advice True Market Value

[tnp17]

Hello

I am self represented first time domain seller. I have been holding a domain for 5yrs, as a neutral assest, with plans to doing something with it in the future. Until I was approached, through GoDaddy, by a Trademark lawyer threatening UDRP if I didn't sell. I fell for their negotiation tactics and we have agreed on a deal, but nothing has formally been signed.

I am happy with all the terms, but getting cold feet on the price after talking with a friend. My domain is an exact match to the company name and brand, and purchased before they were incorporated. I am in no way guilty of UDRP and would like a true valuation before proceeding. Any recommendations on how to proceed at this time before we sign anything,? do valuations actually take into account the other company's brand, revenue, etc? or do I just swallow the pill and accept the potential 60-80% below market value. Thank you

 

[fka1080405]

There is no such thing as a "True Market Value". A domain is only worth what someone is willing to pay for it. The ideal way to price a domain is according to how much value the domain will deliver for the buyer. The company's brand, valuation, revenue etc. do not dictate the value of the domain to them but they can be informative. For example, if the buyer is a consumer brand that spends millions of dollars each year on advertising their domain name, that would push the price of the domain up a lot. If the buyer is a small consulting firm that does not have a public website then the value would be much less.

You should absolutely back out of any agreement if it is based on the faulty notion that the domain "belongs" to the buyer because it is similar to their trademark unless you specifically registered it to profit off of their name. Do not let a company bully you into selling a domain name to them at a price they dictate.

Without knowing the domain name in question, it is impossible to give specific advice on value. Are you willing to share the domain name here? Domain names can be worth millions of dollars to the right buyer, a price agreed on the basis of avoiding a UDRP complaint would typically be a few thousand dollars, far less than "60-80% below market value".

Keep in mind that if the domain is registered with GoDaddy and the buyer is using GoDaddy's broker service, there doesn't need to be anything signed, GoDaddy will transfer the domain quickly following the agreement. If you intend to back out, you should quickly respond back and make it clear that you are not moving forward with the agreement.

 

[tnp17]

There is no such thing as a "True Market Value". A domain is only worth what someone is willing to pay for it. The ideal way to price a domain is according to how much value the domain will deliver for the buyer. The company's brand, valuation, revenue etc. do not dictate the value of the domain to them but they can be informative. For example, if the buyer is a consumer brand that spends millions of dollars each year on advertising their domain name, that would push the price of the domain up a lot. If the buyer is a small consulting firm that does not have a public website then the value would be much less.

You should absolutely back out of any agreement if it is based on the faulty notion that the domain "belongs" to the buyer because it is similar to their trademark unless you specifically registered it to profit off of their name. Do not let a company bully you into selling a domain name to them at a price they dictate.

Without knowing the domain name in question, it is impossible to give specific advice on value. Are you willing to share the domain name here? Domain names can be worth millions of dollars to the right buyer, a price agreed on the basis of avoiding a UDRP complaint would typically be a few thousand dollars, far less than "60-80% below market value".

Keep in mind that if the domain is registered with GoDaddy and the buyer is using GoDaddy's broker service, there doesn't need to be anything signed, GoDaddy will transfer the domain quickly following the agreement. If you intend to back out, you should quickly respond back and make it clear that you are not moving forward with the agreement.

I’m hesitant to share the name, just with where we are in the process, but can give you some details that may help with evaluation.
I like your point there on how much value the domain delivers for the buyer. The domain will consolidate their brand, it is an exact match to their company name, where they are using a mixed name for domain right now with the limits that comes with.
They have 21k Instagram, has risen almost 2k in last few months without domain, 3k on Facebook and sell a 300 product.
Right now we are settled at a 7500 USD deal.
Not sure if you can get a true assessment from these details, let me know if other info would help. Thanks again

 

[fka1080405]

I’m hesitant to share the name, just with where we are in the process

That's understandable. You are not at any risk by sharing it (since, even if they find this thread, it will not change your negotiating position) but understandable. You could send it to me via Private Message, or we can continue without knowing the name.

Right now we are settled at a 7500 USD deal.

The cost of filing a UDRP complaint is ~$1,500 plus lawyer fees (depending on the company size; whether they self-represent or have legal representation) so $7,500 isn't a terrible offer. Typically, when you're being bullied based on spurious trademark claims, they will be much closer to $1,500 than $7,500.

