Domain Sales Negotiation

[Scott7]

I received an unsolicited offer of $500 on a two keyword .com.au domain name that I hand registered for $20. The page was parked with a buy it now price of $1600.

Before responding, I researched the name of the person making the offer and found that he owned a business in Sydney in the main industry that would have use for the domain. With this information, and considering the likely turnover of his business, I assumed that his offer was an opening one of around half of what he'd be willing to pay. I then countered, politely and respectfully, with $1200, again assuming that he would reply with an offer between $800 and $1000.

Wrong! After that he would not reply to any of my correspondence. Now maybe he had just changed his mind and wouldn't have purchased the domain even if I had accepted his initial offer. I can't be sure.

While I realise that this offer is loose change compared to the sort of negotiations and sales dealt with by some of the regular contributors on DNT, for me it was a big disappointment at the time. I would be very interested to hear some of the sales negotiation experiences of others and any advice that members have for such occasions.

 

[geodomains]

Put it down to experience as it happens to all of us. It's happened to me and I'm sure others on the forum.

You can always email the person back and say you re-considered the offer and would be happy to sell for the price offered.

Don

 

[helloworld]

Yea. I wouldn't do that. Have some dignity and wait for him to respond

 

[geodomains]

Yea. I wouldn't do that. Have some dignity and wait for him to respond

Thanks

 

[Erwin]

I would reply if you thought it be a good thing to do..
We all make mistakes & it might just make your Xmas shopping budget a little easier.
Congrats on a good hand reg!

 

[James]

You could reply and say you have another interested party at $900 and will close at $1000...yet this can also backfire...some times its worth picking up the phone and talking to the buyer.

Personally I would just say $880 is a fair price offer that and don't chase them as it sounds desperate.

I would also wait as it's a very busy time of the year, some deals take days, some weeks and some months!!!

 

[Data Glasses]

You may yet be surprised , hang tight, i have explained "we both know this is the best option for your business" in the past and sometimes they come around, the seed has been planted ...... let it grow

 

[neddy]

I would be very interested to hear some of the sales negotiation experiences of others and any advice that members have for such occasions.

First rule of thumb is don't panic! Buyers have an uncanny knack of smelling it.

Second, decide how badly you need the dough. If you are desperate, then Don's advice is good. Email them back, and use "Christmas" as a reason why you will "reluctantly" accept their lower offer. Leave it open for acceptance for 48 hours.

If you're not desperate, then Spacey's advice is spot on. You've planted the seed. Bear in mind it is Christmas - maybe the buyer is now out of "business mode", and will probably revisit it in the new year.

And finally, go back to first rule of thumb.

 

[Shane]

Now maybe he had just changed his mind and wouldn't have purchased the domain even if I had accepted his initial offer. I can't be sure.

I've had a few like that. They get excited and make an offer, then once you agree on a price they just disappear.

IMO, if someone has come to you with an unsolicited offer of $500 then it must be a half-decent domain. I'd hold tight for now.

 

[helloworld]

Thanks

Heheh sorry Don. That sounded worse than it was. I wasn't having a dig.

Just from a buyers perspective hehe

 

[snoopy]

Just reading true story above I would say $500 is along way from $1200 so I would not assume the negotiation is going to work out. It is probably a 30% chance or less.

In my view,

-50% of people who make an offer or agree to buy will not pay.
-Some % will be willing to go higher
-Some % will not budge
-Of the people who won't budge some will move onto other names as soon as you say no or counter.

The only think to assume is that you won't really know what is going on most of the time. Best to just accept that you will have a big % where it won't work out.

 

[FirstPageResults]

Not uncommon for them to come back in 6 months.

My strategy is usually similar to what you have done already. I will come down on my initial offer to indicate I'm willing to meet halfway.

Say they come up $250, then I'll drop my price $250ish.

If I don't hear back, then I assume they aren't willing to negotiate.

I've found that works the best, and seems to weed out tyre kickers.

