Small domain deals can sometimes be the most time engaging transactions – not to mention frustrating!
On the contrary, higher value sales are generally completed with a minimum of fuss.
Don’t get me wrong. I love doing deals no matter what size they are. 🙂
And I accept the fact that a lot of people are buying domains for the first time, and therefore need reassurance as to the process. Therefore I have email templates to guide people through from “go to whoa”, and 99% of the time I end up with happy purchasers. As it should be.
What I’m talking about here though are those couple of times where it goes off the rails for whatever reason. And those deals are invariably where the purchase price is under $1000.
Two recent examples
I hardly ever sell an Aussie domain name for 3 figures these days. Most are 4 figure sales with an occasional 5 figure one.
But I can be a soft touch sometimes. I have two young adult sons, so when I get a young self-employed person approach me to buy a domain, I tend to be quite generous in my pricing and payment terms. Happy to give them a “leg up”.
However it all “turned to custard” with these two sales.
Domain Sale 1
This was a geographic suburb domain name on the Gold Coast. Average selling price on these is between $1500 and $4500.
A young real estate agent approached me to purchase it. He wanted to “own” the suburb he worked in (which I thought was great initiative). So I happily agreed to do a “very friendly deal” – $900 + GST – deposit of $330; and payment of the balance by instalments over 2 months. Even agreed to give him use of the domain.
Long story short – had to chase him for deposit. Eventually paid with tons of excuses. Next payment wasn’t made even though I gave him a courtesy reminder. Then two weeks after due date, I warned him that deal would be terminated if payment wasn’t made (as per invoice terms). After three weeks I advised him that deal was cancelled.
His response:
I had every intention of completing this transaction as I desperately wanted the domain name. But clearly the timing was not right. You have gained. I have lost. Seems to be the lay of the land lately for me. Can’t seem to catch a break anywhere from anyone.
Domain Sale 2
This was a geographic (major regional city) service domain – e.g. LocksmithSampleCity.com.au. Great search volume. Once again, these domains typically sell to endusers between $1500 and $4500.
I thought this young man was a go-getter looking to acquire some market share. He had his own business domain name (which he had just set up a site for on WIX). He now sensibly wanted to acquire the keyword domain for his occupation for his city.
So we did a similar deal to the one above, except this one he wanted to pay off weekly. Fine by me. I even pointed / redirected my domain to his current website.
And you guessed it! Deal wasn’t completed. I got the deposit; then had to chase next payment (which was also paid late). Final two instalments weren’t paid – so after 3 weeks I had to cancel the deal.
His reasoning for not proceeding?
The site is no were to be found on Google no thanks I’m not interested as it’s not actually going to benefit me for ages for now just money down the drain
My conclusions and advice?
- I’ll still probably be a soft touch. 🙂
- Have a strong invoice with explicit terms – and make sure purchaser understands.
- Communication is the key – diarise key timelines and give courtesy reminders. Follow through.
- Don’t let it get too personal.
Anyone had similar experiences? Or any comments or further advice to give?
I’ve had two five-figure sales go pear-shaped, both niche category-killer names. The first was for $10,750 and after reaching agreement the buyer PD’d the name (under the previous 6-month prohibition on resale). I recovered it through the drops and threatened him to pay up, which he did. The second was an agreed sale at $22,500 but then the buyer wanted to unilaterally change the price to $15,000. I told him this was not acceptable and agreement had already been reached. He then said $18,000 (mid-escrow!). I stuck to my guns, threatened him, and he paid the $22,500. Rule is to keep everything in writing, arm yourself with a good understanding of contract law, and have a good lawyer. IMO selling any name for less than $5,000 is not worth the time/effort (and anyone who is more than a tyrekicker/wishful thinker will happily pay $5,000) but for those that do sell at this level get the buyer to pay 100% upfront via PayPal. Use Escrow.com for sales $5,000 and above.
Touch wood, my experience with bigger sales have generally been fantastic.
Of course I’ve had a few sales not settle over time, but I prefer to simply cancel the transaction and never deal with the people again (and of course I let my peers know who to watch out for!). There are always other buyers for good domains.
I’ve done hundreds of private sales (and some for big numbers), and never once used an escrow service either. Nor have I used a lawyer (though I do understand why in some instances they are vitally important). But I have a good process in place that tends to give buyers comfort.
I NEVER use PayPal – if you read their terms and conditions with regards digital sales, they are not friendly.