When you sell a domain name outbound vs. inbound, do you end up leaving money on the table?

Leaving money on the table

I was talking with another domain investor last week about the potential price difference you’ll see on average when you sell a domain outbound vs. inbound. There is a real difference between an inbound and an outbound sale, and it really comes down to leverage.

When someone comes to you and wants to buy your domain, you’re the one with the leverage. When you go to someone else and ask them if they want to buy your domain, they have the leverage.

Sure, you can argue about the nuances and talk about edge-cases where you have the leverage during outbound, the reality is, if someone comes to you and wants to buy something, it’s not crazy to think they’d pay more for it than if it were the other way around.

Before I go any further I’ll address the one edge case that’s hard to ignore. If you happen to own a super premium one or two-word .COM, and a company out there exactly matches the name and goes off and builds a billion dollar business, sure – then you might have the leverage since you have a name that is uniquely valuable to them.

That being said, the vast majority of domain investors don’t have six and seven figure premium names, so let’s talk about the normal case, a domain you own that you think is probably worth say $5,000. The question is, by approaching someone directly (i.e. outbound) are you more likely to end up selling for $2,500 vs. if someone comes to you directly could you get $7,500?

Since I’m asking the question it’s only fair that I answer, so here’s my two cents. I do think you leave money on the table, the exact percentage is hard to guess but I’d say it could be as much as 50% when you’re selling via outbound. You just have a lot more leverage when someone is trying to convince you to sell them the domain vs. when you’re trying to convince someone they should buy a domain name.

But that’s just my thoughts, now I want to hear yours. What do you think? Comment and let your voice be heard!

{ 5 comments… add one }

  • Brad Mugford January 15, 2020, 8:54 pm

    You are certainly in a stronger position when it comes to inbound sales.

    However, any time you agree to a deal via any method you are leaving money on the table, unless every sale you make just happens to be the exact max amount the buyer is willing to pay.

    Deals only happen when the asking price is below what a buyer is willing to pay.

    Brad

    Reply
    • page howe January 16, 2020, 5:59 am

      True That

      well said.

      ps any way to not have to login to do each comment.

      Reply
      • Morgan January 16, 2020, 8:23 am

        +1 to that – well said @Brad and good point.

        @page – good question, let me see if there is a way to fix that, does seem like there should be a way.

        Reply
  • Bobby January 15, 2020, 10:31 pm

    I never outbound. They Always come to me.
    I will hold all the power and all the leverage.
    And no sales below $5k ever, even for crap.

    Reply
  • page howe January 16, 2020, 5:53 am

    Velocity and Upgrading

    No doubt prices better on inbound, if you have the names to wait. Plus we all enjoy the power position of being wanted, and chased.

    But for me if its likely an offer in my GO range comes about once every size months, and with the liquidity discount where I can buy a new name, i will often take the outbound number, knowing i can reinvest and upgrade my position.

    So say you have to pass on 6 low or average inbound offers before taking the max one, so it could be three years before you cash out.

    If i sell now, i can turn that money 2-4 times before that ultimate offers comes in, if i can find the worthy names.

    Now im a high volume seller, no doubt doing less sales at high multiples is the perfect way…maybe ill be there soon.

    Lastly, i do this full time so i need to tax my portfolio with personal spend, plus renewals and new buys.. so the lower price provides liquidity.

    In a perfect world, yes wait for the right buyer…. but until i live in the perfect domain world im diversified in my selling method, and i’m not sure if the optimum inbound is always going to come.

    Thanks for the post.

    Page Howe

    Reply

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