NameSilo

Why negotiations fail?

Labeled as discuss in General Domain Discussion, started by abstractdomainer, Sep 16, 2021

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  1. abstractdomainer

    abstractdomainer Top Contributor VIP Gold Account

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    I have been reading a lot about negotiations lately especially after our last MOCK NEGOTIATION here at NamePros.
    Here are 2 interesting concepts to think about before quoting a price for an offer on your domain name:

    BATNA - Best Alternative to No Agreement
    aka, What will you do if the negotiations fail? And you need to have a plan for it.
    For example, if you do not accept the $700 offer on your domain name, and the deal doesn't happen,
    1. Are you going to renew the domain name for 3 years @$12 a year?
    2. Are you fairly confident that it is worth $3,000 and willing to wait for 3 years for that price?
    3. Will this domain name take precedence over other renewals?
    4. Is it a good domain name that can be sold via outbound later?
    5. Do you have another offer at hand, negotiating with 2 parties in parallel?
    All these things could be something to consider as your BATNA before you respond to an offer.

    ZOPA - Zone of Possible Agreement
    As a buyer, if the max that you can go is $10,000 and the minimum that the seller can do is $12,000, there is a possible overlap and there may be a deal!
    But if the max a buyer can pay is $8,000 and min that the seller can do is $10,000, there is no possibility of a deal.
    [​IMG]

    So, a good practice after buying a domain name could be to create an Excel and add your minimum price for the domain name that you own. That will clearly define your vision. Of course, this minimum can be revised depending on other sales in your portfolio, trends etc. but having one such number will help you know your minimum for the domain name.

    Since @Soofi and myself didn't have a ZOPA in our prices, the deal didn't happen. And that's alright!

    For those interested in reading further, here is an article you can refer that will help you with negotiations in general:

    https://corporatefinanceinstitute.com/resources/knowledge/deals/what-is-batna/
     
    The views expressed on this page by users and staff are their own, not those of NamePros.
  2. jhm

    jhm Glazed

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    "As a buyer, if the max that you can go is $10,000 and the minimum that the seller can do is $12,000, there is a possible overlap and there may be a deal! But if the max a buyer can pay is $8,000 and min that the seller can do is $10,000, there is no possibility of a deal."

    My little perspective: Meet in the middle, the buyer will raise a grand over the coming months, even if the response is no at first. Chances are, the buyer may have a reflection when it is raised. If the buyer really wants the domain for their "baby" (their business) ...with this understanding and a long term view, he / she will bend. There's a difference between an extra 4 figure sum, than the sum of an extra million

    However, if it was me in the given scenario ...I'd take the $8k assuming I was "in the money" anyway, than being so tight fisted. If I wasn't and my number was never met, even with other prospective buyers offering similar bids ...maybe I'd drop my act and realise possibly I paid the wrong resale price, for the domain in question
     
    Last edited: Sep 16, 2021
  3. abstractdomainer

    abstractdomainer Top Contributor VIP Gold Account

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    Fair point. Here in the example, the difference is small but consider a major difference. The point is to explain that sometimes, not having the deal is alright because of the 2 concepts explained above. If there is no overlap in the pricing, there is hardly anything you could do about it.
     
  4. AEProgram

    AEProgram Top Contributor VIP Blue Account

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    Domain are not a house. If a person is looking for a house in most cases it's not something they want one second and the next they are over it.

    If your buyer just got an idea and started looking for names and found yours, every minute counts. All your creative negotiations will not matter if they no longer like their idea.

    Obviously, if your buyer has a real plan, is a real company that has to buy your name for an upgrade or many other reasons, negotiations matter, but those are the rare cases.

    In negotiations if you are desperate and the buyer is not, it will probably fail. The buyer must want the name more than you want to sell it.
     
  5. biggie

    biggie GreenFriendly.com VIP ★★★★★★★★★★

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    Hi

    you can read a million negotiations, but until or unless you are actually in one...then nothing you read will matter.
    since each name, owner and potential buyer are different, then so will the conversation be, in each negotiation.

    i've asked for more and buyers have walked or changed their minds
    and
    i've accepted offers and buyers have said, "they don't have the money".

    there is no definitive tactic.

    imo....
     
  6. lock

    lock free.marketing VIP

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    One of my first tasks to do when selling new cars years ago was to drop the price by $50 off a new car and sell it. If i had to negotiate again it was with another $50 drop. I then offer seat covers mats etc keep it going. It becomes about perspective some people think they can get thousands off others tend to bargain with chips provided.
     
    Last edited: Sep 22, 2021
  7. The Durfer

    The Durfer Wesley Sweatman VIP

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    yea but domains, you need to know the numbers they bring in. Other than that, there isnt anything extra you can throw in. lol. :)
     
  8. lock

    lock free.marketing VIP

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    The point is you can discount or not and still get a sale. A small gift was a tiny win for customer. A small win might be free hosting or a logo not that i am suggesting that i am only suggesting not discounting. I negotiate sales everyday.
     
    Last edited: Sep 23, 2021
  9. abstractdomainer

    abstractdomainer Top Contributor VIP Gold Account

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    I agree with you Lock! I think such things work sometimes. For example, selling 2 names together - adding the plural of the name to the deal helps.
    For example, VegasGame.com individually may not sell or sell at say, $700. If you add VegasGames.com to it as well, and sell both at $1200, that's $500 for the other domain + a sale which may or may not have taken place otherwise.
    (I just made up VegasGame and the number; the name may be worth much more than that maybe. That's a random number I put in)
     
  10. lock

    lock free.marketing VIP

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    Hold on do some research as these are actually good if you have these examples without numbers.
     
    Last edited: Sep 23, 2021
  11. stub

    stub DNStore.com PRO VIP ★★★★★★★★★★

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    How many of your negotiations prove successful with this "drop $50" mentality. 0% - 100%. and when do you bail on negotiations?
     
    Last edited: Sep 25, 2021
  12. lock

    lock free.marketing VIP

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    It is giving a reaction it isn't ending the negotiation you can still drop price but it is a gauge am sure people will send fake enquiries about domains as talk further about day job.
     
    Last edited: Sep 25, 2021
  13. stub

    stub DNStore.com PRO VIP ★★★★★★★★★★

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    Gotcha! Appreciated.
     

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