Don't Tell a Domain Owner Your Plans for a Domain Name | DomainInvesting.com

Don’t Tell a Domain Owner Your Plans for a Domain Name

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One question I frequently receive after making an inquiry on a domain name is “what do you plan to do with the domain name if we reach a deal?”

People are curious about whether I am going to re-sell the domain name or perhaps turn it into the next Google or Facebook. Some are probably a bit hesitant to sell a domain name they’ve owned for 10 years when that name could become the next billion dollar brand or be re-sold for 10x the sales price. When you think about it, the reasoning isn’t really all that sound, but it’s human nature.

Although I won’t lie to someone during a negotiation, I generally won’t give away my plans for it either. I may be very vague about my intentions or say that I haven’t figured out my plans yet, but I won’t get into details about them.

You don’t want to give them an idea about what they can do with the domain name if they choose not to sell it, nor do you want to give them any leverage in the negotiation if they know that their domain name is your only choice for what you want to do. It will generally cost you more to acquire it if you give too much information away.

Additionally, when I plan to re-sell the domain name, I don’t mention that either. Inevitably, the person will ask me to broker it and split the proceeds. I have no interest in brokering domain names.

If they’ve seen my blog (many people search for my name and arrive here), they know I buy and sell domain names so they assume I am doing that with their domain name, which may be true. The way I explain it to them is that I am only interested in taking on 100% of the risk for 100% of the reward. If they want to keep doing what they’ve been doing and hope someone comes around with a better offer, they are welcome to do so. Alternatively, I am able to pay all cash up front right away to buy their domain name.

Some people don’t like this and won’t sell their domain names knowing they are going to be re-sold. The majority of people look at the offer as likely the best they’ve received, and they happily accept, not worrying if they’re leaving anything on the table.


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 (8)

    Tony

    Great advice.

    On the flipside, Rick Schwartz advises to ask as many questions as you can about the potential buyer in order to gain negotiation leverage.

    It’s a monetary chess game.

    December 21st, 2011 at 2:14 pm

    Abdu

    Nice post Elliot. I’m assuming you use your real name and email when you go out to buy domain names. If so, do you think that would result in price increase on the names you shopping around for?

    December 21st, 2011 at 2:41 pm

    Elliot Silver

    @ Abdu

    I do, and I use my Gmail email address. I offer to provide references if the seller asks.

    Perhaps the price increases, but if it’s more than I think it’s worth for me to make a good deal, I won’t buy it.

    December 21st, 2011 at 3:18 pm

    Louise

    The nerve of people asking you for your ideas! Ideas are intellectual property! That’s why the big names are always in the news defendingtheir trademarks, because little beginnings can have big rewards, and an idea is a fragile, yet defining, thing!

    December 21st, 2011 at 3:23 pm

    theo

    I usually ask what they plan todo with the domain name if i get one of those :”is the domain for sale and how much ?” emails.

    I don’t like to name a price and usually the response gives me more info to act on.

    December 21st, 2011 at 3:26 pm

    Rob Sequin

    Good post.

    True value of any domain is the meeting point of the motivation of the buyer with the motivation of the seller.

    Alan Hack summed it up for me by using the word “vision”. He likes to ask about the buyer’s “vision” for the domain.

    If your vision for the domain is a personal blog, then your maximum budget will be limited.

    If your vision for the domain is to be the next IPO and you have VC backing then you are going to have to pay up (unless the buyer is willing to give in at a much lower price).

    So, the less you can say about your vision, the better your chances of buying the right domain.

    However, this is comment is for SELLERS, do be too selfish and overprice your domain. I’ve seen many great offers get rejected because the seller was too selfish in his pricing.

    Usually there are not multiple qualified and motivated buyers for one domain so TAKE the money :-)

    December 21st, 2011 at 4:26 pm

    Timm

    This is smart policy. Honestly, it’s none of the seller’s business what you plan to do with his domain. When you go to WalMart, the checkout clerk doesn’t ask you what you plan to do with the TV you’re buying.

    Of course, you don’t want to be rude if the seller asks, so your suggestion is good: be vague or say you haven’t figured it out yet.

    Regarding people buying my domains to resell them: I have absolutely no problem with that. If they meet my asking price, but can turn around and double their money, then good for them. That’s the way the capitalist marketplace is supposed to work.

    Good article.

    December 21st, 2011 at 11:59 pm

    Steve Trang

    Dan Ariely explains really well in Predictably Irrational about why sellers overprice and buyers underprice in negotiations.
    I forgot to bid on an expiring geo real estate domain, and when I followed up with the winner, the person said that there was no price that they would sell it. Then by that logic, he should have been willing to pay 1000s or more to the previous owner before possibly losing it when it expired. Maybe he would have, but I doubt it.

    December 22nd, 2011 at 1:12 am

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