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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Ownership percentage: You can request a percentage of shares in the domain lessee’s company. This method is risky but can earn you significant income if the website becomes a viable business that another corporation eventually acquires.   Benefits Of Leasing For Domain Owners Provides Another Way To Monetize A Domain Monetizing a domain is better than having it sit idle. If you have a valuable premium domain you’re not using, leasing it out can earn you passive income. You can always reclaim your domain once the lease expires. Opportunity For Investors With Domains In Their Portfolio Many investors specialize in acquiring domain names for profit. Investors with a portfolio of valuable domain names can lease them for a long time and get stable income. Consistent Revenue Stream Renting out a domain for periodical payments generates consistent income for the owner. The owner is sure of getting a specific return on the capital they spent acquiring the domain as long as the lease lasts. The Domain Value Increases Due To Usage Active domains are more valuable than inactive ones because of online traffic. The higher the traffic to a domain, the more valuable it is. Leasing out a domain increases its value in the long term, which the owner can realize by selling it later. Long Term Financial Advantage Receiving periodic lease payments can generate more revenue in the long term compared to selling your domain for a lump sum. It’s why many owners lease domain names out despite getting lucrative purchase offers.   Benefits Of Domain Leasing For End Users Spend Less Money Upfront Valuable domain names can run into tens or hundreds of thousands of dollars, which is risky to spend upfront. Leasing allows you to build a business with the domain and make periodic payments from the revenue you generate, which is cost-effective. Lesser Burden If the website for whcih you use the leased domain fails, you can terminate the lease and return the domain to the owner. If you owned the domain outright, that means having another asset you must keep renewing or find a potential buyer for. Opportunity To Buy the Domain In the Future Some lease terms include an option to acquire the domain outright later. This way, you can start the website to see if it succeeds. If it does, you can acquire full domain ownership and gain more control over your website’s fate. Access To Premium Domain Names At A Lower Cost Domain leasing lets you use very valuable domain names for lower costs. These valuable domain names can draw more organic traffic to your website. Avoid Legal Liability Issues Leasing a domain name means avoiding any legal liabilities concerning the domain’s ownership. Any legal dispute is the concern of the owner and not the lessee.     Downsides Of Leasing A Domain No ownership Not having full ownership of your domain is a risk. The owner can terminate the lease anytime and pay any agreed monetary penalties for early termination. It could be at a crucial time when your website is booming, and losing the domain would affect it negatively. Less Control You have less control over your website than the domain owner. Let’s say your website grows big and becomes valuable; its fate lies more in the hands of the domain owner than yours. They could use that leverage to extract concessions from you. The Domain Value You Build Is Never Yours Drawing traffic to your website increases the value of its domain name. Yet, the owner will capture that value instead of you working hard to maintain the website.   Where Can You Lease A Domain Domain Marketplaces Many domain name marketplaces allow owners to list and lease their domain names. This method is beneficial because owners can easily find customers to lease domain names to. The domain leasing services generate a lot of traffic, giving you higher chances of finding an interested lessee. Domain Brokers You can approach a domain broker to lease your domain for you. Domain brokers are experts in negotiating domain deals and can fetch you the best possible price. They’ll collect a fee for their service, either a flat rate or a percentage of the lease value. Word Of Mouth You can spread the word to your social and business circles about a domain name you want to lease out. You may find a trusted lessee this way and negotiate a good deal to earn a stable income. Forums You can join webmaster forums and post about the domain name you want to lease. You may find a buyer this way, but ensure you use a transaction escrow service because you’re dealing with a stranger.   Leasing versus Buying a Domain While leasing a domain might be a good option for some businesses, buying your domain outright continues to be the safest and most secure option for guaranteed success.   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. He also advises on leasing strategy and portfolio management. Contact us at: [email protected]  

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