The challenge with negotiating is that I never really know if I did a good job. I may get what I think I want, and I try and do it without taking advantage of the other person. But, somehow, I often feel like I left something on the table that I shouldn't have. Or worse, that I may have taken more than my fair share. – @Hobi Michalec, Broker at Domain Holdings Group, Inc.
Some people can’t sleep at night unless they’ve squeezed every dollar out of a domain deal. However, while maximizing profits is an important part of being a successful domainer, we’ve learned that leaving a few bucks behind in a deal can also be a worthwhile business strategy. Here are a few reasons to negotiate kindly.
Win-Win
It’s not just an expression. A win-win is the natural outcome of a transaction that is both fair and equitable. The buyer and seller walk away feeling empowered because they have exchanged something useful and valuable at a fair price.
Second Time Around
It takes significant time and money to acquire a customer. It can be difficult to run a successful enterprise without repeat business. If we squeeze money out of a deal, then it becomes less likely that we will receive repeat business from that customer.
Referrals
Word of mouth is one of the cheapest and most effective forms of advertising. If we give our buyer a fair deal, then they’re more likely to tell their friends about us, so we'll profit again and again.
The Slaughterhouse
There is a saying in the stock market that pigs get rich, hogs get slaughtered. Profit is important, but we've got to be careful not to be greedy. Greed is not a sustainable business model.
Feeling Groovy
Last but not least, it feels good to give someone a fair deal. Making our customers happy makes us feel happy too. Life is about more than just dollars and cents.
I certainly feel this way and many professionals, both inside and outside the domain name industry, do too. Here are some examples from successful negotiators:
”Sometimes I settle for less than I sought, but in most cases I still end up with what I want.” – Donald Trump
”Who wants to be around someone who counts every last penny and never misses an opportunity to cash in? Those aren't the kind of people I want to be around and it's not the kind of relationship I want to have with a company.” – Charlie O'Donnell, the sole Partner and Founder at Brooklyn Bridge Ventures
”Lots of confidence is the only way investors can break sales records or squeeze a name for its full potential, but these are premium names, the best of the best. When we’re talking about any other kind of name, especially ‘liquid’ [names], you will always be leaving potential money on the table, unless it’s an end user sale.” – Josh E (@ikehook) of DomainShane.com
”Lots of confidence is the only way investors can break sales records or squeeze a name for its full potential, but these are premium names, the best of the best. When we’re talking about any other kind of name, especially ‘liquid’ [names], you will always be leaving potential money on the table, unless it’s an end user sale.” – Josh E (@ikehook) of DomainShane.com
”Leave the buck on the table. The goodwill and sense of fairness you build by doing so is worth infinitely more than that dollar.” – Mike Figliuolo, Founder and Managing Director of thoughtLEADERS, LLC
How does this philosophy work in real life? In September 2015, BlueStar.com sold for $90,000 despite an offer from a second bidder for $100,000. Why did the domain owner sell for $10,000 less than she was offered? According to Hobi Michalec, who brokered that transaction, the bidder with the higher offer had been aggressive and difficult. Meanwhile, the buyer they closed with was genuine and professional, so the broker and seller chose to sell to the pleasant buyer even though his offer was lower than the other bidder. “Sometimes it’s not the guy who yells the loudest or pushes the hardest who wins the deal,” Michalec says of the sale. When it comes to negotiating deals, money isn’t everything.
While it may seem counterintuitive to leave money on the table, it could actually be one of the smarter business decisions that we can make.
References:
- ”BlueStar.com” Domain Sale Guide. September 22, 2015
- ”Leaving Money on the Table” This Is Going to Be Big. September 23, 2015
- “Auction Recap February 10, 2016” DSAD DomainShane.com. February 10, 2016
- “When Negotiating Leave Money on the Table” Oakstone Company. April 5, 2012
