to receive that email from you I would respond very politely with something to the effect of either:

1) Playing stupid & Stroking your ego - Mention how I am not as familiar as you with domains and would be afraid of bidding too low or high a value. I certainly wouldn't want to insult you with a lowball offer but at the same time I am afraid of offering more than the domain is actually worth. What I'd like to do is find the value that is fair to both of us (not really, I want you to sell it to me at your minimum!). After that point, hopefully you reply with an offer and I then will proceed to "become informed" and work your price down. "A friend of mine mentioned this really great informational site on domains, namepros.com. I've been doing some reading and I was wondering if you could clarify yyy about zzz on thisdomain.com?" "I've noticed that thatdomain.net just sold for substantially less than your asking price at namepros.com, do you think you've miscalculated your asking price"? etc.

2) Low balling - Offer 1/10 of my maximum knowing it won't be accepted then go from there. Hopefully offering something somewhere in the range of "just beyond insulting you" to "an outright steal for me". Politely have you explain to me why you feel the domain is worth more (i.e. what other similar domains have sold for, traffic, etc.).

Do these strategies work? I really don't have an answer on that, I'm *trying* them out right now. On the domains I've really wanted I've been shut down probably because of max/min's that don't overlap, maybe because I'm a poor negotiator. Sometimes I've "lowballed" at 50% of the asking price only to have it accepted to my surprise. In this case I guess we were both "winners" but then, it still makes me say "Damn!" at the end of the day... Why didn't I offer "33%" instead!

I'm still learning from both this thread and out in the wild A friend just got an $x,xxx.xx asking price down to $xx.xx when he would certainly have paid $xxx.xx . I've tried 4-5 times now to do the same with others but so far without a lot of luck. I don't want to get into it yet, but to give you an idea think *patience* and *teamwork*.

DomainOgre

Great Thread.

Chris_C, you should also take into account what the seller paid for the domain.

As an example (without going into exact details), you asked me once for a price on one of my domains. I gave you a price that would be a nice profit for myself and was well below your stated budget price. I also said I would be willing to work out a deal with you and go lower.

However, you did not even respond so I asked you about it again. You then gave me a price that was 50% below what I paid for that domain name or about 10 percent of what I wanted lol. Sorry, but no amount of negotiating would allow me to lose money like that.
????: NamePros.com http://www.namepros.com/showthread.php?t=6983

How did I get it? I went low at first, but I then went halfway in order to meet his price. I am sure that he made a nice a little profit and we both made a good deal .

Simply put, compromise is a part of any negotiation because you can't always have things exactly your way when it comes to business. Buyers want good domains at reasonable prices while sellers want nice profits. I hope this real world example helps.

__________________
GiantNames.com - Domain Names Above The Rest!

Chris_C

Hi Ogre (: Real world examples are great actually, forming strategies on empirical results and subsequent theories is what this thread is all about.

In the case of the domain you just mentioned I don't think it was "bad" negotiation on either side. Namely, as soon as I saw the domain I wasn't interested in it. It didn't fit my purposes and while I should have sent you a quick message letting you know as much, I didn't.

None the less you still got me to make an offer on something that I didn't want , probably a bit out of guilt for not PMing you sooner. Apparently my opening bid wasn't really that low if it was 50% of what you paid for it, meaning it was pretty much right in line with where you'd have been negotiating with the original owner, no?


At anyrate, while posting a budget of 3k has the advantage that it generates a lot of interest, as you mentioned in a PM it also greatly inflates the value of asking prices. In retrospect it was a poor choice because instead of attracting some higher profile game/play domains, I attracted a tonne of overpriced (often reg fee) domains. (There have also been some decent domains as well, including yours, just not a perfect fit yet).

On reading that a second time, that's a fantastic point! Taking it a step further, wouldn't it be great to actually know what was paid for a domain? Does someone know if it's possible to do historical lookups on whois data?

DomainOgre

Hmmmm That would make sense, but I said PM me if you were interested in the domain in that thread and you did. If you were not interested like you just said then you should not have PMed me in the first place, correct?

About your offer: My point was not just that the price was low but that you did not want to negotiate further. Now I could have stopped too when I went after the name, but guess what? I would not have it and I got it for a big discount of what he was orginally offering it for. Seeing your budget, that could have been done here because this is a high-quality name with several extensions taken behind it. The price I quoted was just a starting point, because I probably would have took half that.

__________________
GiantNames.com - Domain Names Above The Rest!

Chris_C

heh yah that doesn't make a lot of sense does it. Sorry I just made the assumption that you'd pm'd me with a price, I did ask you what you wanted for it you're right. The rest is true however, in the end I didn't negotiate with you for it because I wasn't interested :/ Posting a budget was a horrible idea and a learning experience in itself. While I agree your domain was valued at higher than what I'd offered, to *me*, it wasn't worth much more. Namely, I wouldn't be developing it and I also don't want to get into reselling.
????: NamePros.com http://www.namepros.com/showthread.php?t=6983

The point is that in this case, our max/mins were completely out of wack.

Regards,
Chris

Chosen

This is a interesting thread.
Something to learn from

Well, truth is I need much learning on this topic :-)

My last negotation with a company didnt work well.

__________________
This signature is under construction

Chris_C

Hehe the strategy of contacting the previous owner of the domain by using waybackmachine is now 0/1 with disasterous results. Previous domain owner was annoyed about the unsolicited mail and told the current owner. Result being that I'm on less than friendly terms with the current owner now as well. *shrugs*

__________________
"There was a time when a fool and his money were soon parted, now it happens to everyone." -JM Keynes

Terry

Yeah - This is a good thread.

One thing to add. As implied above, it is a common tactic in negotiations to not be the first to mention a price. But, have you ever gone to a car dealer that did not have an asking price for their products? The one or two times that I have encountered a dealer like this, I leave right away. Something in my head tells me that the dealer is going to give my wallet a good cleaning.

I will deal with a car dealer that has unrealistic prices posted. I go in knowing that the dealer knows that they are not going to get the asking price, so it is up to me to make an offer. I know what I will pay and I tell the dealer what it is straight out, putting the ball back in their court. If they are still unrealistic, I walk.

Now, cars have a more well defined value, but the basics are still their. As a buyer you should expect that the owner will tell you what they want for the property that they own. When you have that information you can decide if you want to make a counter offer. If you do, make an honest (at least close to what you will pay) offer, and let the seller know that is all that you will do. If they are not willing to accept your price, thank them for their time, and walk.

By the way, I'm old fashioned. I believe that you catch more flys with sugar, than you do with vinegar. Be courteous and professional even when you've been insulted and are heading for the door.

__________________
T1 Internet Services - Direct U Telecom Directory