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strategy Setting The Minimum Offer Value For A Domain Name

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What minimum offer would you set for a name with a $2000 buy-it-now?

  • This poll is still running and the standings may change.
  • less than $100

    18 
    votes
    5.3%
  • $100 to $200

    50 
    votes
    14.7%
  • $200 to $800

    87 
    votes
    25.5%
  • $800 to $1200

    95 
    votes
    27.9%
  • $1200 to $1600

    51 
    votes
    15.0%
  • $1600 to $2000

    40 
    votes
    11.7%
  • This poll is still running and the standings may change.

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.
We want to sell a domain for $3000, if we put minimum offer $500, then a potential buyer will think that a domain costs $500 and will not want to pay 3000. If we put a high minimum price, this may scare a potential buyer. And if we do not set a minimum price tag, then "buyers" will start spamming with low offers.

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.
 
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The views expressed on this page by users and staff are their own, not those of NamePros.
Multiple prices = Absence of price
I set a single price if I set price.
 
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Our policy across our entire portfolio is to not accept any offer below 80% of our posted BIN price.

Think about it: if you had your home up for sale for $500,000, would you take any offers as low as $350,000 seriously? No, because that's only 70% of your posted price. That's a low ball offer. That's someone trying to feel you out to see how desperate you are as a motivated seller because you need cash.

If we have a $5,000 BIN price posted for one of our domain names, we will only consider submitted offers above 80% of that amount, or $4,000. That's the minimum offer that a buyer needs to make to qualify themselves as a serious buyer. We would then negotiate to as close to the $5,000 posted price as possible because we have no need or desire to sell below our posted BIN price. After all, we use BIN pricing to avoid negotiating in the first place. We are not a motivated seller.

If we received a $4,000 offer by someone going around our BIN landing page, we'd likely counter at $4,750 and hold our ground there regardless of subsequent offers the buyer makes between $4,000 and $4,750. Why? Because another buyer will likely come along in the next two to three years and pay the full $5,000 BIN price without questioning the price at all. It's just a matter of waiting and paying the $20 to $30 holding costs. At our $4,750 counter, we have offered a 5% discount off of our $5,000 BIN price, which is a discount we are willing to give for a serious, qualified buyer when we really don't need or want to give any discount at all. On the $500,000 home, it would be the equivalent of giving a $25,000 discount to sell the home for $475,000 to the buyer. If you have no mortgage on the home, that's $25,000 in equity you are giving up to the buyer. So, 5% is a fairly big discount on your equity in your domain name, especially the bigger ticket ones.
 
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Thanks, bob for the information. I have learned a lot from the poll you created.
 
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For cheaper domains I usually go for half. But the idea is that my intended price is in the mid-point of the minimum offer and the buy-it-now price.

So if I have a domain I want $2,000 for, I will have the minimum offer at $1,000 and the buy-it-now at $3,000.

Of course if it's a more valuable domain, say a domain I want $100,000 for, I won't set a buy-it-now price, and I'll set the minimum offer at $20,000 to gauge interest, and then start with a counter-offer at $200,000.
 
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