Being Spiteful Cost Me Money | DomainInvesting.com
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Being Spiteful Cost Me Money

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I haven’t shared this story before, but I might as well share it with you. It’s a story about how my being spiteful cost me money. Probably a considerable amount of money. I am not going to share the domain name because I don’t think it’s polite to reveal private negotiations without the other party’s permission.

I saw a solid .com domain name on Sedo in 2011, and I made a $500 offer for the domain name. The domain owner counter offered at around $1,500. I decided to try my luck again and I offered around $700. The owner countered at around $1,000.

Each counter offer brought us closer to an agreeable amount for us both, and figuring that we were getting close, I offered $800 trying to seal the deal. The owner then sent the domain name to a public auction. I was pissed. I went from negotiating in private to having to bid publicly. Out of spite, I decided I wouldn’t participate in the auction. I set a Gmail filter to delete any message from Sedo with the domain name in it. I lost the auction.

The month after the auction, several media outlets reported the acquisition of this domain name. They felt the story was notable for two reasons. First, the acquiring company was fairly new and it already received tens of millions of dollars in funding. Second, most of the articles were of the opinion that the price for the domain name was cheap, since the auction ended at under $5,000.

At the very least, I lost out on many hundreds of dollars, which is the difference between what I could have paid and what they paid. In all likelihood, I lost out on more because I probably would have had a much higher price tag, and that company certainly would have been on my radar screen.

I am not knowledgeable about the industry for which this domain name is related, so valuing it was a bit tricky. Yes, in hindsight, it’s easy to say that the purchase price was a great deal when a leading company bought the name. However, at the time of the bidding, I didn’t know what an end user would value it at.

The fact that I was spiteful cost me money here. Luckily, sort of, an end user bought the domain name on the cheap, so my “realized” loss was fairly limited. Had it been flipped for a huge profit, I would really be kicking myself!


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (26)

    Mike

    I would not beat myself up too much!! Luckily it was only a couple hundreds and not thousands .
    I have thrown out offers on some decent names , Not so much for resale but my own use and they have gone way over what I thought anyone would Pay.

    I Always Hope … For better luck the Next Time.

    May 3rd, 2013 at 6:37 pm

    Domenclature.com

    Interesting anecdote! It could have gone either way. I wouldn’t worry too much about it. Although it’s easier said than done. I wouldn’t call what you did spiteful either. Perhaps not savvy, but not spiteful.

    I wish you could share the domain name, but I, reluctantly, accept your reason.

    Like you stated, one unknown for you at the time was the “fairly new company” that received millions in funding, and that factor makes a difference.

    I believe things like that happen a lot at Sedo platform. I have a similar thing happen to me in 2010 at Sedo. I will tell you the domain name. It’s SugarCane.co

    Not a very premium name, but the buyer had an exact Match name for it, from the UK. They are called SugarCane & Co. When they made their offer, I had no way of knowing who it was, but it was such a low ball offer that I sent it to auction; besides, it wasn’t a dot com. So it sold for cheap. After the transfer, I realized that they could afford to pay a fair price for the domain.

    May 4th, 2013 at 11:55 am

    BullS

    That the main reason why I take this BS Domaining as fun and games- no stress.

    Bill Gates, Steve Jobs, Hewlett, Mark Sukerberg– they never thought of making money or being rich, they want to make good products so ppl can use.
    The money comes later.

    I never thought that I wanted to be a millionaire when I come to this Great country, I just want to live my dreams.
    Just by putting money in the stocks since 2010, my portfolio has gone up 40%!

    Life is good, no stress-no worries-don’t think too much, just feel!

    May 4th, 2013 at 12:15 pm

    domains

    Elliot

    This is something new for any of us? Don’t mean to burst your bubble but we all done this one way or the other.

    Should have. Would have. That simple.

    I wouldn’t burst into all this too much. The domain industry treated u very well.

    Does Barry Bounds need to bat 1000 to have success?

    All noise bud. Yes it sucks.

    Sedo is also a sinking ship. They got one broker. That’s it. More opportunity today then rely on sedo.

    May 4th, 2013 at 12:41 pm

      Elliot Silver

      I share a lot of success stories, and I wanted to share something that shows I’m not infallible.

      May 4th, 2013 at 12:46 pm

    domains

    Sorry on typos. Away from computer.

    May 4th, 2013 at 12:43 pm

    domains

    Point taken.

    We are only human.

    Land of opportunity for anyone.

    As I said. Should have would have.

    Onto the next name.

    May 4th, 2013 at 12:49 pm

    Dean

    Everyone blogs about their success. It takes a little more courage, insight and honesty to post abut your missteps. Thanks for keeping it “real.”

    May 4th, 2013 at 2:14 pm

    Tony

    What I learned from domaining except it’s getting tougher and tougher to act upon but any how:

    There is always another great deal around the corner.

    May 4th, 2013 at 2:39 pm

    Bernard

    Honestly, I probably would’ve done the same, out of principle.

    Given that they pulled such a move, who’s to say that the other party wouldn’t have pushed it to public auction were you to agree to his/her original sales price anyways???

