Buying And Selling Domain Names

Every day I get enquiries from people wanting to buy domain names. Invariably, it starts out with someone making an offer via the parking page of the domain. Or sometimes, I simply get an email enquiry from someone who has got my details via the AusRegistry WhoIs.

I understand that there are a lot of people that just don’t understand or comprehend the value of a good domain name. Consequently, they might make a $200 offer for a premium domain name that’s worth at least mid 4 figures.

Generally, I try and be polite to these “lowball” offers, because the process of buying a good domain name for the first time can be daunting for many people on the other end of the email.

For a start, they don’t know who they’re dealing with. Mostly, all discussions and negotiations are done via email – sometimes (rarely) by phone.

When you think about it, if we want to buy or lease a house or commercial property, we generally end up having some personal interaction with the real estate agent. Whether it is inspecting the property in the first instance; or putting in an offer – generally we get to meet “someone” in the flesh!

Secondly, many prospective buyers don’t understand or appreciate the value of good domain names. Once again, using the real estate comparison, domains don’t (as yet) sell or lease for $ / per square metre; or have median prices for particular niches (suburb or location). So it’s our role as a seller to make them aware – and to do so in a manner that doesn’t get up their nose!

Tips For Sellers

  • Be patient and respectful. Don’t assume anything.
  • Identify yourself – at the very least, give your contact details including a phone number. (I always provide my LinkedIn address).
  • Try and build a relationship (which in turn builds confidence).
  • Be prepared to educate by giving links to previous sales; and authoritative articles.
  • Don’t get into an argument over value! If the buyer remains unconvinced, be prepared to thank them for their interest; and then walk away.
  • Have a prepared template or simple explanation of how the actual sale process works i.e. payment methods and transfer protocols.

Tips For Buyers

  • Don’t assume that the seller only paid $20 or $100 for the domain!
  • Even if they did buy a domain name cheaply (say 10 years ago), that was their smart investment. Would you expect the seller of a house in Sydney to sell you the property today for the price they paid 10 years ago?
  • All good com.au domains have long been sold; and so there is an aftermarket. Domain investors like myself sometimes pay 4 and 5 figures for the best domain names. Supply and demand.
  • Don’t assume that no one else wants the domain name you are after! If it’s a good domain, there will always be other buyers.
  • How would you feel if you procrastinated over the acquisition – only to find that when you came back to try and buy it, someone else had purchased the domain (particularly if it was your competitor)?
  • Don’t think that the purchase of a domain is a cost. It is an investment in you or your business. That domain you buy today is an asset that can always be sold sometime in the future.
  • A premium domain name is your cyber address – so get the best you can. Don’t opt for something long (or in another extension like  a net.au or other) – to do this might send a negative message to your customers or clients.
  • If you feel the asking price is too high – or alternatively your budget just can’t afford it right now – ask the seller if they would agree to payment terms. As an example, I’m often prepared to enter into a payment arrangement over 6 or 12 months. Whilst the buyer doesn’t get “title” to the domain until it is fully paid for, they can have immediate use.

In Conclusion

The image attached to this article summarises the ultimate situation.

The seller wants to get an adequate return on their original investment; and the buyer desires to do the same (albeit that they want the domain name acquisition to pay off for their business in months and years to come).

Here’s to a win / win!

Ned O’Meara – 15th June 2016

2 thoughts on “Buying And Selling Domain Names

  • Avatar
    June 15, 2016 at 5:38 pm
    Permalink

    Good article Ned with some great tips.

    One thing many domainers do that doesn’t help is having “make an offer” or conversely a ridiculously high asking price, for example, like 80% of the domains listed on NetFleet! I understand why the price of make an offer is in place, but to the buyer it gives no idea of what the price is or what the price expectation is, so you are bound to get lowball offers. If properties (houses, units, etc) were sold this way, the same thing would happen. Having a price expectation makes it clear from the start.

    • Ned O'Meara
      June 16, 2016 at 7:29 am
      Permalink

      Thanks Joel.

      Good points that you raise, though I’m actually in favour of the “make an offer” scenario for the majority of my domains (generally speaking). To me, I welcome the engagement of an initial enquiry. That way, I at least get to start a conversation – and who knows where that leads. If I was to put a price out there on a good domain, then I might not even get an initial enquiry. So I have nothing.

      There are some instances however where a “Buy It Now” price is preferable (non-premium domains). I know a couple of domain investors who do very well with this method.

      My advice (for what it is worth), is for domain investors to split test different scenarios, and see what works best for them.

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