Right now is a good time to ask yourself: would you be happy with $7,500? Any time you counter, you risk the buyer pulling out. If $7,500 is a meaningful amount of money and you would be sad to lose this sale, you should carefully consider whether you want to push back. Keep in mind, the company may only have $7,500 to spend! The good news is, if this is an exact match for their name, which they've established as their brand, even if you lose the deal today, they may eventually come back.

The biggest mistake novices make is thinking that leaving money on the table is a bad thing. If $7,500 is life changing money for you, it's okay to leave money on the table

Not sure if you can get a true assessment from these details, let me know if other info would help.

The numbers that are most useful are:

1. How much revenue are they generating?
2. What are their margins?
3. How much do they spend on advertising?
4. How many similar businesses are they competing with?
5. How much money has the business raised from investors (if any)?
6. How much money do the founders have?

You'll often need to make educated guesses, and divine the numbers from experience and research. Social media follower counts is a little helpful but doesn't mean much (they could be buying followers, they could be running competitions). A good source of intel is review websites, take a look at what their customers are saying, that can sometimes give you a sense for the business.

 

[tnp17]

That's understandable. You are not at any risk by sharing it (since, even if they find this thread, it will not change your negotiating position) but understandable. You could send it to me via Private Message, or we can continue without knowing the name.



The cost of filing a UDRP complaint is ~$1,500 plus lawyer fees (depending on the company size; whether they self-represent or have legal representation) so $7,500 isn't a terrible offer. Typically, when you're being bullied based on spurious trademark claims, they will be much closer to $1,500 than $7,500.

Right now is a good time to ask yourself: would you be happy with $7,500? Any time you counter, you risk the buyer pulling out. If $7,500 is a meaningful amount of money and you would be sad to lose this sale, you should carefully consider whether you want to push back. Keep in mind, the company may only have $7,500 to spend! The good news is, if this is an exact match for their name, which they've established as their brand, even if you lose the deal today, they may eventually come back.

The biggest mistake novices make is thinking that leaving money on the table is a bad thing. If $7,500 is life changing money for you, it's okay to leave money on the table



The numbers that are most useful are:

1. How much revenue are they generating?
2. What are their margins?
3. How much do they spend on advertising?
4. How many similar businesses are they competing with?
5. How much money has the business raised from investors (if any)?
6. How much money do the founders have?

You'll often need to make educated guesses, and divine the numbers from experience and research. Social media follower counts is a little helpful but doesn't mean much (they could be buying followers, they could be running competitions). A good source of intel is review websites, take a look at what their customers are saying, that can sometimes give you a sense for the business.

1. How much revenue are they generating? AI estimates 300k-800k
2. What are their margins? Approx 20%
3. How much do they spend on advertising? Unsure but they are on Facebook ads
4. How many similar businesses are they competing with? 1 main competitor almost double their price range, maybe 1-2 others in their level
5. How much money has the business raised from investors (if any)? Unsure
6. How much money do the founders have? Looks to be in the process of a 1.6M home sale… assuming they have money

 

[VaibhavA]

If you owned the .com domain name before the company filed for the trademark, then if the company files for a UDRP, it will be considered reverse domain high jacking.

But if you have agreed to a price, its better you go ahead with it.

Is your friend a domainer?

You had 1 domain name, and it sold. Wow, what are the chances.

You should consider buying more with that money and become a regular domain seller!

 

[fka1080405]

1. How much revenue are they generating? AI estimates 300k-800k
2. What are their margins? Approx 20%
3. How much do they spend on advertising? Unsure but they are on Facebook ads
4. How many similar businesses are they competing with? 1 main competitor almost double their price range, maybe 1-2 others in their level
5. How much money has the business raised from investors (if any)? Unsure
6. How much money do the founders have? Looks to be in the process of a 1.6M home sale… assuming they have money

None of that is conclusive but I'd guess they can afford more. So, if you don't mind risk losing the $7,500 deal -- they might be offended that you renege and ask for more -- I'd go back to the broker with something like:

"
After further consideration, I am not happy with the way that this negotiation was handled. I have sought advice about the UDRP process and I am very unhappy that the buyer tried to drive down the price based on a baseless claim that I did not have rights to the domain name.

