Why Publishing an Acquisition May Be a Good Idea | DomainInvesting.com

Why Publishing an Acquisition May Be a Good Idea

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I have a couple of colleagues who buy great domain names in specific verticals. We’ve done business before, and it seems that whenever I bring them a great domain name, they always balk at the price at first and refer me to a report about a great purchase the company made within the past two years.

That purchase was a steal of a deal in my opinion, and they now use it as a comparable when someone brings them a name to purchase or when they are in the midst of negotiations.

Recent comps are a great tool to use when negotiating. Without a MLS system, there are few ways to really value a particular domain name, and a comp shows actual market data. If you can show a buyer or seller a comparable sale, that person might be more inclined to negotiate in your favor, and it’s a great way to say, “your asking price isn’t in touch with reality.”

When you buy a specific type of domain name and are continuing to buy without plans to sell, it might behoove you to report your lower priced acquisitions to an outlet like DNJournal. If you snag a steal of a deal, you can direct future negotiations to that sales report in the hopes that they will see it as a comparable sale. The seller may do his or her own research to find other comps, but if there aren’t many out there, it could be a great way to get a domain name you want at a terrific price.

Personally, I haven’t done this before because as a domain seller, I don’t want my purchase price disclosed. I do think someone who has no sales plans but wants to buy more names in a particular vertical could benefit from having “beneficial” comps reported.


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 (21)

    Uzoma

    Elliot, are you serious?
    Are you trying to see what some of us would say?

    You don’t want to publish your sales, but it’s a good idea for the industry to have them published? Please reconcile the two for me.

    March 2nd, 2012 at 6:53 pm

    Elliot Silver

    It’s beneficial for some people but not for my business.

    March 2nd, 2012 at 6:55 pm

    Uzoma

    Your article did not make that clear at all. I think you should speak for yourself on this, and let those who believe in publishing their sales speak for themselves. And, I don’t think you should publish sales data from Afternic, and Sedo etc.

    This is my humble opinion, it’s your blog, I know.

    March 2nd, 2012 at 7:08 pm

    Poor Uncle

    Yeah, Elliot. What you said kind of doesn’t make sense. If you buy and don’t sell, that would make you an end users. But as a reseller why would you want people to know u bought at a low price?

    I thought that is why reseller doesn’t matter what industry they are in always keep the acquisition price a secret.

    March 2nd, 2012 at 9:00 pm

    Elliot Silver

    Some of the people with whom I do business are end users, and if they get a great purchase deal, they might want to report it to get better deals in the future.

    March 2nd, 2012 at 9:10 pm

    Nadia

    I’m sorry, I have to agree with the other posters on this. Unless I’m missing something, I don’t see how this would help anyone. We’re in agreement that there’s no across-the-board valuation system and that every domain is unique, but let’s say someone who invests in travel names acquires “Ski Tahoe” or “Vail” or a comparable name.

    Because they bought on a handshake deal with a longtime colleague who had no use for it, they paid $1200. But $1200 clearly isn’t the *value of the name.* It’s a one-off “steal.” Do you think they’re going to want to advertise that?

    Why would you advertise anything other than a transaction that (in most people’s eyes) reflects the true value of the name?

    If someone was trying to buy that name from you, or any other successful investors, and used such a “comp” in negotiations, I don’t think it would go over very well.

    Also – and I mean this with the utmost respect because I’m obviously a huge fan of your writing and visit this blog daily – I do think the post is slightly hypocritical, given that it’s not advice you’ve chosen to follow.

    March 2nd, 2012 at 9:46 pm

    Elliot Silver

    Maybe how I wrote it was confusing. ┬áLet’s say I buy Visit names for development and got a great deal on VisitBoston.com for a few thousand dollars. I might consider reporting that purchase price so I can point to that price as a comparable when negotiating in the future. Yea, it might not matter much to a domain owner intent on selling his name for a price much higher than the reported price. However, someone without the extensive knowledge of the domain market may see it as a comp and adjust his price downward.

    As someone who buys an resells names I would not want to report a great purchase price. However of selling wasnt my business model I would be more inclined to report a great deal in the hopes that it helps me on future acquisitions. Just a thought.

    March 2nd, 2012 at 9:53 pm

    Uzoma

    Elliot,

    Can you point to any domainer, or blogger whose business model is not selling? Everybody is a seller, everything is for sale, as they say in sales. Some people are analytic, some are expressive, some are patriotic, but all are salesmen and women. So, it really makes no sense when you use your “model”, by which you mean that you engage in selling domains full time, it doesn’t give you an excuse to be different. Let’s work together, join the industry, let’s have a uniform way of judging domain value, report your sales to the index like everyone else, you can make exceptions when the buyer requests anonymity. But your excuse that it may expose your cunning bargaining, is, well, frankly, …bullshit. I know you can see how reluctantly I said that. I had to say it.

