Today's Offer Could Be Gone Tomorrow | DomainInvesting.com
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Today’s Offer Could Be Gone Tomorrow

23

A little over a year ago, I had a $50,000 cash + small equity offer for one of my domain names. I turned it down because I thought it was worth more and had recently closed a couple of large deals. I still think the domain name is worth more, but I am more inclined to sell it now since I haven’t received any other substantial offers since then. Unfortunately, the prospect seems to have disappeared along with the offer, despite a couple of emails and phone calls.

When you are considering an offer on a domain name, you need to realize that the offer may not be there tomorrow if you turn it down today. Business and personal situations change, and even if the company still wants a particular domain name, they may not be able to honor their offer at a later date. It also could put the buyer in a better negotiating position knowing that the seller has come back looking to make a deal.

When an inquiry on one of my domain names is made, I often hear that a prospect is considering several domain names. Sometimes this seems like a negotiation ploy to get a lower price, but when I’ve been an end user domain buyer, I frequently do have other domain names under consideration. If I offer $50,000 for one name and I end up buying a different expensive domain name in lieu of the first, it’s unlikely I will still be willing to honor the $50k offer that I had made (assuming it was rejected).

As a domain name seller, I need to realize that any and all offers may not be valid after rejecting them, even if a short time has passed. Companies may have made another purchase, had second thoughts on buying a particular domain name, or perhaps the business climate has changed to the point that the investment no longer makes sense.

When I am buying domain names and the seller mentions a previous offer that was rejected, I always like to ask how long ago that offer was made. If it was made months or years ago, I emphasize that the offer is probably no longer valid. Although being able to brag to future buyers about a rejected offer may help increase their offer, the truth is, that high offer is most likely no longer available.

Perhaps another, better offer will come around in the future for my domain name. However, when considering an offer that is on the table, we all should realize that the offer may no longer exist the minute you turn it down, and a better offer may not come for a long time (or ever).


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 (23)

    phil

    I have found not only in domains but other items as well (vehicles/land/boats) , the first buyer with a reasonable offer is usually the best offer. Many times in my earlier years I tried to hold out for the last dollar or what I “thought” it might be to someone else.. finding as Elliot mentioned that I had lost the buyer and went on later to sell fro less than the original offer.. I try not to do that as much anymore.

    March 4th, 2014 at 12:18 pm

    Andrea Paladini

    Elliot,
    Well, you can’t generalize, because every domain is different, every negotiation is a different story.
    Those situations have to be assessed on a case-by-case basis.
    It depends on the name quality, on the price, on the specific situation, etc, there are many factors/variables which can play a role in the negotiation process.
    Plus, you have to consider, as you briefly mentioned, both parties tactics.
    So the “could” (which can easily become a “could not”) in your title is more than appropriate … ­čśÇ

    March 4th, 2014 at 6:39 pm

    Charles

    Easy come.

    Easy go.

    March 4th, 2014 at 7:09 pm

    John

    Good advice and food for thought though Andrea makes a very good point too despite the down vote.

    Case in point – let’s take MutualFunds.com. I would contend that it’s such a killer domain where there is no uncertainty at all about it’s worth. Consequently, operating under a “case by case basis” I would also contend that if a $1 Million offer came, it would have been a very good idea to reject it quickly unless of course one’s financial situation made it necessary to go for that. In my view MutualFunds.com is till worth considerably more than $1 Million.

    On the other hand, let’s take another example similar to one Elliot has already posted about: TruckParts.com (I don’t know whose it is now and don’t care). I would suggest that while TruckParts.com is also obviously a great domain and very valuable, there is nonetheless a degree of uncertainty of what kind of offers one should reject and accept that a domain like MutualFunds.com does not possess.

    So yes, each case is unique.

    I recently rebuffed someone who was ready to make a “$ x x, x x x” offer, but I would also admit that it would not have necessarily been bad for me to consider that for the particular domain. When I wrote back much later to inquire, there was no reply. So Elliot’s advice certainly holds true in that case.

    Lately I just replied to my new domain suitor with the “BOD” (board of directors?) with and expectation of $x, x x x, x x x to sell or a (wait for it, wait for it) monthly lease of $x x, x x x. So it remains to be seen whether they’ll reply. They hadn’t even made an offer yet, but the fellow was certainly talking big and the company appears to be successful and has a real nice .com of their own. Honestly I doubt they’ll go for it though, and in this case I’m not trying to sell and they are only the first in what I suspected would be an eventual long line of suitors for this one.

    March 4th, 2014 at 7:35 pm

    Puiu

    Elliot,

    What was the domain? Maybe someone here is ready to paid the same amount! :)

    P.

    March 5th, 2014 at 8:57 am

      Elliot Silver

      Not going to share. It’s priced for an end user buyer, and if an end user buyer comes around, I don’t want to be held to this $50k price because market conditions change daily.

      March 5th, 2014 at 9:11 am

    Randall

    thats what happens when you get greedy

    March 5th, 2014 at 10:09 am

      Elliot Silver

      Sometimes, although there have also been times that strategy has worked out pretty well.

      March 5th, 2014 at 10:11 am

    RJ

    I don’t get how people are willing to fork out $200K+ for a Subway franchise where they will work for sweat equity and 3% margins but are reluctant to buy a category killer name for $xx,xxx even with a build out, marketing and other expenses you can be well under $100,000 for a running category killer business.

