Domaining MBA Monday: Selling Domains To End-Users, Part Three

Domaining MBA MondayWelcome to Part Three of what might just be the most popular series I’ve ever written on my blog – Selling Domains To End-Users. In case you missed parts one and two please make sure to read them before diving into this article. Part Three has some of the juicy details you’ve been waiting for, negotiating and closing the deal. Finding an end-user that is interested in your domain, or making it easier for them to find you is only half the battle, closing the deal is what separates those who sell domains, and those who try to sell domains.

I don’t mean to sound harsh but this is how it goes. If you want to sell domains you have to have some sales skills. I can’t teach you all of them but in this series I do try to provide some fundamentals, think of this final segment as the icing on the cake. Before I go any further I just want to remind you that every domain is different and every buyer is different, this means that you should take what you have learned in this series and make sure to apply it to your specific situation.

Now let’s end this series with a bang and get you negotiating deals like the real sales dog that you are, or that you need to be. As I said previously in this series, if you aren’t a salesperson, don’t fear, just hire someone who is and know your own limitation. If however you are ready to throw your hat in the ring, follow this advice and make sure you’ve seen Glenngary Glen Ross recently to get you pumped up.

The first rule of domain sales is:

“Don’t be the first one to name a price”

While domains with fixed prices may sell quicker, if you want to get top-dollar for your domain you’ll want to push the buyer to make an offer. This goes beyond domain sales and really extends to sales as a whole. The logic here is that you never know what price your buyer has in mind. You may be thrilled to sell a domain for $2,500 and if you listed it with a fixed price of $2,500 that might happen very quickly. However, it takes finding a buyer who throws out a $5,000 offer (their low) to make that $15,000 – $20,000 sale you have been dreaming of.

Here’s a real example from a friend of mine who wishes to stay anonymous. He wanted to buy a domain and had an $150,000 budget for the name, but was hoping to get it for somewhere in the $50K – $100K range (yes, it was an awesome name, still is!). He contacted the owner who said they didn’t know what price they wanted to sell it for or if they were even sure they wanted to sell it. Knowing the first rule of domain sales my friend refused to throw out a price, the domain owner held strong and also wouldn’t throw out a price.

Now a month later my friend contacts the domain owner again. This time he gets on the phone and really pushes the guy to name a price. Remember, my friend has an $150,000 budget but would consider $75K a deal. Hesitantly the domain owner says, “would you be able to pay $2,500?” Get my point?

Like I said, this may be contrary to what you have read other places and let me make sure my point is clear. If you want to sell domains quickly, name your price, but if you want to get top-dollar for your domains then never be the first one to name a price. This brings me to the second rule of domains sales:

“Know your buyer”

If someone contacts you out of the blue, don’t just start negotiating, learn more about that person. The Internet just so happens to be a darn good research tool and you should use it. The #1 tool you’ll need in your arsenal is Domain Tools, I can’t survive without it and once you start using it you won’t know how you did either. Use Domain Tools to determine how many domains the person owns, what names they like to buy, where they have bought previous names, get as much information as you can.

One of the things that always surprises me is when someone doesn’t even do a simple Google search on their prospective buyer. You can learn a heck of a lot about people just by doing a simple Google search. Knowing your buyer can help you determine one very important piece of information, their budget.

Last but not least, I’ll end with the third rule of domains sales:

“Don’t be an asshole”

Pardon my French here but there’s really not any other way to say it. I’ll be honest, Domainers can be assholes, someone will contact them about buying a domain and they will say, “Take a hike, you can’t afford this name,” or “I want more than you can probably afford.” They will say this because they think it filters out the tire kickers. What this does is actually filters out some of the potential top buyers. Here’s an example.

I was helping a startup with a $350,000 budget buy a domain a couple of months ago. They had contacted their first choice domain owner directly before bringing me onto the deal. It was the domain they wanted the most and they were willing to go up to $350,000 for the domain. However, when they contacted the owner he was a total asshole to them, and the CEO of the company decided that they just didn’t want to do business with someone like that. So they went with another name which they are very happy with, and yes, they did pay the full $350,000 for the name.

I saw the domain they wanted at first in a recent domain sales list, it sold in the $60,000 range. Ouch. That domain owner lost out on about $290,000 in a potential deal that would have been easy as pie for them to complete. However when they were contacted and asked about pricing they were such an asshole that the buyer didn’t want to deal with them. Don’t make this mistake and be a normal person, you know, like you are in real life.

