Negotiating for a Domain Name

The leeway you have to negotiate a deal for a particular domain name depends on a number of factors, including:-

The maximum amount of money you are prepared/able to spend to secure the name
The importance you place on securing a particular domain
The initial approach you used in contacting a buyer
How urgent it is for you to secure a domain name

Like any business transaction involving goods without a preset pricetag, 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:

Before I can make a decision about the domain name, I would like to know how much traffic your domain receives every month. This will help me to understand the value of the domain name.

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:

While it's difficult to know what level of offer to make for your domain name without having any information about the potential traffic it receives, I like the domain and I would be prepared to pay up to $1,000 for it if it can be made available quickly. My offer is valid for the next 7 days. I look forward to your reply.

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:

I've discussed the domain name issue at length with my partner, and while I'm keen to move ahead with this transaction, he is adamant that we should not exceed our $1,000 budget (as a startup, money's pretty tight at the moment). Unless you're able to sell us the domain at that price, we will sadly have to begin looking elsewhere.

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...

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 summarising the terms of the deal, and ask them to confirm it:

To make sure we're both on the same wavelength, I've summarised 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:

If the domain name is registered with a registrar that allows for a free "instant transfer" process (e.g. NamesDirect.com, Dotster.com, RegisterFly.com) then all you need to do is open an account at that registrar, and get the seller to "push" the domain into that account.

If the domain name is registered with a registrar that makes intra-registrar transfers difficult (or impossible), you can instigate a transfer from your favorite registrar, and ask the seller to confirm the transfer when the email confirmation arrives (this is generally sent to the Admin Contact of record for the domain name as a security precaution to ensure that the domain name transfer is valid). You will need to take into account any idiosyncracies or incompatibilities between registrars (for instance, at the time of writing, BulkRegister.com is automatically rejecting all attempts to transfer domains to eNom-affiliated registrars.

The "paper trail" approach: occasionally, you may have to resort to additional paperwork (such as a notarized letter authorising the transfer, or a completed and signed Transfer Form). While the vast majority of .com/.net/.org registrars have done away with such archaic transfer practices, there are a few "old school" registrars that still require physical (faxed or snail-mailed) documentation before a transaction can take place.

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!

Domain Name Guide