Opening Offer is Important | DomainInvesting.com
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Opening Offer is Important

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The vast majority of opening offers I receive to buy my domain names are very low. I would guesstimate the average opening offer is well under $1,000, with the majority probably being around $100. Frankly, it’s a bit disheartening and frustrating to receive a $100 offer for a domain name I bought for $xx,xxx.

On the rare occasion that I do receive a decent offer for a domain name, I get excited because I know the prospective buyer has at least done some homework. We might not end up reaching an agreement, but at least the opening offer doesn’t make the prospect look unqualified and uneducated. I try to respond to all inquiries, but I am much more inclined to ignore an uneducated offer than deal with someone who clearly doesn’t have any idea about domain name values.

When I am on the other side of the negotiating table, I take my experience with lowball offers into consideration. As a sign of my seriousness and my knowledge of domain name values, I like to present an offer that I think is reasonable. It may or may not be the best offer I am willing to make, but it should be enough to elicit a response, at the very least. Sometimes the domain owner thinks my offer is low, but it is certainly better than the majority of other offers, if the owner sees the same types of inquiries that I see.

When I make an opening offer to buy a domain name, I try to put myself in the position of the seller. If I am looking to buy a particular domain name, I can assume the name has had interest and offers in the past. I know there must be a reason why the owner has passed on those acquisition attempts, and money is probably a main issue. Perhaps the domain name was not for sale, but everything has a price regardless of the disinterest in selling. With a reasonable offer, I should at least get the courtesy of a reply, even if it’s not close to what the seller wants to part with a domain name.

Obviously, an issue for many people is determining what constitutes a reasonable offer. Unfortunately, that’s not something I can help determine. The specific domain name, current market conditions, comparables, development and current rankings, and the prospective buyer’s risk tolerance all play a role in making a reasonable offer for a domain name.

There are many factors that determine the value of a domain name, and “reasonable” is different for everyone. A prospective buyer should put themselves in the position of the domain owner, and they should make a reasonable opening offer if they want to have a chance to buy a domain name. I think the opening offer is very important.


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 (25)

    Leonard Britt

    It seems like the only offers coming in of late are low $XXX. However, I see another disturbing trend – $0 offers where they are just inquiring about the domain. My thought based on prior experience is these are likely to be a waste of time. Just curious how you would respond to a “I am interested in your domain for a project.”

    January 5th, 2015 at 1:51 pm

      John

      Offers I get for a while now are mid $x, x x x and $x x, x x x for .US.

      In reply to Leonard Britt | January 6th, 2015 at 2:49 pm

    Nuno

    “Frankly, it’s a bit disheartening and frustrating to receive a $100 offer for a domain name I bought for $xx,xxx”

    And even when you explain it’s value, and that you have received offers 10x or 50x theirs, they still say we are overpricing or it’s too expensive. I get that several times a week.

    January 5th, 2015 at 1:57 pm

      John

      People who are not yet “in the know” really do need to be educated about the truth regarding values. And on that note Aron M. and Heritage Auctions are to be commended for their part in doing that if that has been part of what they are doing, by the way. It’s true, no matter how rich the person is, they may not have any clue. You can be talking to a very wealthy person and they might think a domain name should only be worth at most around $50. Have definitely had that conversation with one such person before, while another such person was willing to say $100 or so.

      In reply to Nuno | January 6th, 2015 at 2:54 pm

    Nuno

    Leonard, I paste:
    “Please send your best offer, we don’t negotiate below a certain value.”
    Couldn’t do otherwise as I receive hundreds of offers, most are time wasters.

    January 5th, 2015 at 2:00 pm

    Ron

    Hey Nuno, I know you got a big portfolio, and that is part of the numbers game. We all want the best, for the least amount, and some try just that much harder to get something for nothing. I think all you can do is be polite, most likely the deal was never meant to be, about 10% of the time they do come back with a solid working range at times, least it is an option.

    It is getting very costly to replace good inventory, more aware investors in the marketplace, so I think it is important to get the right dollar amount for your domains.

    January 5th, 2015 at 2:09 pm

    Dayne

    I always respond to offers. When receiving low ball offers low XX-XXX, I usually just counter pretty high. I’ve had several instances where they’ve just said “oh that is a bit high” and stated their max in response (X,XXX).

    On the other hand, when I am making an offer, if the owner seems to be knowledgeable, I usually come in at 1/3 – 1/2 my max anticipating there to be a counter.

    January 5th, 2015 at 2:14 pm

    Nuno

    For years I spoke with each person, spending a lot of time trying to educate them and finishing some good deals.
    The problem is that after a while I started receiving dozens of inquiries a day and some never replied back. I get people offering me $10, some won’t even budge. I have severe carpal tunnel syndrome so now unless they show real interest I no longer spend much time. I cannot.

    January 5th, 2015 at 2:21 pm

    rob sequin

    The worst offer I get is “How much do you want for the domain?”

    I tell them to send a serious offer. All else will be ignored. Still people then reply and ask me what do I consider to be a serious offer.

    I ignore a lot of people. :-)

    January 5th, 2015 at 3:31 pm

    Jay

    Generally true but over the last 11-12 years of selling domains occasionally I’ll get a super low offer on the initial bid and it does happen to materialize. Had one come in at $50 and thought about not responding, shot back $7500 and sold so occasionally they do pan out. Was a $8 pick up I held for 2 years so basically $7483.06 profit.

