discuss Stealth Acquisitions from a Seller's Perspective

[DN Playbook]

Hi there everyone,

Curious about your take on stealth domain acquisitions. Have you been approached by a broker to purchase one of your domains for their client? Stealth acquisitions via a broker presents an interesting conundrum to sellers because you don't know who the buyer is.

Years ago, I remember being approached by a broker. They messaged me via LinkedIn with an offer for a domain in the mid X,XXX range. After checking offer history and sales of similar domains, agreed to sell at that price. Hard to resist that kind of an offer when you need cashflow. However, later I found out the client was a fortune 500 pharma company.

Whenever you are approached by a broker doing a stealth acquisition for a client, should it be an automatic presumption that the buyer has deep pockets?

What do you think?

 

[Hypersot]

I think that we -as sellers- should get a better education of the value of our domains, sell them at that price and not wait for the buyers to dictate their price to us.
That way we will be unaffected by any kind of stealth approach.

Personally, I have a clear number in my mind and I move around that number... no matter who it is on the other end of the line.

jmo

 

[elmoney]

These rich companies are very greedy. A few month ago i got an offer from one billionaire company, for my LLL.co, their max budget was only $500...

 

[DN Playbook]

I think that we -as sellers- should get a better education of the value of our domains, sell them at that price and not wait for the buyers to dictate their price to us.
That way we will be unaffected by any kind of stealth approach.

Personally, I have a clear number in my mind and I move around that number... no matter who it is on the other end of the line.

jmo

Good point. Certain categories of domains are easier to price than others, such as 2 or 3 letter/char, dictionary word, coms, etc. They have the most competition. Other domains have one or few perfect matches, that is, buyers with high level of interest. And pricing will depend on the end-user market(s) as well as target audiences, which the domain seller may not be aware of all the possibilities. So pricing such domains is correlated with knowledge of the market balanced with cashflow needs of the seller. If you know that the buyer is a fortune 500 company then cashflow becomes much less of a factor in determining the price because you know that the buyer is much less likely to back away due to price.

Many sellers choose not to price their domains, as was the case in my example at the outset. Among the reasons they elect not to price domains are fear of leaving money on the table and scaring away potential buyers.

To price your domains you must have a high level of confidence that you know the markets your domains are ideal for. If you don't price your domains or get an offer below asking price, you need to know who you are dealing with. My feeling is that stealth acquisitions are only used by buyers with deep pockets that want to get a cheap price. I don't see a small business or an entrepreneur using such as service. But I could be wrong.

 

[tomcarl]

Whenever you're contacted via email direct or over the phone and you already have the domain parked for sale somewhere, you can assume you're dealing with a stealth buyer that wants your name specifically.

If their free gmail/yahoo address provides no info online, they likely only made that account to contact you about the domain. If they try to use broken english or act overly naive about domains, those are common tactics they use.

If they want it "just for fun" or "small project", they're likely a serious end user or a domain investor themselves. Someone can't go to a car dealership and say they want the luxury automobile "just for fun" and that'll justify letting it go cheap.

If their email address/name goes back to some random SEO/webdesign guy/company, don't assume its for their own personal project making it worth less, it can be for one of their clients.

Quote a price that you feel its truly worth without being greedy and stick to your guns, they will feel you out by not responding for days, weeks, possibly months, but they will come back with a counter-offer if they are legit and likely buy if you decline.

As mentioned above, just because an end user has a lot of money, doesn't mean they aren't cheap or won't haggle. You can say haggling is a part of being successful with money for some people. I've had a celebrity send somebody to me with a $500 offer on a name and has been eyeing my name for a couple years instead of buying it for $10K, but he will eventually or someone else will.

Tip: Add 2-3 years of renewals to your domains in advance after you get an inquiry and they go MIA, sometimes they'll wait and see if it'll expire.

 

[bobbarato]

Tip: Add 2-3 years of renewals to your domains in advance after you get an inquiry and they go MIA, sometimes they'll wait and see if it'll expire.

I'm not sure which way to interpret this...you figure a with a multi-year reg, the buyer figures "this isn't going to drop soon - got to buy it if we want it..."

 

[sam123]

I've done many stealth acquisitions for companies as a broker. Keep in mind that most brokers will keep their client private by default, it doesn't necessarily mean you're dealing with a Fortune 500, or a buyer with deep pockets. I've done private acquisitions on budgets as low as $5k.

I've been thinking of writing up a post on this subject recently, as a lot of us are overplaying our hand and losing out on great deals. It pains me to see it happen, especially when I get an email 6 months later asking if the deal is still on the table. It usually isn't, the buyer went with another domain, they've spent the budget elsewhere etc.

If a broker comes knocking, work with them, don't treat them as an adversary. We don't get paid unless a deal is completed, so we'll do everything to make buyer and seller expectations align. Saving the client money is always secondary to getting the deal done, they can make back money but they might not get another shot at owning the domain.

Acquiring domain name > Clients budget

 

[DN Playbook]

I've done many stealth acquisitions for companies as a broker. Keep in mind that most brokers will keep their client private by default, it doesn't necessarily mean you're dealing with a Fortune 500, or a buyer with deep pockets. I've done private acquisitions on budgets as low as $5k.

I've been thinking of writing up a post on this subject recently, as a lot of us are overplaying our hand and losing out on great deals. It pains me to see it happen, especially when I get an email 6 months later asking if the deal is still on the table. It usually isn't, the buyer went with another domain, they've spent the budget elsewhere etc.

If a broker comes knocking, work with them, don't treat them as an adversary. We don't get paid unless a deal is completed, so we'll do everything to make buyer and seller expectations align. Saving the client money is always secondary to getting the deal done, they can make back money but they might not get another shot at owning the domain.

Acquiring domain name > Clients budget

Thanks for that valuable insight, sam123. I certainly would never suggest treating anyone that inquires about your domains as an adversary. We're in the domain business, and business is business, but many are treating it like a hobby or a club (but I diverse). The point is, we need to treat everyone with the utmost professionalism and even if a deal is not to be made we should part ways in a congenial manner. I firmly believe that.

In my experience, domain brokers that do this for a living are some of the most professional people to deal with because they know the industry and will not come with a first offer that is insulting to the seller. They also will not create fake email accounts and fake stories to coax the seller.

And I agree that much too often domainers price themselves out of the market. That's why it is so important to know the market for your domains and what companies would be the right fit for them when it comes to pricing or responding to offers. We will make mistakes, whether that is overpricing or leaving money on the table. But hopefully mistakes will turn into valuable lessons.