Domain Acquisitions: Affordability versus Budget

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Domain investors, pay notice: your targeted buyer is about to pull the trigger, and how you perceive their wealth can make or break your ongoing domain negotiation.

Let's begin with some information on a common mistake domain owners make when they quote a price for a domain:

The size and wealth of a buyer's company or venture is not proportionate to their domain acquisition budget.

There are large companies out there with a very limited budget allocated to marketing and branding, and that includes domain names. There are also midsize or smaller companies that proportionally budget up considerably more.

What sets aside affordability and budget depends on the type of research domain investors must perform on their targeted buyers before hammering down that asking price.

Consider your buyer as a knowledgeable, budget-driven representative of a company who won't simply open up their wallet to the first figure you come up with. And if you make the mistake to quote a high number just because of the company's finances, you might lose the opportunity to negotiate effectively.

There are a couple of strategic points that place more emphasis on the domain's value, and less on its valuation.

Instead of trying to justify your presumably high asking price, present your buyer with the many benefits they'll reap from acquiring this domain name. Instead of putting a sticker on the domain, ask your buyer to price it based on the unique characteristics they'll enjoy from this acquisition.

While it is true that you risk leaving money on the table if you underprice your domain, you also risk losing the sale outright if you overprice it.

What determines the starting point is the price quotation. You'd be at an advantage if they are the ones placing an offer based on your factual assessment of the domain's value, as it specifically applies to them. Remember the old quote: whoever mentions a price first, loses the game.

Because a budget doesn't match the perceived affordability factor, hearing the numbers as they arrive from your buyer when the negotiations truly begin. Keep in mind that if the numbers are off, the right buyer always returns later with a better offer; don't shut down all options for future negotiations just because there was no agreement on the numbers.

Adjusting these numbers from that point on is where your negotiations skill will shine. Once you know that you possess an asset that the other party is willing to acquire based not on affordability, but on budget, you are able to free yourself from the constraints of greed.

Corporate budgets do increase, and you should never react under pressure to sell any asset. Do your research, and respond in a manner that showcases your skills as a negotiator.

In a nutshell: Not every large company has a large budget for domain names. Determine their budget and decide if the sale is possible at that price point, and at that point in time.

The information contained in this blog is provided for general informational purposes about domains. It is not specific advice tailored to your situation and should not be treated as such.

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