Domain Sale to an End User
End user sales, that is sales to people or companies who plan to use the domain name to enhance their businesses, can be the most profitable (and satisfying) domain sales. Since most domain owners monetize their domain names using methods that are financed by advertisers, these advertisers may prefer to outlay a lump sum to acquire the referring domain name rather than paying per click daily. I recently sold a domain name to a company that intends to use it for their corporate website, and I wanted to share how I went about selling it and provide other tips to people who might wish to sell a domain name to an end user.
The first thing I did was a Google search for the term that made up the domain name. While most of the paying advertisers were large companies, I opted to contact several companies who had organic positions in the results page, but were fairly low. In my experience, most companies who have decent rankings (but still lower than top 10) would like to do what they can to improve their rankings, and they have the knowledge to do this. Having a top 5 ranking can boost traffic tremendously, as I have seen with my own websites, and many of these companies need just a bit of an edge to get there.
I figured that most of the small companies I contacted had some good inbound links to achieve the decent ranking, but many of their current domain names were poor. With some redirecting of the old domain to the new one I wanted to sell them, rankings could be lifted due to a more relevant domain name. I didn’t mention this in my pitch, as it isn’t a guarantee that this would happen, but at the very least, customer awareness of the new domain name would be impacted.
The reason I reached out to the SMB audience (small to medium sized businesses) is that there is less hierarchy involved in decision making. Previously, I contacted a fairly large company for the domain name, and the mid-level manager told me the name was fantastic and the price was good, but he would still have to get authorization of the CEO for the expenditure. Well, it’s been over a month and I still haven’t heard back. SMBs tend to make decisions quickly, which is something I like, and there isn’t a whole lot of red tape to cut a check or send a wire.
In my email to the businesses, I told them that I own the domain name for their field, and I wanted to sell it since I don’t have plans to develop the name. I mentioned that I thought the domain name would be perfect for their company, and I listed the sales price. My pitch was quick, as I have found that if you need to extensively explain why a domain name has value, it is very difficult to convince someone to spend the money on it. The company either gets it or doesn’t, and if they don’t get it, their competitor will. Companies that do get it, will end up getting it – if you know what I mean.
I quickly received a response from one SMB and after a short conversation it was a done deal. There was a bit of negotiating on the price, but we worked out a fair deal. I’ve found that it’s easier to negotiate a better price than have to spend more time pitching the name to other people. The fact that my opening price was reasonable was also something of note, as a SMB isn’t usually going to blow through their marketing budget (if they even have one) on a domain name that was pitched to them out of the blue.
There are a few things to keep in mind when contacting end users. Sometimes they don’t like that a person outside of their industry owns a domain name from their industry. Some don’t understand that it is a free market and that you have just as much right to the domain name as anyone else. There really isn’t much of a reason to engage in a pissing contest over this issue. I have never dealt with this although I know of people who have, but if the potential buyer isn’t receptive, there is no reason to continue the conversation.
Also, don’t ever pitch a potential trademark infringing domain name to a company. I’ve seen many UDRP decisions which cite the owner’s contacting the business as a sign of bad faith. Unless you plan to give the domain name to the company for free, do not do this. Do not contact a company’s competitor either. Even acronyms (3 & 4 letter .com names) aren’t immune to UDRP or other legal troubles.
After writing this in my head at the gym this morning, I saw that Rob Sequin also posted a guide to end user sales. I think there are some very good suggestions there, and I urge you to check his site out when you get a chance.
Incidentally, pitching a domain name to an end user is far different than negotiating with an end user who has approached you. When someone approaches you to buy a domain name you may or may not want to sell, you are in the driver’s seat. IMO, someone with experience negotiating end user sales should build a business around their skill. If you receive an inquiry from a potential buyer, the negotiation company would take over for you and would close the deal.