I am not moving forward with a deal at $7,500. If the buyer would like to make a sincere offer, not based on misleading me about my rights to the domain name, while considering the premium value of the domain, I am happy to hear it.
"

Always keep in mind, a bird in the hand is worth 2 in the bush, but if you like living life a little on the edge, and $7,500 doesn't matter much to you, go for it

 

[URL Stream]

Please note, I’m not weighing in on the valuation angle or whether now is the right time to sell.

That's understandable. You are not at any risk by sharing it (since, even if they find this thread, it will not change your negotiating position) but understandable.

Many people on this forum have already stated the opposite; there is indeed a strong legal risk in publicly sharing any details.

Keep in mind that if the domain is registered with GoDaddy and the buyer is using GoDaddy's broker service, there doesn't need to be anything signed, GoDaddy will transfer the domain quickly following the agreement. If you intend to back out, you should quickly respond back and make it clear that you are not moving forward with the agreement.

Are you by any chance the buyer?

If anything, OP should transfer the name out of GoDaddy so they don’t pull a fast transfer on him.

 

[Dave Broguls]

If you registered the name before it they incorporated then you can probably tell them to kick rocks. If they've trademarked the name, you'll also want to be sure that you registered the domain before they filed for a trademark. If you beat them there then you can definitely tell them to kick rocks. You have an intended use (eventually) and you won the race to it; you're not acting in bad faith. They'll get smoked if they file a UDRP and you push back against them in that setting. What they're trying to do there is something called reverse domain hijacking. If they do file a UDRP then hire an attorney to help push back against it.

If you're getting cold feet on the deal or don't think $7500 is a good number then tell them something like, "I discussed this with an advisor and we need to put this on pause while I do more due diligence on my end of the deal. Their initial take was that $7500 is entirely too low. In fact, he asked me if they forget to include a zero. He also said that any sort of UDRP complaint you'd file is weak at best and that it sounds like you're trying to do something called reverse domain hijacking. If you go ahead with filing complaint, please be advised that I'll seek to recover attorney fees and other damages in court."

By upping the ante (attorney fees) if they file a UDRP it may prevent them from blithely filing a UDRP. The big thing for you is that you don't want to look back in 5–10 years and think, "I shouldn't have let that domain go for $7500."

 

[tnp17]

If you owned the .com domain name before the company filed for the trademark, then if the company files for a UDRP, it will be considered reverse domain high jacking.

But if you have agreed to a price, its better you go ahead with it.

Is your friend a domainer?

You had 1 domain name, and it sold. Wow, what are the chances.

You should consider buying more with that money and become a regular domain seller

Lol He is an established business guy. I’m considering just taking the lumps and moving on a lesson learn in negotiation. I don’t think they have a case in this either, just them playing hard ball and coming out of the gates hot, outplayed me.
I hold a hand full of domains, this is my first sale though. Will definitely consider getting more into this market! Just need to learn the listing side of domains.
NamePros has been a huge help, thank you!

 

[tnp17]

If you registered the name before it they incorporated then you can probably tell them to kick rocks. If they've trademarked the name, you'll also want to be sure that you registered the domain before they filed for a trademark. If you beat them there then you can definitely tell them to kick rocks. You have an intended use (eventually) and you won the race to it; you're not acting in bad faith. They'll get smoked if they file a UDRP and you push back against them in that setting. What they're trying to do there is something called reverse domain hijacking. If they do file a UDRP then hire an attorney to help push back against it.

If you're getting cold feet on the deal or don't think $7500 is a good number then tell them something like, "I discussed this with an advisor and we need to put this on pause while I do more due diligence on my end of the deal. Their initial take was that $7500 is entirely too low. In fact, he asked me if they forget to include a zero. He also said that any sort of UDRP complaint you'd file is weak at best and that it sounds like you're trying to do something called reverse domain hijacking. If you go ahead with filing complaint, please be advised that I'll seek to recover attorney fees and other damages in court."

By upping the ante (attorney fees) if they file a UDRP it may prevent them from blithely filing a UDRP. The big thing for you is that you don't want to look back in 5–10 years and think, "I shouldn't have let that domain go for $7500."

I like this ^
Maybe more important lessons to be learned going through a little battle than just accepting defeat… thank you!

