Think Twice About Not Accepting First Offer | DomainInvesting.com
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Think Twice About Not Accepting First Offer

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I’ve read about how some of the wisest domain investors negotiate huge domain sales, and this is not one of those stories. This is a lesson to domain investors who think a higher offer will always materialize after an opening offer, and hopefully it will make you to think twice when you receive an offer.

At the end of 2011, I received a $5,000 opening offer for a one word, aged .com domain name I had recently acquired at auction for under $100. I did some research on the name and buyer and we sent a few emails back and forth, with me asking him to submit his best offer, assuming his $5,000 offer was just an opening offer.

When I didn’t hear back within a day or two (previous emails were fairly quick), I offered it to him for around $10,000, figuring I would either sell it for $10k, or at the very least, the $5,000 offer.

I didn’t hear back from him for a few weeks and sent a follow up email. Unfortunately, he opted to buy a different domain name.

Although you often hear stories about huge offers materializing from smaller offers, this is a case where the opposite is true. I turned down a solid offer with the hopes of making more, and it didn’t work out.

2011 was one of my best years in terms of domain sales and income, and the offer came in right at the end, so I gambled on it. I think it’s important for you to see how easy it can be to lose a $5,000 sale when you want to be a little bit greedy. It was a lesson learned, and I hope you, too, can learn from my experience.


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 (34)

    raman

    Same happened with me when someone offered me $3500 for hand registered domain. I demanded for $5000 after having offer of $3.5k.

    January 16th, 2012 at 1:24 pm

    Elliot Silver

    Things may have been a bit different had the offer come in at the start of the year when my annual income begins at $0. That really shouldn’t have an impact on my business, but perhaps I would have been more quick to take the offer.

    January 16th, 2012 at 1:27 pm

    @Domains

    Negotiation is such an Art. If you always take the first offer you will make more sales, if you always ask for more you will make fewer sales but more $$$ per sale. Who knows, you might get that $5,000 back by asking more on the next domain offer that comes in.

    January 16th, 2012 at 1:40 pm

    John

    To be honest with you Eliot you was simply greedy.

    January 16th, 2012 at 1:41 pm

      Elliot Silver

      @ John

      Yes, I was greedy, because I could afford to be greedy. You won’t sell a name for $25,000 if you take the opening $5,000 offer. That said, had I needed the $5,000 for other expenses, it would have been a very bad mistake. Luckily, I didn’t and it serves as a learning experience for us all.

      On the other hand, of course, had I taken the first offer for BikeTours.com and BikeTour.com, I would have made considerably less money than I ended up making.

      You don’t generally read stories like these in the domain space, and I think it’s a good lesson to be learned, albeit at my own expense.

      January 16th, 2012 at 1:54 pm

    Elliot Silver

    @ Domains

    It’s quite possible, but who knows. Chalk it up to a learning experience that if an initial offer comes in, and it’s one that under normal circumstances I’d be happy to take, I will think twice about it.

    The other side is that had I immediately accepted it, the offerer could have thought he made too high of an offer and then said he was also considering another domain name.

    There are many moving parts with all negotiations.

    January 16th, 2012 at 1:43 pm

    Tony

    Nice cautionary tale.

    Each offer/transaction is its own separate entity with unique circumstances so you can’t really draw any conclusions for the next time.

    January 16th, 2012 at 1:56 pm

    Joe

    Unfortunately sometimes greed sets in and we think someone will pay more for a domain, even though the offer isn’t that bad. It happens to everyone. The basic rule is analyzing the pool of possible buyers: if we’re considering a large and crowded market, being greedy won’t hurt that much (in fact it may even pay off), but if the niche is quite limited the “take the money and run” approach seems to be the way to go.

    January 16th, 2012 at 1:59 pm

    gary dell

    I dont necessarily think you were greedy. You were simply holding out or a better price. I am willing to bet you get another offer on the domain this year – possibly even from the same person. I turned down an offer $1,100 offer for a domain in 2009 and sold down the domain name to the same person at the beginning of this year for $3500. In addition, you probably know more about the industry involving the domain name now then you did then. Your increase in knowledge makes you “more dangerous” with the domain thus making it even more valuable.

    January 16th, 2012 at 2:24 pm

    Larry

    If you don’t offer any pushback on an offer and immediately accept many buyers will feel they overpaid. So pushback is usually necessary.

    And further what you had is an offer. There is no guarantee that a deal would have actually closed at $5000 or that the buyer wouldn’t have pulled out.

    Also whatever strategy you choose you will always have cases where the strategy doesn’t work on every deal. What you hope is that the strategy pays off in the majority of deals and of course you will loose out.