 

[snoopy]

Not uncommon for them to come back in 6 months.

I think a lot of sales happen this way, but for every $500 offer I'd say the vast majority do not come back later. The thing with it is is, you have to be happy to let the sale slip by if you are going to wait it out, because mostly it will slip by.

They are literally testing you with that method, and the people who pass the test (i.e. wait months for them to come back) are usually the ones who don't care that much about the sale.

 

[Scott7]

Thanks very much to everyone who has shared their experience, knowledge and advice. Much appreciated. It is great to learn from those who have already travelled the journey.

 

[Philip Littlewood]

Scott,

For what it's worth, I would agree that Buyers (and some Sellers) are a fickle bunch, and having been involved in hundreds of sales and thousands of negotiations, the advice you have been given here is spot on.

More times than not, when a Buyer offers $500 for a domain that we are selling around $1500, we have already written in some "fat" and I assume that the buyer has done the same.

Your approach so far has been exactly what I would have done, and 70% of the time you should expect a further counter offer.

You should never second guess what the prospective buyer might do, and try not to get too emotionally attached to the sale.

This is all so much easier for me to say when it's ultimately not my asset nor my money.

 

[findtim]

GREAT advice above.

"the last to speak looses " , meaning do not chase them, when they come back you are in control, if they don't come back it was never going to happen anyway.

tim

 

[snoopy]

GREAT advice above.

"the last to speak looses " , meaning do not chase them, when they come back you are in control, if they don't come back it was never going to happen anyway.

tim

I don't think there is any rule here. It seems to me though that the very big sellers, like domainnamesales and buy domains do tend to chase people.

Have tried both methods and I don't really know. I suspect for small sales it is probably better to chase them down the street and high value names it is possibly better to wait. Again, I don't really know.

The other thing is there is definitely some degree of sales to be had by coming back to them. Some people do just give up but would buy if contacted with a better price. Of course doing that will also result in lower prices on some sales.

 

[findtim]

Some people do just give up but would buy if contacted with a better price.

i agree mostly with you snoopy, " time brings options " if someone has contacted you then who else might be interested ?

dubbodentist, sydneydoctor, geelongplumber ?

be fair and respect they contacted you first but set a time limit on your offer price.

thats the " call to action " , contact them and say " just letting you know my sale price ends in 3 days " , thats your " fear of loss " also the "xmas" idea is a good one, and if you then sell to a competitor at least you did make contact first and its recorded.

tim

PS: May is also a good time to revisit people as you have them dumping money for tax reasons ( i don't sell domains but this is what i find for web dev sales )

PPS: i pitched a webdev this year in January, last month i get a phone call and the guy says " i'm ready now " !!!

 

[Rhythm]

Wrt to time limits, I have a dumb question:

Should the time limit length reflect the offer price length?

Eg hypothetically:

1 week for <$1000
1 month for <$10,000
1 year for >$10,000

 

[findtim]

Wrt to time limits, I have a dumb question:

Should the time limit length reflect the offer price length?

Eg hypothetically:

1 week for <$1000
1 month for <$10,000
1 year for >$10,000

IMO, no, if you can not make a decision in a month then that is their decision "no"

i've said it before so this turns into a story:

----------------

i had a person working for me on sales for advertising on 1 of my sites, each week she'd report " ohh bla bla are a maybe, yadda yadda are getting back to me next week, who who are talking to the other partner................... etc "

so i told her " go out and get MORE , no's "

in sales you don't want maybe's , you want decisions, it is either a YES or a NO , a maybe = "NO..... and i am going to waste more of your time with lame excuses......"

price has nothing to do with the sales process.

if time plays a part then you are talking to the wrong person, you need to get to the decision maker, if its a $50k domain then it may have to go through a process but time limits need to be set, just say " thats ok, take your time but this domain is now back on the market "

take my advice as general salesperson techniques and NOT domain sales but i think the same rules apply.

tim