    March 5th, 2014 at 12:05 pm

      John

      You are so right. Buying a franchise is a new form of slavery.
      Unfortunately most people don’t know how to make money and some don’t have enough capital to make money so they have to work like slaves.
      I know how to make money (making 20-30% year after year) but my capital base is small so it only supplements my income from employment.
      Who said life is fair

      In reply to RJ | March 8th, 2014 at 4:02 pm

    jcremington

    This is actually a story that I have been hearing quite freqently
    these days. but the lesson to be learned here I think is to just
    ask a “fair” price to begin with, and knowing that just stand your
    ground and be prepared to say NO to any offer you deem truly unfair
    and accept the possiblity of the consequences in advance before you
    set your price.

    That being said, I think the domain industry is in SERIOUS decline
    and the facts are even the most valuable .coms are being devalued
    as a result of all of the GREED and new GTLD’S being pushed on the
    public by the various registries supposedly as viable alternatives.

    These are important factors one should keep in mind when they are
    setting a asking price. Obviously a fair asking price is alot more
    likely to sell in a tough domain market which we now have for
    certain.

    Better to sell for 20% less in most cases than to not sell at all,
    and have to live with the regret of a serious passed up opportunity
    as a result of being greedy.

    Im sure Elliot wasnt being greedy because he is an expert domainer
    but Ive seen many cases in which novice domainers obviously were.
    This is especially true when you are talking about any other
    extenstion than .coms in particular.

    March 5th, 2014 at 4:48 pm

      Elliot Silver

      “Im sure Elliot wasnt being greedy because he is an expert domainer”

      No – I was being greedy, and I am fine admitting that. I was fortunate to be in a position where I could be greedy. I valued this domain name more than the cash from the sale. Now that a year has gone by, I would probably re-evaulate that decision.

      I also don’t totally agree about this big decline in domain values. Last year was my best year ever (financially). The year prior had been my best year until it was eclipsed. Domain sales made up the majority of my income.

      In reply to jcremington | March 5th, 2014 at 4:52 pm

      m

      Congrats!

      One person’s sales results should in no way be viewed as a barometer for an entire industry. When I compare Sedo`s aggregate sale for mid-range names (the bulk of domains sold), prices are down year-over-year.

      In reply to Elliot Silver | March 5th, 2014 at 5:05 pm

      Elliot Silver

      I can only give my perspective, and considering most sales are still private and unreported, marketplace reports are just the tip of the iceberg.

      In reply to m | March 5th, 2014 at 5:09 pm

    George from Miami

    This is how I do it. I understand for others may not be suitable.
    All my domain names are hand registered.
    Using coupons my average cost is ~$6.00
    Here’s what I do if I receive an offer of $500.00 from a $700.00 domain.
    What’s the difference? 40% Less…
    What’s the Return if I sell it? 8233.33%.
    In my book, even taking all expenses, remains more than an excellent return on investment.
    To me, all boils down to a plain and simple stock and volume rotation.

    George

    March 5th, 2014 at 5:01 pm

      Elliot Silver

      For your business model, that makes perfect sense. You can continue buying inventory at around $6 to replenish your portfolio when you sell. I was doing the same thing when I started.

      It’s not as easy to do that on the higher end though. I wish I had a constant flow of domain names that I could buy for $xx,xxx and sell profitably in short order. It’s more difficult to do that consistently, and that means I need to be sure to maximize my sales so I don’t leave too much money on the table.

      In reply to George from Miami | March 5th, 2014 at 5:10 pm

      m

      Give some examples of these hand-reg`d, “$700 domains”

      In reply to George from Miami | March 5th, 2014 at 5:11 pm

      Elliot Silver

      You should give some examples of your reported sales if you expect others to do the same:

      http://www.domaininvesting.com/how-did-you-do-in-2013/#comment-195887

      In reply to m | March 5th, 2014 at 5:13 pm

      George from Miami

      I know Elliot. You’re perfectly right.
      I’m striving to get in your shoes and being in the same situation.

      In reply to Elliot Silver | March 5th, 2014 at 5:23 pm

      Elliot Silver

      I started in 2003 and didn’t start making “good” money until 2006. I was fortunate to be able to turn it into a full time business. Not sure if I could replicate that if I started today based on my model of flipping hand registered domain names.

      In reply to George from Miami | March 5th, 2014 at 5:27 pm

      George from Miami

      I do not ask colleagues private questions about their business.
      Therefore, I don’t ask, I don’t tell.

      In reply to m | March 5th, 2014 at 5:43 pm

      George from Miami

      Sorry Elliot. My answer was for “m”
      Thank you for your encouraging response.
      I do learn a lot from your blog.

      In reply to Elliot Silver | March 5th, 2014 at 5:48 pm

    jcremington

    Well atleast you are being honest about it Elliot, which says
    something very positive about your character and this is why
    I read your blog.

    I guess if you can afford it — playing hardball actually could
    be a successful strategy, but to me it’s an awful lot like
    gambling with the domain industry being the way it is right
    now and as a former gambler lol I believe you should never
    obviously gamble if you can’t truly afford to lose.

    I dont think most people are in a real honest position to sit
    and wait for a 5-6 digit domain offer to come their way being
    how rare they have become recently. I know I am certainly not
    anymore but there was a time when I was, and I employed a very
    similar strategy rather consistently ..and honestly it didnt
    workout to well for me.

    As far as my comment on the domain industry being in decline
    there are obvious exceptions to every rule, and Im glad to hear
    you are one of those exceptions. but for I think the majority of
    domainers that I talk to times are tough right now, and the market
    has changed more in the past 2 years than possibly ever which has
    has the effect of seemingly making everything a bit more risky.
    especially sitting on domains for too long that could be worth
    5 digits or maybe in the end actually worth nothing but a
    renewal fee if you miss your opportunity.

    btw ..Glad to see you have had the best 2 years yet, maybe there
    is still hope lol

    March 5th, 2014 at 5:21 pm

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