How to Negotiate Buying a Domain Name

Acquiring a good domain name is integral to the success of your business. There’s a good chance that your lynchpin domain that meets all your company’s brand goals is already taken. Domain sellers are armed to the teeth with sales knowledge and buying experience. Make sure you don’t have your seed investment sandbagged with a large payout that could have been bargained down, or even worse, lose the domain entirely.

This series focuses on the three main steps required for startups to lead successful negotiations:

  1. Research – Perform in-depth searches for various types of information to determine how outreach will be conducted, and to prepare for all possible scenarios during the interaction phase.
  2. Outreach (part II) – Based on your research, we’ll go over when and how you should contact the domain owners, and what tracking tools you should use.
  3. Interaction (part III) – Everything builds up to this point in time. Your research has prepared you for this, and the outcome of your first contact with the seller will give you more information on how you should conduct yourself.

In this article we are going to outline the research questions that will eventually determine what actions you should take during the outreach and interaction phases. Establishing your own shopping parameters, gathering background knowledge on the domain, and learning more about the seller can go a long way. It’s never a good idea to play catch-up after a negotiation has started. Make sure you’ve gathered all of the necessary information before contacting the owner.

  1. Domain Market Value
    • Price History – Search NameBio and DNJournal for similar keyword domain sales to get a ballpark on what you should expect. You may find that it was purchased or flipped recently, which is invaluable information.
    • NamePros – Read their Domain Evaluation and Appraisals Guide to understand the factors people take into consideration when estimating the resale value of a domain. Even ask the community for a free domain appraisal before buying it. Full Disclosure: I’m the Senior Director at NamePros, but I sincerely believe this is the best place to learn about domains and their value.
    • Appraisal Tools – Valuators like Estibot and Epik’s appraisal tool provide some loose knowledge and stats on what you should expect the seller to quote. While these appraisal tools shouldn’t be used as a stand alone metric for price in any respect, they still give you a good jumping off point. They also come in handy as an additional negotiating point when the seller’s price is vastly different.
    • Google Adwords Keyword Planner – Insert the domain’s keywords and see what the CPC, competition, and average monthly searches are. Quite often, a domain’s organic traffic will determine its value.
    • TLD Market Value – Use DNPric.es’s Stats by TLDs section to gauge the pricing relationship between different TLDs.
    • Social Media Accounts – If all its handles are taken, let the seller know that it will be more difficult for you to create a social media presence without them in order to drive the price down.
  2. Trademark Issues – Search the US Patent and TradeMark Office’s TESS website for possible trademark issues. You should avoid purchasing a domain that potentially infringes on IP.
  3. Domain History – You should find most of your information when performing your Domain Market Value assessment, but be sure to aggressively search the domain on Google as well.
  4. Seller History
    • Quantify of Domains – Use DomainTools.com to see how many domains they have in their portfolio. If it’s only a few, you may be in luck. If it’s hundreds or thousands, get ready for a long negotiation.
    • Domain Forwarding – Where does the domain forward? Here’s a list in order of lowest to highest price expectations. Depending on who owns it, the price will be higher:
      • Not forwarding anywhere
      • Parked
      • States sale price
      • Broker
      • Developed site with little or no traffic – If the owner operates a website on the domain, gauge the traffic and potential revenue of the business. It’s guaranteed that the owner will use this information to increase the domain’s price.
      • At auction
      • Part of a large portfolio or domain inventory company
      • Developed site with good traffic or established brand
      • States not for sale – You shouldn’t give up at this point, but be prepared for an extremely high price tag.
    • Track Record – Determine what type of negotiation tactics you should expect by googling their email, name, company, and address to see what comes up. If they’re a domainer of any sort, try searching NamePros with their name, company, or email to see if they have a trader rating.
    • Contact Info – Find their details by looking at their:
      • WHOIS Info – This should yield the required information immediately. If they have privacy on the domain, contact them through it as a last resort.
      • Website
      • Parking – If it forwards to a parking site and there’s no link to a sales page, you’ll have to settle with WHOIS info.
      • Auction – If it’s at auction, see if there’s a way to privately contact the owner through the platform and note it for later.
      • Domain Inventory or Broker – Note the URL and price for later. Don’t submit a bid.
  5. Your History – If you or your business has a prominent presence on the internet, you may want to reconsider using your personal details when contacting the owner. If you don’t feel like going through the rigmarole of masking your email, phone number, and name, consider employing a broker. Brokers and masking your info will often help you avoid price gouging.
  6. Deal Points – Know the minimum and maximum amounts you’re willing to spend before starting the negotiation. I’ll cover creative financing and other options in the last segment of this series.
  7. Alternatives – There is always the possibility that this deal won’t pan out. Being able to easily walk away from the negotiating table grants you more leverage than your counterpart. Letting the person know that you have other options should make them worry about the stability of the deal. I won’t go into the full process of finding a name, but here’s two suggestions:
    • Domain Suggestion Tools – Search sites like Domainr.com for ideas.
    • Domain Submissions – Put a descriptive listing on the Domain Names Wanted section at NamePros and include this info to receive more results.
  8. Alternate TLDs – If they’re available, buy them and let the seller know that they were available to register and no one wanted them. This will lower their bargaining chip and ability to also sell the alternate TLDs to you. This is a small investment to make if you use GoDaddy coupons. Warning: Don’t actually build a brand on these alternate TLD names as you’ll only decrease your ability to negotiate with the original domain owner.
  9. Timeframe – Create an acceptable timetable for purchasing a domain if you don’t already have one. Remember that negotiations can take months and even carrying out a transaction can take weeks. Adjust your schedule accordingly and solidify a deadline in the immediate future that you can relay to the domain owner to help speed up the transaction.

