Domain Name Acquisitions 101

I’ve had enough people ask me for a foundational post about domain name acquisitions so I decided to put one together. I’m keeping it short and sweet so this can be used as a primer or a reference. There are three key steps to the domain name acquisition process:

  1. Find out who owns the domain
  2. Contact the owner
  3. Negotiate the sale

Steps one and two you can do without a 101 post. Yes, it might take time to track down the owner but in most cases you’ll be able to use some of the awesome tools out there like Domain Tools to find this quickly. Contacting the owner involves sending an email or making a phone call, or, if you really want to have an edge, contacting a domain broker that does this day in and day out.

The last step is to negotiate the actual sale and close the deal. Below are some tips that have worked for me over the last six years:

  • Do your research – you should know who the domain owner is, how many other domains they own, what domains they might have sold previously, etc. The point is, the price of a domain has a lot more to do with who owns it than the name itself. 
  • Big companies often don’t sell – you’re much better off finding out that a domain investor owns your domain name than a big company. Big companies tend to sell at ridiculously high prices but often won’t sell even though they are not actively using the domain.
  • Don’t start with a lowball offer – if someone offered you $50 for your Ferrari you’d probably be a bit offended right? The same thing is true with domain names. No, you can’t buy Insurance.com for $1,000. Solid .COM domains sell for six and seven figures.
  • The person who throws out the price first usually loses – it’s better to ask the domain owner if the name is for sale and see if they throw out a price or a range. This can also help you determine if the domain you are looking at is even in your budget, if your max is $5,000 and the owner wants six-figures there’s no need to negotiate since you’re too far apart.
  • Hop on the phone – it is much better to negotiate in realtime using your voice than over email.
  • Be realistic – last but not least, be realistic and honest with yourself. If you were hoping to get a killer one-word .COM for $50,000 and the owner wants $500,000 don’t trick yourself into thinking they’ll bring their price down by $450,000. If your budget is under $25,000 look at extensions like .ME, .CO and .IO, great domains in these extensions sell for significantly less than their .COM counterparts.

{ 4 comments… add one }

  • Logan Flatt July 10, 2013, 10:15 pm

    One comment regarding steps 1 and 2: one does not own a domain name. We are all merely “current registrants”. If we truly owned these things, we wouldn’t have to renew them annually. We are working within a system, and that system does not allow for ownership in its proper sense.

    Reply
    • Morgan July 11, 2013, 11:28 am

      @Logan – true – I assumed that everyone reading this knows that 🙂 I mean the current owner at the time, and in most cases when you’re looking to buy a domain, it’s usually one with some real value to it so the person isn’t going to drop it anytime soon.

      Reply
  • Adi Weitzman July 11, 2013, 7:23 am

    Morgan,

    I’ve heard you and others mention that the person who throws out the first price usually loses so how would you recommend getting the buyer to make the first offer.

    Reply
  • Logan Flatt July 11, 2013, 11:57 am

    @Morgan

    I know. I was just being pedantic. 🙂 I made a similar, and controversial, argument about real estate — that you never really own it — on SeekingAlpha.com back in 2008 before the big crash:

    You Don’t Own Real Estate – It Owns You
    http://seekingalpha.com/article/84724-you-don-t-own-real-estate-it-owns-you

    Logan.

    Reply

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