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Bob Hawkes

Setting The Minimum Offer Value For A Domain Name

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By Bob Hawkes, Nov 18, 2020
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What minimum offer would you set for a name with a $2000 buy-it-now?

  1. less than $100

    14 votes
    5.7%
  2. $100 to $200

    44 votes
    17.9%
  3. $200 to $800

    58 votes
    23.6%
  4. $800 to $1200

    70 votes
    28.5%
  5. $1200 to $1600

    30 votes
    12.2%
  6. $1600 to $2000

    30 votes
    12.2%
Total: 246 vote(s)
  1. Bob Hawkes

    Bob Hawkes Top Member NameTalent VIP Gold Account Trusted Blogger

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    In most cases, marketplaces require specifying a minimum when you enable make offer on your domain names. Is it better to set this minimum offer low, so more prospective buyers will start a conversation? On the other hand, that might have a negative impact on price expectations, and limit the price that they are ultimately willing to pay.

    About a year ago, NamePros member elmoney summarized the question this way.
    Should minimum offer values be adjusted for each domain name, or is it acceptable to set the same minimum offer amounts for different domain names? If you do allow low minimum offers, is the number of offers received a valid indicator of value of a domain name?

    I don’t know the answers to any of these questions. However, together the NamePros community has data which can help inform our understanding. I urge you to participate both in the main poll in this article, as well as the additional polls linked later in the article.

    In addition to voting, please leave comments. I will summarize the findings in a second NamePros Blog post on the topic of setting minimum offer prices.


    What Minimum Offer For A $2000 Domain Name?

    Let’s suppose that there is a domain name that has a buy-it-now price of $2000. How should you set the minimum offer amount? Please vote in the poll above, sharing what minimum offer you would typically use on this $2000 domain name. Would you set it to the minimum the system allows, at nearly the full value, or somewhere in between?

    In the comments, please share the factors that influence your choice of minimum offer amount. For example, if the name is in a trending niche, would that influence your choice? Does the sector make a difference? Would you be more apt to price a cryptocurrency domain name nearer the buy-it-now, while a name for a budget shop might start lower?


    Minimum Offer Is Not The Same As Auction Start

    I want to stress that the minimum offer in a buy-it-now domain listing is not the same thing as the initial offer in a domain auction. In the mind of the buyer, these are two very different types of sales. In an auction, we expect to be able to start at a relatively low price, and, as other bidders participate, the final price will go much higher. Auction theory shows that how much we are willing to bid is influenced by what we see others bid, whereas in a buy-it-now situation that information is absent for the potential buyer.

    Imagine a piece of artwork is available for sale. In an auction, I might start with a $100 bid, fully expecting the final value might be $25,000. However, if I walk into an art gallery, and a sales agent shows me a piece of art and says “Make us an offer. We are considering any offers of $100 or up.”I then offer, say $200, and the agent immediately responds that the price is $50,000. I would feel misled. If the agent then offered me another piece of art, nearer to my budget, I would rightly feel that I was a victim of a bait-and-switch operation.


    What Minimum Offer Would You Set For A $20,000 Domain Name?

    I am interested in how your minimum offer would change for a much higher worth domain name? For example, if the domain name had a buy-it-now price of $20,000, should the minimum go up by about a factor of 10 from what you would set on a $2000 name?

    Please go to this NamePros thread and vote on that question. I hope that you will share in the discussion experiences from your own portfolio. Tell us what factors you take into account in setting the minimum offer for a higher value domain name.

    Did you set higher minimums in the past, but found you got too few offers and had more success using lower minimums? Or, did you find that it worked out better when your minimum offer was set higher, with more negotiations leading to a successful sale?


    What Minimum Offer Strategy Do You Use?

    Next I would like to obtain information on your minimum offer pricing strategy. Do you tend to simply set a constant minimum across domain names of different prices? Alternatively, do you set minimum offer prices that are a certain fraction, such as one-half, of the buy-it-now price? Please share your minimum offer pricing strategy.


    Are Large Numbers Of Low Offers An Indication Of Domain Worth?

    If you set minimum offers quite low, do you consider the number of offers received an indicator of the worth of the domain name? That is, if I had two domain names, one much more valuable than the other, but set the same minimum offer levels, would the more valuable name necessarily get more offers? What about a domain name that, despite a relatively low minimum offer, never had a single offer over multiple years - is it necessarily of low value? Please let us know what you think about significance of number of low offers in this poll.


    On Average How Many Offers Do You Receive For Each Sale?

    If you have 15 sales per year and 30 offers over the same time period, the offers to sale ratio is 2. If you had 150 offers, but the same number of sales, the ratio is 10. Please share your personal ratio of number of offers to number of sales in the poll here. Note that I want you to consider all offers, not just on the domain names that ultimately sold.