 

[tnp17]

None of that is conclusive but I'd guess they can afford more. So, if you don't mind risk losing the $7,500 deal -- they might be offended that you renege and ask for more -- I'd go back to the broker with something like:

"
After further consideration, I am not happy with the way that this negotiation was handled. I have sought advice about the UDRP process and I am very unhappy that the buyer tried to drive down the price based on a baseless claim that I did not have rights to the domain name.

I am not moving forward with a deal at $7,500. If the buyer would like to make a sincere offer, not based on misleading me about my rights to the domain name, while considering the premium value of the domain, I am happy to hear it.
"

Always keep in mind, a bird in the hand is worth 2 in the bush, but if you like living life a little on the edge, and $7,500 doesn't matter much to you, go for it

Agreed… definitely a decision to be made here. Appreciate your insights. Thank you!

 

[URL Stream]

outplayed me

Not yet.

Does this domain have value on the general market as well, or would you just like this specific company to cough up more money?

 

[tnp17]

Not yet.

Does this domain have value on the general market as well, or would you just like this specific company to cough up more money?

GoDaddy has it priced at 1400, Estibot had it for a few hundred…. pretty much buyer consolidating their brand running up the value.

 

[fka1080405]

Many people on this forum have already stated the opposite; there is indeed a strong legal risk in publicly sharing any details.


Are you by any chance the buyer?

If anything, OP should transfer the name out of GoDaddy so they don’t pull a fast transfer on him.

Registering a domain before the complainant existed is the ultimate defence to any sort of trademark dispute. A lawyer will always advise a client to shut up and say nothing because there is nothing to gain by talking publicly, only something to lose, but that doesn't mean there is "strong legal risk" or indeed any legal risk to speaking publicly if there is no legal issue to answer.

The benefit to speaking publicly for the OP is that they can get much more tailored advice, which allows them to negotiate from a much stronger position. The risk to the OP in sharing the domain name is in weakening their negotiating position, because in theory the buyer could discover this thread and has an insight into what the OP is thinking.

And from the opposite direction, if there was a legal case to answer, being secretive about the domain name doesn't take away the risk of speaking publicly because comments you make publicly (whether disclosing the domain name or not) could be found and used against you. Disclosing the domain makes it more likely they are discovered but it wouldn't be difficult for a lawyer who already knows the details of this negotiation to come to NamePros and find this thread without the domain name being disclosed.

A lawyer would advise: if there is any legal risk to an activity, do not comment publicly, whether anonymous or not, speak only to your legal representation.

 

[URL Stream]

GoDaddy has it priced at 1400, Estibot had it for a few hundred…. pretty much buyer consolidating their brand running up the value.

So why would you not sell it for $7,500?

You lucked out that a company opened with the name you own.

 

[tnp17]

So why would you not sell it for $7,500?

You lucked out that a company opened with the name you own.

True true… that’s why I’m here from some insight and to see if there is a common valuation or way to figure out if I’m accepting a solid offer.
Lots of good points from different angles. Not trying to be greedy, but don’t want to get fleeced either. Lessons learned.
This has been helpful and very much appreciated. Thank you!

 

[biggie]

Hi

too bad you didn’t seek pricing advice beforehand, maybe would saved you the advice you’re getting now

if, this entity is the only potential buyer then your other options may be limited.

if, they do file a udrp, then are you prepared to defend your right to own the name?

personally I don’t believe in appraisal tools but if valuations came in that low, then maybe they might be offering more than it’s worth


imo…

 

[vincew]

I'm a little confused. First you said $7500 was 60-80% below market value then you said "GoDaddy has it priced at 1400, Estibot had it for a few hundred". What's what?

 

[tnp17]

Hi

too bad you didn’t seek pricing advice beforehand, maybe would saved you the advice you’re getting now

if, this entity is the only potential buyer then your other options may be limited.

if, they do file a udrp, then are you prepared to defend your right to own the name?

personally I don’t believe in appraisal tools but if valuations came in that low, then maybe they might be offering more than it’s worth


imo…

Legit, I know about NamePros now!

I would be prepared but was happy with the deal prior to talking to my buddy lol

Like one of the other posts said, always good to take profits when they’re there… thanks again

Looking forward to selling another one!