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Buying a Domain Name from a 3rd Party Introduction: Locating Domain Names to Buy When looking for domain names to buy, you may find it productive to undertake a similar research process to that you would follow if you were going to register an available domain name. However, once we start talking about involving a 3rd party, other factors must be taken into consideration:-
Let's take a specific example: you own a medium-sized business selling car parts. This information, coupled with your own experience, has shown you that the likelihood of finding a simple, memorable domain name relating to your industry still available is zero. However, if you decide that you can afford to spend up to $1,000 on securing a suitable domain name, here’s how. You draw up a shortlist of names that you would be happy to use for your online site (none of which are currently available):
Now it's time to start honing your list down to the top one or two candidates. To do so, you need to examine the use to which the name is being put. Try and visit each domain name on your shortlist by typing it into the "Address" bar of your browser to see if it has a site associated with it (remember to try both DOMAINNAME.com and www.DOMAINNAME.com as sometimes only one of these is associated with a site) If there is a site associated with the domain name, is the site…
If the domain name is not currently pointed at any web site, this at least tells you that its owner is not making any money off of the domain name right now. Maybe there used to be a site at that domain name, or maybe the server hosting the site is offline - but whatever the reason, the domain name is currently gathering cyber-dust, which should make it that little bit easier to close a sale. The Initial Approach There are various ways to approach a domain name purchase. Your choice will be tempered partly by what status the domain name is currently in. Note that there is no single "right way" to approach a domain name purchase, so you'll have to choose the way that you feel more comfortable with, taking into consideration your situation and the status of the domain name you're looking into buying. The following should give you plenty of ideas you can draw on and adapt when making your own deals. 1) The Casual Inquiry If you want to "flush out" a seller i.e. try to find out if they have an interest in selling their domain name, and if so, at what price, then a short email along the lines of the following may be all that's needed: Hello, I see that you own the domain name Domain.com but that you are not using it for a web site, and I was wondering what plans you had for the name. Regards, FirstName The approach email will obviously need to be different if the domain name is in use for an active site, but the above covers most of the cases in which the domain name is not currently being used.Notice that there is no mention of your interest in BUYING the domain name. As soon as you insert the word "buying" into your email, you'll find that you're magically inflating any price quoted to you. The word seems to trigger a reflex in people by alerting them that something they own may actually have "value" (since after all, somebody wants to buy it off them) and therefore the price they will quote to you will be higher. It's a good strategy to open a free email account which you will use specifically to initiate a first approach to a domain name owner, especially if you work for a large, well-funded company. Many sellers will automatically put the price up - sometimes way, way up - if they think a buyer has deep pockets. By approaching them from a free email account (don't set up your free account to send out your full name), and by signing your email with your FIRST NAME (so that savvy sellers can't research you on the Web), you're removing any "alert signals" that might cause the seller to start raising their expectations and their prices. Think of it like this: who would YOU expect to pay more for a domain name: John of Nowhere, Nebraska or Bill Gates of Microsoft? Plus this also gives you a way to make a more formal approach under your "corporate guise" at a later date, without necessarily needing to divulge that you've been in contact with the seller before. There are two main problems that may arise from sending this type of casual question. 1) The domain name owner may not take the request for information seriously (precisely because it's worded so casually) and will therefore not respond to your inquiry. 2) The domain name owner may respond with a hugely inflated price just to "test the waters" and see if the inquiry was real. However, if you followed the advice in the "Help" box, you can wait a few weeks and approach the owner again, but this time under a different identity (possibly even under your own company's identity) and see if that can trigger a more positive response. Of course, the owner may also respond without actually quoting a price... in that case, you can proceed with the dialog using one of the other tactics on this page (while taking into account that you're already in discussion with the seller.) 