April 1, 2019

How to Negotiate a Premium Domain Name Purchase – 10 Proven Steps

written by

Joe Uddeme

Joe Uddeme

How to Negotiate a Premium Domain Name Purchase – 10 Proven Steps

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What’s the best way to negotiate a premium domain name purchase? In this blog post, domain name expert Joe Uddeme shares the top strategies domain brokers use to secure high-value names at great prices. 

Buy A Domain Sell A Domain

Does this sound familiar? You came up with the perfect name for your website, but there’s one major problem – someone else already owns the domain. You now have two choices: find another name… or enter the world of premium domain name negotiations.

If you choose the latter, you’ll have to convince the owner to sell it to you at a price that works for both of you. The good news? There are proven negotiation strategies that can help.

In this blog post, we’ll break down the 10 steps to successfully negotiating a premium domain purchase so you’ll know what to expect.

Before we jump in, we strongly recommend hiring an experienced domain name broker – especially if the price tag is likely to be five figures or more. Domain name brokers can boost your chances when it comes to premium domain negotiation thanks to years of experience and skill at assessing a name’s true value.

They will handle everything for you, ensuring an efficient and effective premium domain negotiation process. But if you’re raring to go and think you can do it alone, this guide covers everything you need.

Key takeaways

  • Research is critical when negotiating a premium domain name
  • Make sure your preferred name isn’t already trademarked
  • Always get a professional valuation
  • Start with a reasonable offer
  • Think laterally when it comes to financing the deal

Looking for a domain name but it isn’t available?

Tell us what you’re looking for, and we’ll explain how we can help.

Name Experts has helped clients secure more than 200 premium domain names in deals totaling more than $150 million. Many of these domains weren’t for sale when we first reached out to their owners.

Part One – Before Negotiation Begins

Years of experience in domain brokerage have taught us it pays to do your due diligence before making your first move. There’s a bunch of things to cross off the list before showing your hand. These five pointers will keep you on the right track.

1. How much is a premium domain worth? Start by researching its history.

Close-up image of a person at a laptop, symbolising the importance of research when sourcing a premium domain name with help from a broker.

Great domains are valuable, so your broker will start by doing a deep-dive into the domain to gather as much information as possible ahead of the negotiation phase. Among the things we’ll investigate are:

  • Previous Domain History: Using tools like the Wayback Machine, you can view the website’s past content, which can help you avoid domains associated with spam and negative SEO practices.
  • Key Traffic Patterns: We’ll dig into the domain’s history to understand its previous use, traffic patterns, and any potential issues.
  • SEO Performance History: Tools like Ahrefs will help assess the domain’s SEO performance, including its backlink profile and organic traffic data related to a website. This is important because a domain with a solid SEO foundation could bring value beyond its name, while a domain with penalties or poor history might hurt your website ranking. Check out our post on domain name valuation to discover more.

2. Confirm whether or not the premium domain name you want to buy is listed for sale

Next up is performing a domain lookup using tools like WHOIS to check whether the domain name you’re looking for is available for purchase.

It’s possible it’s already up for negotiation, or may have already been sold before. But if it’s registered, you can use a browser to check its expiration status for insight around whether it could be up for negotiation soon.

3. See if there are any trademark issues

Before you buy a premium domain, you need to confirm there aren’t any trademark issues. Ask your broker to conduct a trademark search to avoid legal conflicts.

Domain names that infringe on existing trademarks can cause costly legal issues, so checking databases like USPTO.gov is a key step to avoid additional exposure.

4. Use a domain valuation tool

The first step to securing a favorable premium domain acquisition price is understanding its market value. A great place to start is a domain marketplace.

In addition, valuation tools like Estibot help you understand how much a domain is worth based on factors like the extension (.com, .net), keyword relevance, and previous sales of similar domain names. Domain price negotiation strategy is rooted in your own or your broker’s assessment of what a name is truly worth.

5. Consider monitoring the domain for a while

A pair of hands with a clock face projected onto them, signifying the importance of taking your time when sourcing a premium domain name.

If you’re not in a rush, it could be worth monitoring your premium domain name for a while to get the most favorable price.

For example, domains often get listed on auction sites from either a sale or registration lapse (you can’t actually buy a domain name forever), providing a prime opportunity for you to acquire it at a favorable price.

 

Part Two – How to Negotiate a Premium Domain Name

You’ve selected a domain broker – or maybe you’re confident you can pull this off yourself. Now that you’ve done your domain name due diligence, it’s time to kick off negotiations. Steps 6-10 (below) will walk you through how to optimize the entire negotiation process for the most favorable outcome.