    @Nadia
    Good for you. I have never seen you admonish Elliot all these years. It’s good to see you free yourself. You are right. Elliot is wrong.

    March 2nd, 2012 at 10:13 pm

    Elliot Silver

    @. Uzoma

    2,000 +/- people visit my blog every day and not all are domain sellers. I can think of two people off the top of my head who do this strategy and have told me it works sometimes. When they buy off of domain investors it doesn’t work as well. When they buy a name from one of the millions of other domain owners who don’t read blogs and they show them a comp in their favor it’s more effective.

    This isnt something i do or would do, but it’s something that could benefit someone who does read my blog.

    March 2nd, 2012 at 10:20 pm

    Elliot Silver

    Comps aren’t everything in a negotiation by any stretch but they are one tool that can be effective for a buyer and a seller.

    Again, I personally haven’t used this tactic before.

    Anyway, I’m on a mini vacation and an signing off for the night.

    March 2nd, 2012 at 10:26 pm

    Uzoma

    Elliot,
    I believe you, this is a popular blog. But let’s not forget that your blog is primarily for domainers. If I wasn’t domaining, what in the world would I be doing on this blog, or even Domaining.com?

    Elliot, I hate to tell you this, because I’ve caught you in way too many hypocritical positions, if you don’t start doing things that benefit the industry, I will stop coming to this blog; I know you’d say “good riddance”, well, good riddance it’ll be. I’m not going to be blogging in a place where there’s recalcitrant, and obstinate selfishness, and hypocrisy.

    March 2nd, 2012 at 10:26 pm

    Elliot Silver

    @ Uzoma

    You’ve been saying that for over a year and you never seem to follow through. By all means, stop wasting your time here. Good luck with your business. I really mean it and am not being sarcastic in wishing you well.

    March 2nd, 2012 at 10:30 pm

    Uzoma

    Very well, this is my last post here. bye

    March 2nd, 2012 at 10:32 pm

    Poor Uncle

    Ha! I thought by definition, end user don’t get reseller price. Is there such a thing as non disclosure agree where the BUYER agree not to disclose his/her purchase price?

    It seems kind of silly. I try to think of an instance where buyer would like to broadcast to the world when they gotten a good deal.

    March 2nd, 2012 at 11:15 pm

    Devon

    Elliot, just curious. Have any end users whom you’ve either attempted to sell or have sold to, ever read your blog posts and/or the often ridiculous commentary that often follows? Has there ever been any instances where it either hurt or helped a sale?

    March 3rd, 2012 at 3:31 am

      Elliot Silver

      @ Devon

      Yeah, I assume many have since I use my name, and the blog comes back at #1 for searches of my name. I think it’s helpful because it shows I have a fairly strong web presence and am not going to disappear into thin air.

      If anyone would need a reference, I can provide plenty from within the domain industry as well as representatives from large companies with whom I’ve done business flawlessly. I’ve volunteer references before, but nobody has ever asked for one.

      Generally speaking, when I make a deal to buy or sell a domain name, I suggest Escrow.com, which removes most uncertainty anyway.

      In addition, when you offer good money to buy a domain asset or you are offering a great domain asset at a fair price, that’s the most important thing.

      March 3rd, 2012 at 9:46 am

    RH

    Personally comps mean nothing to me, because first off I don’t really believe they are true comps. To take the VisitBoston.com example I would counter with all of Michael Berkens VisitGeo.com sales where he has told me he asks for very high prices to help the value of the visit names he still owns.

    I view each name as unique if I wanted $8,000 and someone told me they bought a name similar because that’s all it can be, no two names are the same. I would say go back to that seller and would not reply again until their email said sold for $8,000.

    Again IMO

    March 3rd, 2012 at 11:08 am

    Elliot Silver

    Visit was probably a bad example because of the high-value comps already out there. In verticals where there’re fewer comps, it might be beneficial.

    Again, this is something that I wouldn’t do because it wouldn’t benefit my business, but it’s something that others might do.

    March 3rd, 2012 at 11:11 am

    Devon

    @Elliot, I suppose the reason I’ve always kept a distance from having my own blog is because of ridiculous and dramatic comments. In some cases, if I were a buyer, it may not completely turn me off, but it would certainly make me have pause about the industry that you’re in. This is one of the best industries around, yet it does seem to be filled with more cry babies, amateurs, and unscrupulous mentally disturbed people than many other industries.

    March 3rd, 2012 at 12:05 pm

    Elliot Silver

    @ Devon

    With almost no barriers to entry the business is filled with all types of people.

    March 3rd, 2012 at 12:08 pm

    Devon

    Yep, this is true.

    March 3rd, 2012 at 1:58 pm

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