Just like it’s important for anyone in the business world to have good negotiating skills, for domain registrants it is also one of the most valuable traits. Considering domainers are looking to acquire high quality names for the lowest possible price, before turning them over for the best return possible, one cannot afford to be ill-equipped at the negotiating table.
Essential to one’s success is their familiarity with the domain up for grabs. Negotiating with another party who is better informed than you is only going to result in the other party walking away with a better deal. If you’re a buyer, you should at least be familiar with the domain’s performance metrics, its current purpose, its target market, relevant end users of the name, the revenue model being used, previous sales, and branding implications. All in all, you need to know its approximate value (to you).
On the other hand, as a seller, it would be remiss not to be aware of the name’s value, similar names, the level of demand associated with the domain, and further details about the interested buyer. Often, buyers are reluctant to display their real identity and will submit offers with a fake profile. These buyers are normally genuine, however, as a seller, to gain leverage you should do as much as possible to uncover their ‘story’. Buyers however, can stand to gain trust and rapport by being open about themselves and their intended use – provided they are not the next Mike Mann of domain name investments, or with pockets lined like Bill Gates.
Neither party should give away too much information with regards to how keen they are to acquire or dispose of the domain. Unless you’re looking to be played for a fool, avoid indicating your general finances. If you do leave hints as to your financial position, don’t be surprised if the other party’s expectations suddenly change. Keep financial discussions focused on the domain in question, indicating the price you are prepared to purchase or sell the name – this doesn’t need to align with what value you place on it.
Furthermore, with initial offers, leave yourself scope to adjust up or down respectively. Commencing negotiations at your limits will almost inevitably lead to disappointment or an impasse. With that said, leaving scope does not entail making a ridiculous offer – be it far too low, or far too high. You need to show that you are serious about the transaction, and a ‘modest’ offer is means to prove that. As a seller, when receiving lowball offers, firmly emphasise the level below which you are not interested in discussing the sale of the domain.
Some buyers also make casual enquiries about the domain’s use rather than whether it is being sold. The problem though, is that this tactic may lack the conviction to persuade the seller your query is genuine. Beyond the initial offer is where the haggling can star. Generally speaking, you will require a fair degree of patience as parties discuss back and forth. Adding some urgency can work to the buyer’s advantage, as a seller could worry they may lose their only buyer. If the seller advises that there are multiple parties interested, try to push for details to verify the legitimacy of these claims. Failing that, follow your instinct and remain firmly committed to the value you place on the domain.
Last but not least, ensure the transaction is documented through means which will afford you legal protection and/or recourse.
That’s it for this occasion, stay tuned for our next educational article. If you have any questions, don’t hesitate to contact us.
The Netfleet Team
This post is tagged: negotiating; domain sales; negotiation