    That’s why I have a policy of not discussing any on ongoing deals with the “peanut gallery” to get their opinion (wife, girlfriend, father etc.) I don’t want to alter an approach that I feel, in general, has worked for me the majority of the times.

    January 16th, 2012 at 3:04 pm

    Elliot Silver

    @ Larry

    Good points. I like asking my wife if I should take $10k or whatever on a name and then telling her, thanks, I took $25k instead :)

    January 16th, 2012 at 3:05 pm

    Jason Davis

    Sometimes, if you are in the gambling mood, you can explain how you think the name is worth more and you can settle on the minimum and put the domain name to auction at that price with a commitment from the buyer that they will make a bid of the agreed upon price. This way, you get to market the fact that the domain name is at auction. This might not be so smart but it kind of makes sense to me with certain names. I did this a few days back on flippa with the domain name BookSeats.com Flippa takes 5% of the sale plus some low upfront fee to activate it on auction. This way you have time to market the name to see about getting more for it and if not, it sells. The buyer knows they are also rolling the dice because it may go for higher and this way they have the opportunity to bid more if they want. I have 4 days left to generate some more interest in the name if I can.

    January 16th, 2012 at 4:12 pm

    Gnanes

    It all depends on how well the seller is financially. That was a pretty good for a name you thought was ok.

    January 16th, 2012 at 4:43 pm

    gdell

    I want to add this. At the time the potential suitor declined on my price offer, he told me that he had found a different domain name to use. He used it but still came back to me at my offer – of course it was a few years later. After two years of using the domain he “decided to use instead”, he came back and offered me 350% more than his original final price.

    January 16th, 2012 at 5:31 pm

    Larry

    Elliott – My wife is on to that one! So what I normally do is pull out emails from an envelope with the deal play by play when we are out at dinner. The last time was for a nice size deal but when I went to the men’s room she had opened up the envelope and totally killed my surprise.

    January 16th, 2012 at 5:37 pm

    rob sequin

    Great post.

    gdell makes a good point. Buyer might come back for many reasons.

    Maybe put it up for buy it now price of $10k and forward to the buy it now page.

    He might be back or probably worth that much to another buyer.

    January 16th, 2012 at 5:46 pm

    Jim Holleran

    I just sold a .tv for $16,000 and accepted it, in escrow right now.

    Also, just got a low 6 figure offer and turn it down, and counter with a mid 6 figure offer. See what happens?

    My strategy is try to get “singles” throughout the year, and try to get 1 homerun throughout the year. Everybody is different, but it’s worked for me since 1997 just fine.

    Thanks, Jim

    January 16th, 2012 at 6:08 pm

    Jim Holleran

    I just sold a .tv for $16,000 and accepted it, in escrow right now, that was the offer, good fair solid offer, probably could of got more some day, but decided to accept, cash out, get a good ROI, and reinvest in more .tv names, which IMO has the best ROI.

    Also, just got a low 6 figure offer and turn it down, and counter with a mid 6 figure offer. See what happens?

    My strategy is try to get “singles” throughout the year, and try to get 1 homerun throughout the year. Everybody is different, but it’s worked for me since 1997 just fine.

    Thanks, Jim

    January 16th, 2012 at 6:12 pm

    Jim Holleran

    I just sold a .tv for $16,000 and accepted it, in escrow right now, that was the offer, good fair solid offer, probably could of got more some day, but decided to accept, cash out, get a good ROI, and reinvest in more names, especially .tv names.

    Also, just got a low 6 figure offer and turn it down, and counter with a mid 6 figure offer. See what happens?

    My strategy is try to get “singles” throughout the year, and try to get 1 homerun throughout the year. Everybody is different, but it’s worked for me since 1997 just fine.

    Thanks, Jim

    January 16th, 2012 at 6:13 pm

    @Domains

    I think it is often better to ask for more and not get it, than to take the first offer and be left wondering what you could have gotten. Not in all cases though, sometimes a first offer can be a good one. In this case, my guess is the potential buyer is playing hardball, hoping you come back and ask for the $5k. When some time goes by, they will likely be back, putting you in a stronger position. It really is all a game, whether it’s deals for domains, real estate, artwork or whatever.

    January 16th, 2012 at 6:46 pm

    Elliot Silver

    @ Domains

    I offered it to him at his $5,000 price and he said he moved on.

    January 16th, 2012 at 6:48 pm

    Ron

    Could have been a fishing expedition, you have no proof he bought another name, maybe he was just feeling your domain out…

    January 16th, 2012 at 7:06 pm

    Jonathan

    Elliot, I’m really glad you posted this story.

    Waiting for the better offer seems to be the strategy that most people use, but you really have to do your homework on the name and the buyer.

    Generally, a buyer with deep pockets or someone who really wants your name and your name only will often dig deeper. But if it’s someone like your prospective buyer who is looking to get a name now for $5k then you may be out of luck.