    Clearly the answer to this question depends on how you set your minimum offer, where your name is placed for sale, your negotiating style, how firm you are on price and probably other factors, but I am interested in how many offers you typically receive before each closed domain name sale. .


    Low Minimum Offer To Big Sale

    Finally, I hope you will share examples where a low starting offer resulted in a much higher final closed sale. Share specific examples in the discussion, so we can all be inspired by your success! Or did you never get more than a low ratio, which is also valuable information to know. Vote here to share your highest ratio of final sale price to initial offer.

    I hope that this will be the first of many NamePros community research projects where we pool our collective data to inform answers to interesting domain discussions. I am excited to see the poll results, and read your comments.

    Here is a summary of the linked polls.



    Interesting online discussions related to this topic with Edward helped inform this article.
    Thanks in advance to all NamePros members who will participate in the polls and discussions.
     
    Last edited: Nov 18, 2020
    The views expressed on this page by users and staff are their own, not those of NamePros.
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  4. Bob Hawkes

    About The Author — Bob Hawkes

    Domain analyst, writer and informal educator, with particular interests in domain name phrases and non-business uses for domain names. I am a risk averse domain investor who only invests modest amounts in a variety of extensions and niches. Don't hesitate to contact me - I like to help!

    This is Bob Hawkes's 66th blog post on NamePros. View all blog posts

    Home Page:
    https://namesthat.win
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  5. Comments (26)

  6. Paltzar

    Paltzar Hardware.company VIP

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  7. Dotorium

    Dotorium Upgraded Member Gold Account

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    Hi Bob

    thanks for this article, I have parked all my 1000 domains at Dan and other marketplace but as concerns Dan this is my 3 years experience :

    - I have more traffic for Lower BIN prices domain under 500$
    - I have few offers for Domains with High BIN and lower min Price
    - I have a lot of offers for solid Domains without BIN prices just make offer set up
    - I have low offers for Not solid Domains without BIN prices just make offer set up

    so the best strategy for me depends on how solid the domain are, and how also SEO scores of the domain and its history.
     
  8. bmugford

    bmugford www.DataCube.com PRO VIP ICA Member ★★★★★★★★★★

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    I put minimum offers on many domains of $2,000, just to weed out the serious offers.
    Sure, many people think that is the asking price but it sure beats dealing with sub $100 offers.

    I would do it on more domains if I wasn't lazy. There is no sense in collecting terrible offers like beanie babies.

    Brad
     
  9. Bob Hawkes

    Bob Hawkes Top Member NameTalent VIP Gold Account Trusted Blogger

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    Thanks for the really helpful summary @Dotorium Your results seem logical, and it suggests that the question of what is optimum is complex, depending on worth of the domain name, and perhaps also on the factor of whether there is a BIN or not. The latter I did not properly handle in the set of linked polls, but it is reasonable that a name with no BIN would get a different response. Thanks again.
    Bob
     
  10. jiy k

    jiy k Established Member

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    Thank You for this valuable insight
     
  11. topdom

    topdom Top Contributor VIP

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    "Minimum offer" should be an algorithm , not a number.

    -If offer is too low, say , too low, (but report this attempt to the domain owner).
    -If it is low but not very low, say something like, in aftermarket domains usually any price below 300 won't be accepted, and this is not an exception , and again report it to the owner.
    -If the offer is above the "reserve (as minimum price)", say, offers are binding for 3 days, if you agree submit..
     
  12. BradWilson

    BradWilson Upgraded Member Gold Account

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    Wow, a 6-in-1 poll awesome!

    You're sure raising the bar a few notches with this topic. Just be careful, we'll come to expect miracles from you soon :)

    This is a topic which I haven't thought about too much in a very long time so thanks for reminding me of the need to be strategic with it.

    I'll need to ponder on this more to both remember what I did before and to learn all the new methods.

    So again another excellent topic and thanks.
     
    Last edited: Nov 19, 2020
  13. jim h

    jim h Upgraded Member Gold Account

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    $200 to $800
    A very low price makes people think that the goods themselves are not good.
    Interesting article.
    Many thanks.
     
  14. DigitalRoar

    DigitalRoar Investor & Creator VIP

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    I wouldn't price too far away or they will think the domain is not so valuable or that you are desperate to sell if you are willing to let it go for a lot lower than the original asking price.
     
  15. Domain Search

    Domain Search Established Member

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    Very helpful post for selling domain and websites
    Thanks
     
  16. lock

    lock DomainUsed.com VIP

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    Only need to deter the low ball. So over $150 will do that. Although i seen plenty of offers that went no further than 10%.
     
    Last edited: Nov 19, 2020
  17. garptrader

    garptrader Top Contributor VIP ★★★★★★★★★★

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    The vast majority of the general public sees little value in domain names and thus no reason to spend much on one. Ok they may want a specific domain but just like most consumer goods, they are not willing to spend more than $xxx for even that ideal domain. Minimum offers tend to attract offers at or near the minimum. Of course the seller can ask six figures but if you want $100k for a domain name, why waste time interacting with buyers with a $250 domain budget?
     