6. Start negotiations with a reasonable initial offer

The first step is to have an initial offer you feel both comfortable and confident about.

The offer should be reasonable and based on comparable domain sales. It also shouldn’t be your maximum offer, as you’ll want to leave room for negotiations. Your broker will then make contact with the seller or selling agent and present this initial offer.

When you email a domain owner to buy a name in their portfolio, a professional tone is key. Check out these 5 domain name negotiation scripts to get you started.

Pro tip: never low-ball the seller. You only have one chance to get it right. Ask, “What is this asset worth to me?” and “Am I open to an alternative if my budget falls short?” You need to be clear on whether or not this is a must-have domain name for your project.

7. Know your ‘best offer’ for a domain name, and be prepared for a counter offer from the seller

It’s rare for a premium domain owner to accept the first offer you present. They know what they have is valuable to you, so they will likely counter your offer with a higher target sale price.

Be prepared to negotiate and remain flexible. It’s common for premium domain negotiations to go back and forth several times before reaching a final agreement.

Pro tip: persistence pays off. The greatest number of contacts with a seller to secure a premium domain name for a NameExperts.com client is 110!

8. Think outside the box – domain price negotiation strategy comes in many guises!

If you’re struggling to come to an agreement, think outside the box and present some ways to sweeten the deal while saving you money.

  • Installment payments: Offering to pay the total amount over time may make a higher price more palatable to both parties.
  • Lease-to-own: This allows you to use the domains while making smaller payments and eventually taking ownership with a larger ‘balloon payment’ at the end.
  • Equity or partnership: In some cases, offering equity in your business or a partnership might appeal to the domain owner selling the domain name.

9. Be patient

Domain negotiations can take time, so it’s important to remain patient and professional throughout the process.

Avoid pushing too hard and always remain interested and available during the active negotiation. You don’t want to upset the seller or selling agent. Keep communication respectful and open to maintain goodwill with the contact.

If you are buying through a domain marketplace, make sure to align with your representative when trying to buy domains. Domain marketplaces are excellent resources for inbound leads.

Places such as SEDO or Afternic provide a market for parties interested in buying a domain by searching available inventory by keyword and TLD.

10. Get the deal closed with an escrow service

If all goes well, you’ll hear back from the premium domain seller that they’ve accepted your offer. That’s great news, but there’s a little more work to do to finalize the deal.

Once your price and terms are agreed upon, your domain expert will draft a formal purchase agreement. They’ll almost certainly recommend using an escrow service, which means the funds are placed in escrow until the domain migration is completed and verified. Then the payment is released to the seller.

Here’s how an escrow service helps keep everything safe when acquiring a premium domain name:

  • Security: The escrow service ensures that the buyer’s funds are only released once the domain is successfully transferred from the seller, protecting both parties.
  • Transparency: All steps are tracked. Both parties have clear visibility into the status of the transaction and deal, leading to the best price.
  • Dispute Resolution: In the event of a dispute, the escrow service can mediate and help resolve issues, offering a neutral third-party service. This can save you money – and headaches.

After the domain has been confirmed, you officially gain ownership of the domain, concluding the acquisition procurement for your site.

Congratulations, you’ve successfully made a premium domain purchase!

A dog shaking hands with a human, symbolizing that a domain name negotiation has been completed with help from a domain broker.

Final thoughts on negotiating a domain name

Premium domain acquisitions can be tricky. Along the way, you’ll likely ask yourself:

  • “Is this premium domain worth it?”
  • “What is a fair price for a domain I want?”
  • “How do I contact a domain owner?” and a dozen more questions.

Which is why having an expert by your side to navigate the process is crucial for success.

Name Experts founder Joe Uddeme has over 15 years of experience helping clients successfully acquire premium domains and is ready to help you do the same, just as he did for Monday.com and entrepreneur Mark Cuban.