2) The Lowball Initial Offer This tactic will generally only have a chance of success if the domain name is not currently in use. Instead of sending out a bland email, send out a very specific email and slip in a suggested price which is much lower than you are actually prepared to pay (though not so low as to insult the domain owner's intelligence - you're not going to buy the next Business.com for $100!) Here's one way you could word the email approach: Hello, I/We see that you own the domain name Domain.com but that you are not using it for a web site. I/We are currently looking at acquiring a domain name for my/our business/website and your name, Domain.com, is on the short-list. I/We have $500 budgeted for acquiring a new domain name and can close a deal quickly. Please could you let me/us know if Domain.com is for sale, and if so at what price? Regards, FirstName Lastname The best thing about this approach is that you may get lucky! If the seller doesn't have any particular use for the name, but the cash sounds tempting, you may well get back an email saying that the domain name is available at $500 (in the case of this example - remember, generally nobody is going to accept less than you've already indicated you can spend!) By making your initial offer at a level well below your real domain name purchasing budget, you've then left yourself with room to maneuver if the seller comes back with a response that they're interested in selling, but that the amount you're offering is too low. After that, it's all down to negotiation! 3) The Attractive Offer If you have deep pockets for a domain name acquisition, and you really want to secure one particular name, you may close a deal very quickly by making an opening offer that will really get the domain name owner's attention, and backing it with your corporate credentials. The downside of this approach is that you have destroyed any chance of getting the domain name "cheaply", and you've tipped your hand to the domain owner that you've got plenty of money to spend on the purchase. On the other hand, the vast majority of domain name owners (when faced with a very good offer of cold, hard cash) are unlikely to turn it down... so you may ultimately end up paying less - and certainly spend less time over the deal - than if you'd worked your way through the negotiation starting at a low price. Here's one possible email format, though of course this would have to be VERY SUBSTANTIALLY modified to suit your particular circumstances:- Mr. X [See if you can find out the domain name owner's details from the Whois record] I represent the company Large Company, Inc. and have been tasked with acquiring a domain name for our new business portal to be launched [date a few months from now]. Your Domain.com domain name is at the top of our shortlist of names, and we would be prepared to pay up to US$10,000 to secure this domain name. Time is of the essence since we need to secure the domain name by [date much closer to now] so that our Corporate Communications department can prepare the relevant logos and letterheads. I am available to discuss this transaction at the number listed below, and I look forward to your reply. Yours sincerely,
FirstName LastName By combining an attractive offer with the pressure of a tight deadline to close a deal, you're effectively condensing the negotiation process to a few hours or days. This approach won't net you the next "Business.com" for $10,000 even in today's depressed domain name resale market, but it should be sufficient to close a deal on 99.9% of currently unused domain names. Whatever initial approach you take, this is just the beginning of the domain name acquisition process. You still have to negotiate an acceptable deal and work out the payment and domain transfer specifics. Negotiating a Deal The leeway you have to negotiate a deal for a particular domain name depends on a number of factors, including:-
Like any business transaction involving goods without a preset price tag, the success of any domain name deal you close will depend in large part on your ability to bluff your opponent into accepting less money for the name than you would ultimately be prepared to pay, while at the same time convincing them that they have a good deal. At the end of the negotiation process, both parties should be able to walk away satisfied.
DOMAIN NAME NEGOTIATION TACTICS 1. Ask for more information A request for additional information can sometimes prove very productive in the course of a negotiation, especially if you can ask for information that the other party doesn't have available! For example, if you know that the domain name is not pointed at a "live" site (and therefore that the owner cannot have any idea of the traffic it is receiving), ask them:
With a bit of luck, you will get back a reply to the effect that the owner doesn't know how much traffic the domain name is getting, since they're not currently using it - or even that they don't understand why it should be getting traffic at all! At this point, you can take advantage of the fact that you have successfully wrong-footed the seller in order to make them accept a lower offer than they might otherwise be willing to consider. For example:
