Several times a week I get questions asking my opinion of what to do at certain stages of domain name negotiation. While I’m no Rick Schwartz or Mike Berkens, I think I’m asked so often merely because I come across as approachable. I haven’t sold a name yet for six figures yet but I feel like I haven’t ever had a name or buyer that those type of numbers would be reached. Yet after looking at who bought the names and what they did with them I feel comfortable that I didn’t leave much money on the table. With an increase in the quality of my portfolio I have no doubt that day will come but in the mean time I’m getting there in small parts. But the questions keep coming so I thought I would write a little summary of how I approach my domain sales. Negotiation is both an art and a skill and every negotiation is different, but there are some things that I feel if you keep in mind will lead to a better result.
1. Control the negotiation. You own the domain so you are in control of whether or not the domain is sold. The old thought that the price will be less if the seller puts out the first number may not be necessarily true. According to this piece by Adam D. Galinsky of Northwestern’s Kellogg School of Management and Roderick I. Swaab of INSEAD in France write: “In our studies, we found that the final outcome of a negotiation is affected by whether the buyer or the seller makes the first offer. Specifically, when a seller makes the first offer, the final settlement price tends to be higher than when the buyer makes the first offer.” Everyone always says that if you put out a price then you could leave money on the table. This is true if you are talking millions. But in reality, most offers are going to start low anyway and you’re going to respond with a much higher number. I’m not sure why skipping to the second response is going to lead to a lesser price. Nobody has been able to show me any data that shows that first offers loses. It’s just something everybody says. To me the most important thing is that is obvious that you are in control of the entire process.
2. Act just short of offended but don’t be an ass. No matter what the offer, counter with higher. Act disappointed with the offer even if you’ve already called your wife and giggled like a school girl. Nobody starts a negotiation with the top number so most likely there is a little more to be had. I’m not good with the “tear them a new a$$hole” method of Schwartz but acting a little put off may work to your favor.
3. Do your homework. Try and figure out who your buyer is so you can figure out what kind of budget they may have. A good buyer will never use their real name and will hide their IP, but many do not. This is one of the nicest features of Internet Traffic is you get all of this data. Their name, email, and IP info.
4. Use your email signature wisely. You can use your signature to make things appear different than they really are. I’m not saying lie, but it never hurts to be creative. Give him enough data to know who you are if that is in your favor or hide it if it hurts you.
5. Regardless of how the buyer acts maintain your professionalism. You are in control, you own the domain. There’s no need to let emotions get in the way of a possible sale. Low bids and trying to devalue your name is a negotiation technique, not a personal insult.
6. Use time to your favor. If they are in a hurry then make them pay to get things done quickly. Don’t negotiate with yourself. Wait for counteroffers. Those that want something hate to wait, it’s human nature, but its also a good negotiation technique. I’ve heard from other domain sellers that some negotiation took 6-8 months with long gaps between conversations. But they did get done and they all were for large amounts.
7. Don’t worry about comps. You domain is unique. They can be used against you just as easily as for you.