 

About the author

Joe Uddeme is Director and Principal of Name Experts, one of the world’s leading domain name brokerage services. He has overseen domain name sales and acquisitions totaling more than $150 million and is renowned worldwide as a go-to expert in buying and selling premium domains. If you’d like help with buying or selling a domain name, contact us at: [email protected]

 

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Does it have any search engine authority? Your domain’s search engine visibility largely contributes to its value. Domains with quality backlinks have more value than those without. Check your backlink profile to evaluate how much your domain name can fetch. If you feel they aren’t enough, you can build more backlinks before listing the domain for sale. Is the domain name brandable? You’re more likely to fetch a higher price for a domain that’s easily brandable. Such domain names tend to be short and easy to recall. Businesses pay top dollar for brandable domains because they draw more online traffic. Does it have a popular TLD? Domain names with popular TLDs like “.com,” “.net,” and “.org” are more valuable than those with less popular TLDs. Pro-tip: If the answer to all the above questions is yes, you’re on the right path to flipping domain names for profit!   Step 9: Selling Your Domain Name You’ve determined a fair price. Now it’s time to sell. Consider how you want to sell the domain and evaluate which route will give you the optimal price. Your best options for domain name flipping include: Private Sale: Sellers can negotiate one-to-one deals with prospective buyers. You’re free to approach any individual or business you think might be interested in your domain name and negotiate a price. Marketplace: You can list your domain name on a dedicated domain name marketplace. It’s easier to find buyers this way because the marketplace already has domain name investors looking to buy. The marketplace will take a cut of your sales for their service. With a Broker: Another effective way is to hire a domain name broker like Name Experts to negotiate a deal for you. Domain brokers are experienced in evaluating the value of domain names and can fetch you the best possible price. The broker handles the negotiations, and the only thing you will have to do is authorize the domain transfer. Auction: Auctioning your domain name is another way to sell it. You’ll place the domain up for auction on a marketplace, and the intending buyer with the highest bid will buy it. Domain auctions usually last several days, so there’s ample time to find a willing buyer and profit from domain name flipping.   Step 10: Use An Escrow Service It’s advisable to use a third-party escrow service when selling your domain name. The escrow service holds the money paid by the seller and releases it after confirming that you’ve transferred the domain. It prevents you from falling victim to fraud, e.g., a buyer refusing to pay after you’ve transferred your domain.   Step 11: Transfer the Domain The last step – all you have to do now is transfer the domain as agreed to the buyer. You’ll need to request an authorization code from your registrar and transfer the domain to the buyer’s registrar account. Note that most registrars require a domain to be at least 60 days old to be eligible for a transfer.   Domain Flipping Tips Building Your Domain Portfolio You can become an expert investor specializing in domain names if you’re willing to learn about the marketplace and create long-term value. Domain names are like any other asset to invest in, but you must do it carefully. Follow these tips to build a good portfolio and make money flipping domains: Understand your strategy: Domain name investors either follow the “quick flip” or “buy and hold” strategy, and these phrases are pretty explanatory. Choose which strategy you want to follow, or use a mix of both. Diversify your portfolio: The portfolio’s value should not be tied up in a single or few domain names because of concentrated risk. If possible, acquire more domain names to balance your risks. Never overpay for an asset: Don’t be the inexperienced investor who overvalues and pays excessively for an asset. Ensure you get third-party evaluations before paying for a domain. This will help you to maximize your profit when you sell the domain. Study and gain knowledge: The domain name investment scene is flexible and dynamic. New events occur every day that affect the value of domain names, so ensure you stay up to date with industry news to avoid getting left behind. Domain Flipping Risks Domain name flipping doesn’t guarantee profits. It carries risks, just like any other type of investment. The main risks include: Low Liquidity: Domain names don’t have as much demand as other assets like stocks, bonds, and commodities. You’ll likely need to wait a while after listing a domain before you find a willing buyer. It’s not something to invest in if you want short-term liquidity. Unexpected Valuations: Domain name valuations can swing high or low on a whim. You might buy a domain, wait a while and list it for sale – only to find the offers are significantly less than you paid for it. Domain name valuation is not as technically grounded as in other assets like stocks and bonds; the value depends significantly on a buyer’s intuition, so be aware of the risks. Other Ways to Make Money with Domains Buying domain names to resell isn’t the only way to profit from them. You can make money in other ways, such as: Domain Leasing: Rent your domain name to another party for an extended period. You’ll be paid at specific intervals such as monthly, quarterly or annually, giving you steady income for as long as the lease lasts. Parked domains: You can keep a domain and make money by placing ads on the homepage with a strategy called “domain parking.” You might also redirect the parked domain to an existing website you operate that generates revenue.   About the author Joe Uddeme is Director and Principal of Name Experts, one of the world’s leading domain name brokerage services. He has overseen domain name sales and acquisitions totaling more than $150 million and is renowned worldwide as a go-to expert in buying and selling premium domains. Contact us at: [email protected]

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