2. Make sure time is on your side One effective way to end a back and forth negotiation at a price that won't leave your wallet bleeding is to inject a sense of urgency into the proceedings. This can be done using any number of pretexts: "I have been tasked by my boss to secure a domain name for the new site within the next X days", "I am looking at a number of domain names, including yours, and I need to make a decision on how to spend my $1,000 budget within the next X days" and so on. Judicious use of a fast-approaching deadline can be enough to make a potential seller blink and accept a lower price than they might ultimately want, out of fear that they might otherwise lose the deal completely. REMEMBER: You can play on the psychology that for many people, guaranteed money today is worth more than the possibility of more money at some later date. 3. Make it very easy for the seller to get their money You may be able to keep the price of a domain purchase down by taking a risk. By gambling that the seller is honorable and will go through with the transaction after they've received payment for the domain name, you may be able to make the transaction quicker and more affordable. If you have access to an instant payment system such as Paypal, you can offer the seller some or all of the money for the transaction up front. For example: If you're willing to accept my offer of $1,000, I am happy to Paypal you the money immediately. Once you have received the money, we can then discuss what the simplest way of transferring the domain name would be. 4. Make good use of your "partner" Sometimes, referring the transaction to a "difficult partner" can help you secure a better deal. For instance, you might respond with the following: While I appreciate that you are looking for more money for your domain, I will need to discuss this with my partner before we can decide if we can afford to increase our offer. Leave it with me, and I will get back to you within a few days as soon as I have had a chance to discuss this with him. After allowing a diplomatic 2-3 business days to elapse, you could follow up your earlier email with something like the following:
REMEMBER: You can introduce your "difficult partner" at any stage of the negotiation, so long as you don't paint yourself into a corner in earlier emails by stating that you're doing the domain deal alone. It doesn't have to be a business partner - a thrifty spouse can also play the deal closer/killer role admirably. A final word If you took the advice in the previous section and concealed your identity behind a free email service and an innocuous name, you've always got a second chance even if the current negotiation flounders. Just wait a few days, set yourself up with a new identity/persona, and try a different approach to see if that will get you further... Completing the Transaction The negotiation is over. You've agreed a price for the domain name that is acceptable to the seller. Now all that remains is to complete the deal, and ensure that you get the domain name and that the seller receives their money. The following checklist will help ensure that the deal passes off smoothly. 1. Clarify the terms of the deal If the negotiations have been prolonged and have involved a lot of emails back and forth, it's possible that the specific terms of the deal have become scattered across a number of emails. As soon as you reach an agreement with the seller, it is good practice to send a fresh email summarizing the terms of the deal, and ask them to confirm it: To make sure we're both on the same wavelength, I've summarized our discussion below. Please confirm this email so that we can proceed quickly with the transaction. I agree to purchase the domain name DOMAIN.com (for which you are the current registered owner) for a total amount of US$XXX. I further agree to transfer 50% of the money ($YYY) in advance of the transaction, as a deposit. Upon receipt of this deposit, you agree to begin the process that will transfer the registration of DOMAIN.com under my control. Once DOMAIN.com is under my control, I will transfer the balance of the money within 7 business days. By replying to this email, you confirm that you accept the above conditions. 2. Determine how to pay for the domain You need to decide as early in the closing phase of the transaction as possible (if it was not already clarified during the negotiation process) exactly how you will pay for the domain name. Sometimes, circumstances will dictate what form payment will take. For example, if you are based outside the US, you may not be able to write a check in US$. Similarly, a buyer may not be willing to accept a personal check, but may insist on a corporate check or banker's draft. If you are in a hurry to secure the domain name, try to use an instant payment system such as Paypal . That way, you can send funds to the buyer within hours of closing a deal, rather than having to wait several days for a check to arrive (and many days more for it to clear - many sellers are, unsurprisingly enough, very cautious when it comes to money...) 3. Transfer control of the domain name The exact transfer process will depend on which registrar the domain name is currently registered with (each registrar has a slightly different process for handling domain transfers). Nevertheless, the transfer process will usually take one of 3 forms:
4. Confirm the transfer Once the transfer has completed, be sure to confirm the status of the transaction with the seller. Remember to change the password on your account (or transfer the domain to a different account) if you had to give the seller access to your registrar account as part of the transfer process (e.g. RegisterFly.com requires both a username and password to effect a transfer). 5. Finish the transaction in style Make sure that you hold up your end of the deal by effecting payment on time, and in full. Once the transaction is over, be sure to send a final email thanking the seller for making the transaction a smooth one (even if you're secretly gritting your teeth because of all the troubles and delays you incurred) - after all, you never know what the future may bring, and you might yet find yourself across the negotiating table with the same seller again at some point! |
