Explain the Reach of a Domain Name | DomainInvesting.com

Explain the Reach of a Domain Name

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When negotiating the price of a domain name with a prospective buyer, I occasionally encounter resistance citing the size or reach of the prospect’s business. The buyer can’t afford to spend the asking price for a domain name because his or her company is small or not yet created. This resistance is understandable, but they need to understand why the domain name is more expensive than they can afford.

I am not a huge proponent of educating buyers about the value proposition of a domain name. If they have inquired about a particular domain name, they likely understand why the name has value without having to explain. However, it can be helpful to explain why the domain name is worth its asking price.

Let’s say a local dog walker wants to buy DogWalker.com from my company (it’s developed and not for sale, so this is just an example) for his website. This local dog walking service probably wouldn’t get much of a return if it paid the full value for the domain name. The buyer thinks the domain name is way too expensive for his small business, but he may not understand the potential reach of the domain name to someone with bigger aspirations or a bigger business.

Enlightening a prospective buyer about the potential a domain name has likely won’t get a deal done. I can think of a few examples of people getting a better understanding of why I priced a domain name at a certain level when they didn’t understand my perspective. I can’t really think of any deals that closed as a result. That said, educating someone about the potential of a domain name may help them think bigger, and perhaps their budget will expand as they learn more about the domain name’s potential.

At the end of the day, explaining your position can help keep a negotiation cordial and it may result in a deal. At worse, it is just a bit of a time suck.


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)

    Leonard Britt

    Having seen how much even small companies spend on marketing, professional services, IT costs, travel, etc. I would say that unless you are quoting six figures for a domain name, the issue is less about affordability and more about the way the general public looks at domains. The Godaddy ads of “Get your .COM for $0.99″ promote the mentality that domains are throwaway items like a pencil or sheet of paper. The reality is most businesses will spend thousands of dollars on routine expenditures but until domains are viewed as brands and marketing tools, domain investors will continue to encounter resistance to paying premium prices for a domain.

    March 4th, 2016 at 11:52 am

    Jonathan

    It’s all perception FS would drop a little or say thank you but No, you know what Rick S would say !! Personally the one I find annoying is the “you only just registered it” ? Stands up with the stupid aged domain comments, AI will not consider age, a new brand has nothing to do with age.

    March 4th, 2016 at 12:26 pm

    Eric Lyon

    Sadly, I see many resellers that forget to education a potential buyer and only apply high pressure sales tactics. I think there’s a need for both in most cases (Not all), where a seller must use some form of sales tact while still providing some educational insight so that a buyer understands the true benefits of acquiring such a domain asset.

    Granted, providing too much information can sometimes backfire and shoot a seller in their own foot.

    If more resellers took the time to do all their research on the domain, the target buyer/company, their target market/audience, etc. before trying to make contact, it would make closing deals so much easier.

    March 4th, 2016 at 2:25 pm

    168

    Is it time for the domain industry to update it’s “name”?
    It is pretty clear the public at large still doesn’t understand the geek speak created 30 years ago, “Domain Name”.
    example: The value of a domain that doesn’t have to be “explained” vs one that does.

    March 4th, 2016 at 3:29 pm

      Logan

      In outbound emails, I often use “domain name (web address)” to help the layperson get it.

      In reply to 168 | March 4th, 2016 at 5:23 pm

    George

    Elliot,

    “The buyer can’t afford to spend the asking price for a domain name because his or her company is small or not yet created. This resistance is understandable, but they need to understand why the domain name is more expensive than they can afford.”

    In that case, I offer Leasing to the prospect.

    March 6th, 2016 at 10:30 am

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