Recently a buddy of mine tried to sell me a TV wall-mount he didn’t need anymore. He was asking $100. I told him I can buy a brand new one for half that price. He got offended. He explained to me what a high quality mount this was, pointing out all of the features, told me it was $300 brand new. I explained to him that to me, it was a TV mount that holds a TV on the wall and nobody sees. I went as far as to explain that to ME, the difference between a $50 TV mount that holds a TV on the wall and a $300 TV mount that holds a TV on the wall is simply $250. Clearly, he was selling to the wrong person. He would be much better off to give it some time and find the right buyer; someone who understood the product they were buying, recognized the value, and wouldn’t mind paying the extra money.
Selling domain names is the same way. I’ve been on both sides of it in domain forums and in conversations with end users. Many a time I’ve inquired about a domain, only to have the seller give me a price that I wasn’t willing to pay. I will always come back with my own offer and almost always the seller will act as if I am crazy and spend a lot of effort trying to explain the value of the domain name to me. In that situation, I almost always kindly explain that I hope he finds the right buyer, but to ME the domain doesn’t have that much value.
When dealing with a domain inquiry, I don’t waste my time trying to explain the value of a domain. I figure if the person is actually interested in the name at the price it’s being offered for, I don’t have to explain the value to them. I also figure that if I give a price and the person acts astonished, I’m simply not going to get the money I want no matter what I say, so theres no point in explaining. I do understand that there are groups of small business owners out there that simply don’t understand the value of a domain, but at the same time that just tells me that they don’t understand a lot about business in general. Explaining the value of a domain is one thing, but to do that you have to explain marketing, advertising, how the internet works, etc. I feel the business owner should have a grasp of these things if they’re in business to begin with, otherwise they’re probably just some guy that says he’s starting a business but only has a $200 total budget to do so (these people do exist, all over the place, trust me).
So the next time you have a domain name you are receiving inquiries on, or selling at forum, simply look past the people who don’t grasp the value of the domain and wait for those that do. It’s those that you don’t have to plead the value with that will give you the money you want.
i want to agree but i can’t. Why? I have had offers before that were very low and when i countered they said the price was too high and after a simple 5 point explanation of the value they pay up. Sometime you have to educate the buyer and make him/her know that they are buying an assett at a fair price.
CC, In that situation I’d be willing to bet that if you simply disregarded their lowball offer, they would have eventually come back to you. I’m willing to bet they knew the domain was worth the money from the beginning but was trying to get a deal. I did mean to mention this in my post but forgot.
But, nevertheless, lets assume they didn’t know the value whatsoever…what are the 5 points you usually point out?
If it’s a quick copy and paste response to a unresponsive/low-ball buyer then I see no harm, but if you have to waste any more time than that, then no, keep moving.
In regards to the TV mount, it’s easy to see why the rest of the world loves Americans: We waste our money on dumb, unecessary shit. I think Americans are starting to wake up and realize wealth is leaving the country at a fast clip and it’s time to save instead of spend excessive money on things that really won’t improve their lives. You can see the U.S. culture changing all around us very quickly now.
I don’t know why, but the TV mount conversation you had reminded me of the scene in Vacation where Chevy tries to buy station :
🙂
http://www.youtube.com/watch?v=pTaTitRENDM
also cc, just a quick story I heard from Adam Dicker once…
he had a domain that someone was inquiring about a domain that had some value. the guy insisted the domain was for his wife’s new small business and offered him $2000. adam told the guy to get bent, more or less.
the guy kept replying pleading with adam, all adam would reply with is ‘find another domain’. several emails later the guy shelled out 60k for the domain.
clearly he knew the value all along but was trying to steal a deal
Ceasar,
also reminds me about a stand-up comedy bit by a guy named Brian Regan talking about shopping for a regridgerator.
‘this unit here, $600, keeps all your food cold…….this unit here, $900, keeps all your food cold…..and this unit here, $1200……..keeps all your food cold’
This post needs to be engraved and displayed on a plaque somewhere. It’s great advice. One could also say that if you have to explain the value, the name you’re selling isn’t good enough.
I have run into CC’s scenario, though, and it’s hard to know if the people you’re dealing with are clueless, or trying to get a deal. I took a stab at brokering a two-word commodity-related .com for a friend last year, and immediately got replies from several business owners. One guy (a CEO from Canada) said “we’ll give you $200 for it. Let me know if there are any higher offers.” Clearly, that was an attempt to lowball, or perhaps as Chris said, I just hadn’t found the right buyer yet. The name was slightly overpriced to begin with, but it certainly wasn’t one that would sell for less than $7k.
By the way, I LOVE Brian Regan. I saw him live a couple of years ago. To this day, when I see people stuffing luggage in the overhead compartment, I can’t help but think of a “dead yak.”
Love the anecdote from Adam Dicker. I suppose of they’re approaching you first, it’s a clear sign that they know the value. Still, it’s hard to tell, when most of the time, people are trying to get names for as low as they can. I guess we’d all be better served playing hardball a bit more.
Maybe the domaining community can find a way to come up with a formal “white paper’ or informational website explaining the value of a domain names in terms the average person or small business can understand. This way whenever any one of us receives a lowball offer for a domain we can point people to the site rather than everyone of us having to recreate the wheel and explain marketing, advertising and how the Internet works as Shane has mentioned in his article each time we have to respond to such inquiries.
I have to disagree with this advise. I have had people offer $500 for a domain that they had no idea of the value of the domain. Multiple of times I have ended up selling to them for $3,500 or more. I tell them they need to amortise the purchase price over 12 to 24 months. This monthly amount is what should be considered when building an online business in contrast to a brick and mortar business. I have owned several stores and $300 – $400 a month is small change for a good online business address. The website buildout is to be compared to a store fixture buildout. Advertising needs to be done for both an offline business and online business. Operating overhead is often much smaller for online businesses. I have helped many potential customers think about their name purchase with this reasoning. One man even formed his LLC before securing the right domain name. People might have money to buy a domain name and build a business but their thinking about the value of a domain needs an education. This works for me.
If you have to explain that you don’t have to explain then you are writing to the wrong person. .. oh wait a sec.