There’s a good chance that you’re missing one of these three rules above, if so, fix it. Now let’s talk about the art of negotiation, this one I’ll keep short and sweet. Get on the phone with your buyer whenever possible. Businesses don’t do business with businesses, people do business with people. There is nothing personal about email, but there is about a phone call and this is your chance to really get to know someone a bit better. I’m not saying you have to become best friends, but at least you can both make a little better connection with each other.

Don’t try to follow any script on the phone, there is no secret to having a good phone call with someone. Just be yourself, tell them a bit more about who you are and take the time to learn about them. At the end of the day you should be providing a person or company with a domain that will pay itself back tenfold in marketing savings, so be fair, but price you names at what you think they are worth. If a buyer can’t afford it, don’t tell them to get lost, try to work it out. Lease deals are always a great option and I’ve done deals where I take some cash and some equity in the company if I really believe in what they are doing.

Just remember, selling to end-users will almost always take longer than selling to other Domain Investors, but it will also almost always mean more money. There is one, maybe even two people in the world who value your domain above all others, find them or wait for them to find you, that’s the name of the game. You own a piece of the Internet, every domain is unique, it’s up to you to sell your domains for what they are worth.

 

{ 12 comments… add one }

  • Rob November 26, 2012, 10:34 am

    Thank you for taking the time and energy for this fantastic information. Grateful.

    Reply
    • Morgan November 27, 2012, 7:50 am

      Absolutely, really glad you have enjoyed this series @Rob!

      Reply
  • Perry November 26, 2012, 11:19 am

    Hey Morgan,

    Loving this series.

    Quick question: I’ve seen it everywhere: Don’t name a price first. But if you’re contacting end users and pitching them, this makes the task much more challenging.

    Do you have any advice on how to avoid naming a price when pitching to end users? Is that even possible?

    Thanks,

    Perry

    Reply
  • Arseny November 26, 2012, 11:22 am

    Morgan thanks for sharing your tips! But what about the situation when the potential buyer asks “what’s the price?”

    Reply
  • Louise November 26, 2012, 8:10 pm

    The third rule is great – all domainers pay attention! That seller lost six figures because of being abrupt.

    Reply
  • Tim Davids December 5, 2012, 4:21 am

    Good stuff Morgan. I tried to buy a name two weeks ago from a guy that was a D@@k from the first contact. He lost a 10k sale. In this case I actually found a better name for less than my budget.

    This week I got a 5k offer on a name I turned down $1000 on a month ago.

    Your spot on with this article Morgan.

    Reply
  • Kevin December 23, 2012, 6:58 pm

    Really tricky working with Afternic when they email o/b/o a buyer asking you to “set” a price 🙂

    Awesome series ~ thanks, Morgan

    Reply
  • Bonnie Wheatley December 26, 2012, 7:20 pm

    Morgan, I cannot thank you enough for this series. What a great help. I have to put your tips to use!
    Thank you so very very much!

    Reply
    • Morgan December 27, 2012, 8:05 pm

      Thanks @Bonnie really glad you are enjoying it!

      Reply
  • HowieCrosby April 17, 2013, 1:59 pm

    Good times, very informative. You mentioned a DomainTools end user list alongside “know your buyer” Do you need to be a full subscriber to access this end user info please? Cheers Morgan.

    Reply
  • MarkPollitt November 15, 2014, 7:07 am

    Please share your thoughts please on the new TLD name extensions.

    I am investing in some names

    like http://www.321.trade http://www.now.cab http://www.mancity.blue

    any input welcome

    Reply
  • Cornelius Murphy February 9, 2017, 6:24 pm

    Hi Morgan,
    This 3-part series is excellent and I love to save articles that provide excellent value and then re-read them over and over. Thank you for sharing your wisdom with us all.

    Coming from a sales background of 38 years with UNIROYAL, EASTMAN KODAK and finally XEROX, you absolutely nailed several key points and I’ll identify three of my favorites below:

    1) do some research on whom you are speaking with . . . homework goes a long way.
    2) keep your ego in check and don’t be a jerk or you’ll blow the deal.
    3) when you are on the phone, forget the script, simply be yourself . . . make a connection.

    Looking forward to more of your wisdom and thanks again.

    Cornelius Sean “Neil” Murphy
    http://www.murphy-llc.com

    Reply

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