    It’s good to see this, because domaining isn’t always easy or predictable. At the end of the day it’s a learning experience that will make you more prepared the next time around.

    January 16th, 2012 at 8:47 pm

    Chris Campbell

    Even offers that are accepted are not a done deal til the money is in house. I have had about three maybe four offers (all on hand regs) that I thought hard about before accepting them straight out of the gate, and even with all the due diligence on my end (knowing that I was dealing with reputable companies) did not end up closing. A couple even admitted that they were surprised I accepted, and threw out the, “Whoops, I need to get approval on this expenditure.” Their reasons for making the offers in the first place still elude me, shopping around?? Bottom line is that the deal you speak of Elliot, was possibly not meant to be in the first place.

    January 16th, 2012 at 9:28 pm

    Cdubblovesthekids

    I have turned down a 500k+ offer on a domain name with a straight face and a steady hand. Worked out very well :)

    Anyone taking the first offer usually shirtchanges themselves because 99% of people making an offer expect a counter-offer. This is the largest hurdle to overcome in domain sales is establishing a price. I like to figure out what I will sell a domain name for before any offers come in on it and then just adjust accordingly. Because you paid $100 or $1000 means nothing if it’s worth more so don’t use that in your calculations. If you paid a low price then you got a great deal, that low price does not mean you deserve less profit in it’s resale.

    Cdubblovesthekids

    January 17th, 2012 at 2:48 am

    JamesD

    I’ve not read all the replies so this may have already been said. Elliot, your story is incomplete. Only when you do sell the name will you know whether it was a good or bad decision to counter.
    You said you found out who the potential buyer was; is that buyer the best buyer for that domain or are there potentially better ones out there? Also, this was an approach soon after you aquired the name – to realise full value you probably have to say no to a lot of offers first.
    When you have sold the name, please come back and update the thread with your conclusion – I’ll bet you $5 you will need to alter the headline when you do 😉

    January 17th, 2012 at 4:09 am

    Eric

    I once countered a $500 offer with $25k and they accepted. It really all depends on the domain and the feel you have for the buyer. On the other hand I have turned down $100 offers and countered $500-1000 and never heard back.

    January 17th, 2012 at 8:56 am

    John B

    I TOOK an $8K offer on my domain, PearlEarrings.com which sold a few short weeks later for $40K.

    Sure wish I had negotiated….

    January 17th, 2012 at 9:35 am

    Bruce Diller

    Elliot

    My gut says this guy was floating balloons and wanted to see if anyone would grab it.

    I recieved an offer for a one word 6 letter domain from a guy initials ‘AM’ in December as well, responded politely and respespecfully with a counter offer and never heard back. Wonder if it’s the same person.

    In business many times buyers will contact MANY sellers and grab the one that bites.

    Remember if you had accepted his first offer, buyers regret would kickin leaving the buyer to wonder if could have gotten it cheaper.

    Negotiations are based on psychology keeping your wife (shes a shrink) you, me and every business person in constant thinking mode.

    FYI I would have done the same thing you did. :)

    January 17th, 2012 at 9:55 am

    dimensionfifth

    In my opinion, there is no need for anyone to get harsh on themselves, sometimes making a higher counter offer does work as you said Elliot, and sometimes not, you’ll never know what’s on the cards’ face. I don’t see any experience to be learnt here, specially when I hear opposing similar stories. But truth to be said, I wouldn’t have turned down this offer, I would’ve at most offer to send it to auction at $3,750 as an alternative option, otherwise I will be OK to sell at $5,000 (since it is a one word .com there is a possibility the bids will exceed or at least reach $5,000)

    January 17th, 2012 at 9:57 am

    Tom

    Well, if you’re in this business you can’t avoid things like this. Got an offer for $8000 on a domain I was asking $15K for. Countered with $12K and never heard back. When this happens I start having my doubts that they would have even followed through with the purchase even at their original offer price. Normally someone who is serious will at least respond reaffirming their original offer even if they don’t accept your counter. Happens a lot on the low end too so not just a high dollar phenomenon.

    January 17th, 2012 at 10:51 am

    Don

    1 out of 10 times the buyer will not come back when you counter offer. This is a gamble. How many times have you counter offered and they have accepted.

    You left some money, but you more than have made up for that by counter offering with all of your other domain names.

    Some may say you where being greedy. I say you where just being smart.

    Donny

    January 17th, 2012 at 12:55 pm

    Jim Holleran

    I think it all averages out throughout the year, win some, lose some.

    January 17th, 2012 at 1:47 pm

    Steve M

    The only thing certain about domain sales … is the uncertainty.

    Always has been. Always will be.

    January 17th, 2012 at 10:02 pm

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