    Don’t worry, for every domain opportunity that is gone, there will be another to take its place soon enough.

    Keep up the great work Elliot.

    May 4th, 2013 at 4:21 pm

    theo

    So the domain name went to Auction and you did not bid on it .

    You offered 800 and he got a little under 5k.
    You wanted to go for 800, did you want to go for a lil under 5k ??
    If you wanted to get it for 5k, then yes you being spiteful costed you the deal if you would have been able to flip it for more then 5k.

    May 4th, 2013 at 4:47 pm

    Irfan

    At that point of time you were thinking that you did the right thing by making low counter offers and by not participating in the auction.
    You realized that being spiteful cost you only when that domain bought by some good funding company. If that was not the case, you would have not pondered much about it.

    It’s true for domains too that beauty is in the eye of beholder.

    May 5th, 2013 at 1:48 am

    Anthony

    Hello Elliot,

    I would not say you were spiteful about it or even that you made a mistake. Sometimes you draw a line in the sand and it will cost you money, sometimes it will make you money. From the looks of things you are winning the war so the individual battles do not matter.

    But I am sure you know this already. Nice share.

    I have a questions for you and your readers. Can you think of an asset class where the value is so dependent on the individual who walks through the door to buy?

    May 5th, 2013 at 3:07 am

    Anon

    The Sedo “push to auction” function has caused me to completely stop dealing with any names on Sedo.

    They have no exclusivity contracts, there are enough 3rd party escrow services out there that I don’t need them.

    If I want a name, I deal directly with the seller. No chance I waste any time negotiating for a price that turns into an auction.

    Warren Buffett is on record as saying “We don’t do auctions” in regards to businesses he inquires about purchasing when the seller subsequently wants to open the negotiations to public bidding.

    I agree.

    May 5th, 2013 at 2:10 pm

    Sad Sammy

    So, The Man Who Would Be King actually bleeds??? j/k :)

    May 5th, 2013 at 2:25 pm

    DNhow

    It’s really hard when the domain is outside your circle of knowledge.

    The “Send domain to Auction” is one of the dumbest ideas ever. How would you feel if you agreed on a price for a car then the owner asks every guy walking down the street if they can beat “your” price?

    Sedo’s Alexa ranking is falling fast and DailyChanges shows they lose tons of domains every week.

    The market is speaking…

    May 5th, 2013 at 2:49 pm

      Ron

      Takes two parties to agree, obviously the seller never agreed if he sent it to auction.

      The reason it is sent to auction is the seller feels the name is worth more, and they leave it up to the marketplace to decide.

      Being a baby and saying I no longer want to participate is left for the schoolyard, this is business, the seller made the right call, and good on them. If the blogger lost out on the chance, obviously they should have stepped up, and secured the domain, as the seller it is their right to command the most for their asset.

      Domainers are to sensitive, step out from behind the computer, and do an eye to eye negotiation and see how tense they can get, this is not about hurt feelings.

      May 5th, 2013 at 11:56 pm

      Elliot Silver

      If I was too sensitive, I probably wouldn’t have shared this story.

      May 6th, 2013 at 8:00 am

    Wayne

    Hi Elliot,

    You say it was a “solid .com”
    Was it a generic, geo or brandable name?

    Thanks!

    May 5th, 2013 at 7:59 pm

    Constantin Gabor

    Yup… Only by looking in the rear view mirror we can understand the subtleties of the reality. That’s why sometimes we have to act in faith without rationalizing too much.

    But then again, this may have happened because, as you said, you weren’t very knowledgeable about that industry. So you were basically outside your circle of competence – that’s why you’re not to be blamed – it would have happened to most people.

    May 6th, 2013 at 5:07 am

    Laurence Pitcher

    Many sellers at Sedo, send the domain to auction not because they feel the negotiated price is too low, but because they want to see if they can squeeze a higher price out of the market.

    I agree, that is why I seldom use Sedo for domain acquisitions.

    I find it too frustrating to negotiate in good faith for days only to have the domain pushed to auction.

    May 6th, 2013 at 12:48 pm

      Elliot Silver

      I don’t think there’s anything wrong with them doing that.

      As a buyer, I don’t like the fact that this option exists for sellers though.

      I don’t see why Sedo would remove the option though, since it could mean more money for them if a higher price is achieved.

      May 6th, 2013 at 12:50 pm

    nobody

    seems like the seller was very reasonable and good. SO HE DESERVES this bonus!

    May 6th, 2013 at 1:42 pm

    Steve M

    Just goes to demonstrate once again that … the only thing certain about the domain world … is its uncertainty.

    Yet: Uncertainty = Opportunity

    May 6th, 2013 at 6:58 pm

    fizz

    Maybe Anne is also in the auction that closes at namejet tomorrow morning to try to add genetics.info to her firm’s stable of domains. It’s currently at $421 with 110 bidders.

    That’s a very good good lesson to share Elliot: that the push to auction button is a potent option at sedo for a seller – I’ve used it in the past with excellent results.

    May 7th, 2013 at 12:09 am

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