One of the most interesting things I get to do in my role as General Manager, Domain Portfolio at Tucows is manage the sale of domain names that we own to third party buyers. Since joining the company, my team and I have dealt with countless inquiries from prospective domain name buyers looking to acquire a domain name from our portfolio. I've seen all sorts of approaches taken, some good, some not so good, and I wanted to share with you the story of one sale that we made because it's a textbook case of how NOT to buy a domain name.
One morning, we received an "urgent" email and series of phone calls from an agency wanting to purchase a particular domain name.
That was their first mistake.
They explained that they were looking to acquire this domain name on behalf of one of their clients and that they needed to close the deal with us by the end of the day. Apparently, they had shortlisted several different domain names for this client and urgently needed to be able to tell their client that same evening that they'd secured one of the domain names.
That was their second mistake.
When it came time for me to negotiate the price of the domain name with the agency, it quickly became apparent to me that I was dealing with people who were spending money that wasn't their own and - worse - could care less. Technically, of course, this was correct - the agency was buying the domain name on behalf of their client - but they obviously didn't care how much their client would have to pay for the domain name as long as it was within a loosely defined range.
That was their third, and biggest, mistake.
Needless to say, I negotiated the price up, way up. In fact, I got us TEN TIMES the amount I would have normally sold that particular domain name for had the agency not been so flippant about the whole affair. Since the agency was in a hurry to meet a deadline and were willing to spend their client's money like drunken sailors, I was happy to assist them in accomplishing their mission. ;+)
So, what lessons might be learned from this affair?
- Rushing a domain name purchase, perhaps because you've left it to the last minute (ad agencies and clients, are you listening?), will likely mean the buyer will end up paying more than they normally should.
- If you are using an intermediary (such as a domain name buyer broker) to negotiate the purchase of a domain name on your behalf (which is not a bad idea, by the way), make sure your 'agent' is motivated to get you the best possible price. Ideally, they should treat the money that have to spend with as much, if not more, care than if it was their own.
- Finally, regardless of whether or not you work with an intermediary, establish a clearly defined price range (or at least a maximum figure) at the outset, otherwise you will weaken your negotiating ability and won't know when it's time to walk away from the deal.
In other words, when it comes to buying a domain name, don't be a drunken sailor on a deadline. But if you are, have I got a deal for you...
Domain name expert Bill Sweetman is the President & Lead Ninja of Name Ninja, a boutique domain name consulting firm that helps companies acquire, manage, protect, and profit from their domain names. Bill has provided strategic domain name advice to major companies around the world for over 20 years.
Contact Bill | Follow Bill | Subscribe to this Blog | Summon the Name Ninja
It's like trying to bargain with vendors at flea markets. Once they figure out that you really fancy a certain product of theirs, they'll be confident enough to give you a high price for it. You have already lost your bargaining power because somehow, they know that you won't leave the market without buying it.
Posted by: Jay, writer MemberSpeed.com | December 23, 2007 at 12:25 PM
Talk about "bargain"! The moral of the story: regardless of how much you may want something, it is always safe to reserve an inkling of hesitation, or at least show some of it to the vendors just so you could keep the ball on your side and use it to your advantage and not the other way around.
Posted by: jen_chan, writer surefirewealth.com | December 25, 2007 at 07:51 PM
What was the domain name?
Posted by: Tod M. | January 3, 2008 at 11:07 PM
Tod, I can't reveal the domain name, but it was a nonsensical four letter .com name similar to sfrs[dot]com.
Posted by: Bill Sweetman | January 7, 2008 at 12:52 PM