    January 5th, 2015 at 5:55 pm

    Raymond

    I got offered $3….I shot back $25,000
    He ran……

    January 5th, 2015 at 10:25 pm

    Acro

    The idea is to convert low offers to acceptably high sales. Many buyers can afford to pay thousands of dollars, but unless *you* set the asking price, you’ll get the low offers they are putting on the table. The method and pace of negotiation determines the sale amount; you can offer incentives such as a payment plan, or a discount based on closing the same week etc.

    January 5th, 2015 at 11:02 pm

      Jill

      How does one offer a payment plan? Does the seller keep control of the domain in her account as payments are made? If so, then how does the buyer work with the domain name in order to bring their site live? I would think it would involve a lot of legwork on the seller’s side to be available to make whatever changes the buyer needs. Or am I over-complicating this?

      In reply to Acro | January 8th, 2015 at 11:12 am

      Elliot Silver

      I have used Escrow.com for these types of deals. They hold the domain name to protect buyer and seller.

      January 8th, 2015 at 11:14 am

      Jill

      I went over and saw that after you posted this. Thank you!

      In reply to Elliot Silver | January 8th, 2015 at 1:04 pm

    Nuno

    Exactly, but there is a not so recent trend where other domainers, or even spammers, initially contact you and never reply back.
    I received dozens of females from the same person, even if he rotates emails.
    Unless the person sends me a follow-up to my first email, I usually ignore. I have other things to think about and it seems there is no big interest after all from their part.

    January 6th, 2015 at 3:52 am

    ED

    It’s called “anchoring”. The first price named becomes the anchor. To a prospective buyer, it makes sense to set the anchor low. You then negotiate up or down from the anchor point.

    Then again, some people simply don’t know any better and offer pocket change because they have no idea of the genuine value, or no money, or both.

    January 6th, 2015 at 1:21 pm

    Lloyd

    Very easy solution to this problem which is of your doing.Assuming you are advertising your domain name for sale post your asking price.That will significantly cut back on tire kickers and time wasters.Requiring a possible buyer to make a blind offer is ass backwards.

    January 6th, 2015 at 2:07 pm

    John

    The one thing I guess I like the least is when you counter with a price and the potential buyer is unwilling to counter with anything after or even try to negotiate. It seems they often assume that just because you express an ask there is no point in making even a single attempt at further negotiation, or even throwing out their best in the hope of reaching some agreement. For example, I might throw out a genuine ask of $50,000 because I genuinely think it’s well worth it, but I may really be willing to consider if they throw back $20,000 if it’s a domain I don’t have much interest in keeping and doubt would be getting the kind of $50,000 offer I think it’s really worth any time soon. Elliot has also spoken about this issue before as well, being willing to accept something less than you would really want in such circumstances vs. waiting for what may never materialize.

    January 6th, 2015 at 3:03 pm

      John

      If it’s me as the buyer, I’m still going to try and still going to counter…

      In reply to John | January 6th, 2015 at 3:03 pm

      Jill

      I think that it just underscores the very poor communications skills of people, when given technology such as email, texting, telephones, these days.

      I always ask myself, “would I just turn around and walk away mid-sentence, in person? Or, would I hang up the telephone if I didnt like the counter-offer?” No, of course I wouldnt and I dont THINK that these people would behave that way in person or even on the telephone. But give them email, give them text-messaging/chat, give them a voice-mail and they turn into very cold people.

      If I had a dollar for ever offer I received, where I replied back, in detail no less, my counter-offer in a nice professional response, backed with data, and got nothing back ever again — I’d not need to sell anymore domains. Add to that the numbers of people who have made offers that I have accepted, only to never be heard again – just like @Domainator speaks of.

      Its a cold world a lot of the time.

      In reply to John | January 8th, 2015 at 1:37 pm

      Jill

      Oh, more more thing…. With regard to non-paying buyers, they should be outed in a name and shame website. I see that Rick Schwartz does it but its more over the reverse-hijacking / UDRP name and shame..

      I am talking about the buyers who actually agree to a price wherever (Sedo, Afternic, GoDaddy, privately) and the various services begin the process to accept payment but the buyer never responds (I call them deadbeats). Their names, addresses, phone numbers, and email address should be made public for others to see and avoid doing business with.

      It sort of goes back to what I was saying, above. If they would have emailed and said they got cold feet, thought about it again, slept on it and decided no… I might be upset but what can I do? But to never hear from them again – thats BS. Especially since no one has a gun to their heads forcing them to click BUY or worse, negotiate to a price and then never show up for closing.

      In reply to Jill | January 8th, 2015 at 2:03 pm

      John

      I really get the sense that people are just far too timid about trying to “haggle” and negotiate a bit rather than a communication skill issue for this. They give up far too easily and quickly without at least saying something. But you make a great point about the different modes of personal vs. remote/electronic.

      In reply to Jill | January 8th, 2015 at 2:12 pm

    Domainator

    How about getting decent offers, that I accept, through the likes of the former Aftermarket etc, then the buyer disappears never to be heard from again…. there are some game players on that end also…

    January 6th, 2015 at 8:09 pm

      Jill

      There needs to be an official name and shame website or thread on every domaining forum. People would not behave that way with physical real estate lest they get charged with hefty fees.

      In reply to Domainator | January 8th, 2015 at 3:34 pm

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