Having been on both sides of the negotiation many times, I’ve encountered all types of buyers and sellers.
Sometimes you can acquiesce too easily – and, as a seller, you leave money on the table. Or if you’re a buyer, you could have got a better price if you had been firmer in your resolve (or a bit more patient).
Sometimes though, you can push too hard as either a buyer or a seller – and you lose.
On one occasion when I was trying to buy a domain name, I walked away in frustration because I felt the seller was being unrealistic. When I went back to them about a week later to try again, they gleefully told me that they’d sold the domain to someone else. 🙁 I can understand that, because as a seller, I’ve done the same thing. If a buyer plays a “hard game”, nothing gives me a greater pleasure than selling the domain elsewhere!
So it’s a fine line – and whilst practise doesn’t make you perfect; it certainly makes you better.
So Here’s A Formula
I’m indebted to an online friend of mine from Canada (George Kirikos) who recently shared the following with me when it comes to negotiating prices. Makes a lot of sense.
(These comments came about when the recent massive sale of LasVegas.com was uncovered by George).
- Strong buyer vs. strong seller = high price! (As in the LasVegas.com transaction).
- Strong buyer vs. weak seller = low price
- Weak buyer vs. strong seller = no deal
- Weak buyer vs weak seller = low price
Factors That Count
The following can be related to the formulas above:
“Level of Urgency”. e.g. If you desperately need the domain for whatever reason, and you encounter a strong seller, be prepared to pay! Or be prepared to lose.
Same goes if you’re selling and you need the money urgently.
“Doing your homework”. i.e. Do you know who is behind the offer to buy? Doing some digging can elevate you into the ranks of a “strong seller”. Not doing it can conversely put you into the weak seller category.
There are probably lots of other circumstances, but to me these are the biggies.
What do you think?
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