  18. pb

    pb Top Contributor VIP ★★★★★★★★★★

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    If you're busy and don't want to be bothered, by all means set a high minimum price, preferably at the lowest offer you'd instantly accept. BUT expect some unpaid transactions, because some people will test the minimum offer without the intention of actually paying that much, or just to send you a message (e.g. they will offer 10k with the message attached saying they are willing to pay 1k) - I've seen it first- and second-hand.

    If you have time for domaining, don't set the minimum price at all or set the lowest possible if it's required. In my experience, many 4- and 5-figure sales started with a 1-figure offer :xf.rolleyes: because buyers don't necessarily know the value of domains or just have no idea how to start the negotiations, so they put 1, or 10 or 100 just to make contact. And when they do, you have a chance of working them up to your desired price.
     
    Last edited: Nov 19, 2020
  19. karmaco

    karmaco Top Contributor VIP

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    I set minimum offers closer to what I am willing to sell for. The lower you set the more fake offers, low ballers, non payers you attract imo. I’d rather have qualified buyers than alot of nonsense you get with very low opening offer.
     
  20. FolioTeam

    FolioTeam AMDB.tv VIP

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    I set my make offers closer to my Bin somewhere between 10-30% depending on the name.

    Reason being that negotiating up can be long and tiring. Experienced this when I set minimums of 100-500 for domains I wanted to sell for xxxx. My experience most times was that my end users didn't like offering anything higher than 10 to 20% of the minimum.

    I agree with @pb on the need to set high minimums if you don't have time to do those long negotiations that span months. I like my negotiations short with 2-3 counters at most.
     
    Last edited: Nov 20, 2020
  21. Save Breach

    Save Breach Established Member

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    Depends, like if its an average 4L.com, then I would remain firm ;)

    Cheers
     
    Last edited: Nov 20, 2020
  22. Bob Hawkes

    Bob Hawkes Top Member NameTalent VIP Gold Account Trusted Blogger

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    Just to make sure no confusion about what is being asked, the question is not what price you might sell at, but rather what you would set minimum initial offer anyone could submit.

    Thanks to all who have voted and provided comments!

    I hope we will get some more.

    Bob
     
  23. Ostrados

    Ostrados EpicName.com VIP

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    I usually set minimum offer it at 50% of BIN so that I can get up to 70% to 90% of my target price after negotiation.
    Sometimes I set it to lower when I am not sure about the domain value.
     
    Last edited: Nov 21, 2020
  24. LUP

    LUP Top Contributor VIP

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  25. griff

    griff Top Contributor VIP

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    65% - so $1300. 65% is what GoDaddy sets as the min offer on their GoDaddy auctions via Afternic landers, and I remember Joe Styler mentioning they had done a ton of testing & re-testing & it had the best conversion rate. The amount of data they must have is more than anyone else so I'll stick with that.
     
    Last edited: Nov 21, 2020
  26. WatchDogue

    WatchDogue Top Contributor VIP

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    I like the topic, the opinions provided by you and others and will provide " my offer system " that works okay for me.

    For a 2000. BIN name, 2k it is, no " minimum offer " offered nor really welcomed, just a no nonsense take it or leave it approach.

    Most of my names are BIN at 1500 - 7500. or so at this time and it is around the
    4 - 7500 range I might state " make offer ".

    I would expect to set a maximum 30 % less than BIN as a minimum " make offer " so hypothetically a 6000 BIN would have a 4200 minimum offer ( 6k - 30% = 4200. ).

    You mentioned auctions - I have sold and am currently selling some antique / collectible items on ebay - most of my prices are simple BINs, although for occasional sales motivation and curiosity I have a few
    " or best offer " prices.

    Receive mostly too low offers and have set " accept offer " at 30 % less than the BIN price, a workable price that has generated eventual ebay sales.

    Minimum offers for domain names can be tricky for me in my experiences and so have just a handful at any one time.

    Great topic Bob with some great replies.
     
  27. unmark

    unmark Established Member ★★★★★★★★★★

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    Thanks, Bobb for the post. Useful as always and a very good conversation starter.
    Depending on the domain and the actual BIN price but I have my minimum offers somewhere around 20 - 40% less than the BIN price. Sometimes even 50%, but had to do that only on a couple of occasions.
     
  28. Mytz.com

    Mytz.com Top 4L [email protected] ieie.com CuTu.com NeSu.com KKiK.com VIP Gold Account

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  29. Jurgen Wolf

    Jurgen Wolf Top Contributor VIP ★★★★★★★★★★

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    Since 2020 I set $247.
    And from my experience with mentioned value - initial offers mostly start at $500...
     
    Last edited: Nov 24, 2020 at 6:33 PM
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