Do Your Homework Before Making an Offer
When I am interested in buying a particular domain name, I often do research to learn about the history of the domain name. Using insight I can glean from public and private sources, I may be able to learn something that will guide my offer. When I make an offer, I want to be reasonable, but I also don’t want to look uninformed.
There are several things I look for prior to making an offer, and I’d like to share quite a few of those below. Sometimes, I will do more or less research as my research dictates. I have also provided a bit of color for each of the things I look at to try and make it more clear about why I do this and what it could mean to me:
Previous public sale prices – A domain owner will probably want at least what he or she paid for the domain name. In addition, a recent sale likely means the owner has plans for the domain name.
Previous sale listing(s) – If someone was asking $100k for a domain name, it is highly unlikely they will be motivated to sell for a $5,000 offer.
Broker commitment – If a domain owner is currently engaged with a broker, they may have to pay a commission even if the domain name isn’t sold via the broker. In addition, the broker may be able to provide more information about the seller’s level of motivation and price flexibility.
Previous auction results – If a domain name was listed for sale on Flippa or NameJet and didn’t meet the reserve price, it would be good to know what the high bid was before making an offer. Some venues do not record this information, and keeping records of sales is the job of the domain investor.
Recent sales data and comps – Perhaps a recent comparable sale will help me negotiate a better price or corroborate my offer if I am asked for justification.
Current ownership – If a large company owns the domain name, I might not bother inquiring unless I have a serious interest. If I know the current owner, I might also know more about their domain sales and pricing.
Usage – I look to see how the domain name is being used to determine if it is a worthwhile acquisition target. A domain name that has what looks like a steady business will probably be more difficult to acquire than a landing page with a “for sale” notice.
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