Gathering this research and following through with the other two phases is a time-intensive process, but it is crucial to have a long-term strategy when procuring a domain name.

If you have any questions, know of something you’d like me to address in the next segment, or have personal tactics you’d like to share, please leave a comment!

Checkout part II of this series next week when I cover how to contact different types of sellers.

{ 5 comments… add one }

  • Vinod July 16, 2015, 10:30 pm

    Wonderful Article. Thanks for sharing

    Reply
  • Ulterios July 27, 2015, 3:43 am

    Nice article with some great info here Edward !

    One thing that that I have found is that many people who want to create something, a website, business, etc., do not do enough research into what can help their success. This information in your article above can be a valuable asset for doing research. It’s nice to have so much valuable information in one article.

    I do think that many people don’t realize just how important something like a domain name can be to the success of that business. My belief is that a lot can be said with a great domain name. Something that stands out from the crowd and helps you get noticed can really contribute to the success of a website, business, etc.

    Based on this thought, research is a huge part of finding out exactly what domain name will be best for what you want to achieve and the message that you want to convey. If someone is willing to do the needed research to find what best fits their needs, then that can help greatly.

    These days everyone wants to go the easy route. I say do the needed research and it will surely pay off!

    I just wanted to say thanks for the nice article and providing some valuable info. here!

    Reply
  • elevator July 27, 2015, 4:13 am

    Good article, but I want to remind you that there no two equal domain names though there are killer domains but nevertheless, there are no two equal domains; you can compare but each of them have their intrinsic values.
    Thanks and cheers.

    Reply
  • Edward Zeiden July 27, 2015, 11:33 am

    Thanks for the kind words, Ulterios. Regardless of what someone is doing in life, if it’s important, they should research it first! Glad to be of any help.

    Reply
  • Ulterios July 28, 2015, 1:55 am

    You are most welcome Edward.
    I think the information that you provided above can be a very useful guide to help people in their research in finding the needed information.

    When in a negotiation in buying a domain, being armed with relevant information can be a powerful business weapon.

    When someone is considering buying a domain, reading articles like this can help people get information that they can use in their negotiation. It also help to reach out to other people in the domain field/business and get some information to help with negotiations. A great place to find good quality information that can be used in negotiations is at NamePros, as you had stated above.

    Arming yourself with good information can be the biggest factor in negotiating that big domain purchase.

    Thanks again Edward for the great article & information resource.

    Reply

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