Offer for a domain name

[jls]

I have been following a few of the recent threads re 'value of domain names', not really thinking it was particularly relevant to me at this time, BUT

after a casual conversation on and around the subject over the weekend whilst at a friends BBQ I have just taken a call from someone who wants to discuss whether I would sell a particular name (.com) I have registered - but done nothing with yet.

It's really got me thinking, and thought I would bounce it around this forum and see what folks think.

The domain name (actually I have both the .com and the .co.uk) is a short general phrase which could suit many segments of the market. I know the guy who has shown the interest works for a very large UK company which has many sub brands, and one of them happens to use a related phrase in some of their advertising.

I have no great attachment to the name as I have other things on the go that I would like to see through - but it sounded OK so I registered it, In fact I registered a few others that are closely related as well.

The questions going through my mind are:

Q1 - How the hell do I value it.
Q2 - What restrictions may I encounter re future use of the name?
- I am expecting some form of restriction like not registering any similar names in the future - say for a given period, or using any keywords of similar nature to drive business away from the name I sell. I could live with that.
Q3 - Should I declare the other domains I have regsitered already and try to work up the deal ? - or stay silent do the deal on what he asks then try and go back for more (or is this just being greedy !!)
Q4 - Are there any legal minds out there - or pointers to where I should look - to get to know how to handle this.

As someone very much still in the learning curve I was never expecting to have to think about this kind of thing.

Any and all input appreciated.
Regards
John

[ambermagic]

Hi

Q1 - In my experience in the supply of custom software, the price you decide to charge is generally what you think your potential buyer is prepared to pay for it, so the more you know about your potential buyer the better. You could start by asking them to make you an offer, and taking it from there.

Q2 - I would expect any restrictions (if at all) relate more to the brand or copyright issues rather than the actual domain name. If it's important to the buyer I am sure they will raise any restrictions with you.

Q3 - You could try and find out more about the campaign they are running, and then mention that you actually have a few domain names that could be useful and just see if they are interested. If some of your other domains are closely related (variants, different spellings) then maybe they could be included in the deal as a package. I think it might be pushing it to expect a premium for variants though.

Q4 - I am no legal expert, so interesting to see what other people think too. If you haven't been there already, you might want to check out <a href="http://www.webmasterworld.com/libraryv4.cgi?viewforum=25">Webmaster World</a> for some background reading.

Cheers.

Ben

[KieronD]

You'll get a lot more responses if you actually tell us what the domain is.

[gadget]

Q1 - How the hell do I value it.

You don't - they do!

You've already said that it's of no real value to you so the value is with the buyer.
When I get approached, my stock answer is "make me an offer".

[Rynert]

When I get approached, my stock answer is "make me an offer".

My stock reply to that stock answer is "£5"

[gadget]

My stock reply to that stock answer is "£5"

And my stock reply to that isn't printable - lol.

[aqls]

There are many ways to handle a request.

First of all, many, many requests are timewasters offering tiny figures for worthwhile domains, so don't get your hopes up.

Then, figure whether you want to sell the domain name or not. Sounds simple but in my experience it is a tough decision to sell some names.

Depending on how tough that decision is, you can then establish a low or high price.

In short the minimum value of a domain is the price of its nearest useful alternative.

There is a domain specialist site (there are many) but a good one at acorndomains.co.uk on which there are many legals and experienced domain sellers and buyers with whom you can discuss your domain. You can also see what prices different quality domains are on offer for.

There are also websites that list recent sales of domains that will give you an idea of how much similar domains have recently been sold for.
.co.uk lists are at Domain Name Sales Prices from DomainPrices.co.uk
.com and others are at Domain Name Journal - The Industry News Magazine at DNJournal.com
live auction prices are at Buy, Sell, Appraise and Auction Domain Names at Sedo, the #1 domain name aftermarket, broker, reseller, and appraiser! and GreatDomains – Premium Domain Auctions and Domain Parking Program (same owner)
also look at afternic, pool.com, snapnames.com etc for prices

If the buyer or market that the domain describes is UK based then it is an advantage to have both .com and .co.uk

Valuing a domain can be easy - finger in air, a look at the overdraft balance, rules of thumb

or it can be difficult.
Even armed with the lists of recent sales the most challenging aspects are:
How to compare domains with the ones listed given that each domain is unique
How to negotiate
How to complete

Comparisons
Comparisons of domains can be done if you consider aspects of domains that are applicable to other domains.
Here is a short list of comparison aspects.
length of domain
genericness/genericity WTF how generic the words are and whether they tread on any tm toes.
number of words
extension of domain
how many other extensions are registered under that phrase
whether the marketplace described by that domain is a rich one e.g financial or insurance
whether the domain is keywords and the value of the keywords as judged by ppc ad prices for those words
how much traffic the domain gets naturally, and if this is type in, or s.e. related
the age of the domains as se's are currently giving advantage to older domains
Whether the domain has had a site on it, is in archive.org, is in search engines and directories, has page rank or whether it has been banned.
Useage of the alternative extensions
Whether people keep asking to buy the domain is also a good guide.
Fashion and trends also play a large part. domains with i prepended seem to be all the rage at the moment, also 3 letter .coms seem to have no limit to their upside. It is worth knowing what is fashionable.

It is also worth knowing what is in the news. eg missold pensions and mortgage fee refunds are all the rage at the moment.

In evaluating the words, look at whether they are brandable or describe a market place or product.
The best domains are either short and memorable e.g. delighted.co.uk or describe a huge value market eg mortgages.co.uk

How close to purchase the domain words are: eg cheap travel insurance is closer than travel insurance advice, although you can of course build to the latter.

Often a domain has what I'd term "extras" like online, or web, or uk or hyphens, or net, or i or e prepended. THe more of these the domain has the lower its value becomes. e.g insurance is good, insurance online is good but not as good ukwebinsuranceonline is worse still.

In valuing a domain, it is often a mistake to think that a domain is valued highly because of what site you can put onto it. A site can be put onto any domain and it is the site that does the work not the domain. The value of the domain itself is what the domain name can add to the value of that site.

Third party input can sometimes help. Collect together a bunch of very similar domains that you know the price of and slip in your own domain into that list. Then ask someone to rank that list in terms of value. That can give a good indication of what it's worth.

How to negotiate
This is an individual thing.
Many offers come in at £50 or even less, and in my experience only a very small minority ever reach a decent £x,xxx or even mid £xxx price and in my view these are often time wasters.

Even for domains that are worth in excess of £xxx,xxx you'll still get hoardes of £xx bids. Either they're pretty ignorant or they're trying it on.

There are many nice domainers that will reply to everyone who makes an offer on their domain in the hope that something comes from it. I can't say I've always done that!

If they ask for a price it is your decision as to what you want for it. It is a more common mistake to ask for too much, as everyone tends to overvalue their domain names. However, it is a lasting bad taste when you know you've underpriced a domain.

It is always worth asking for them to put in a price, but if they don't then don't be afraid to ask a negotiable amount above what you actually want for it. It is unusual for someone to take the first price offered.

The biggest sales are done using a broker or a confident sales pitch with all the traffic details, history etc at hand, if the domain is worth X then go for X x 1.5 and be quite strong with your negotiations.

Chances are immediately the buyer will say its way over budget in which case be prepared to say "bye bye".

Some buyers will insult you to the point of ridicule for owning the domain, or even owning more than a few domains expecting to embarrass you into reducing your price. You may or may not have an opinion about that but the negotiation is not the place to be embarrassed by it.

Some buyers will ask for traffic - and given that 90% of good brandable domains don't have traffic, will then negotiate on the back of its lack of traffic.

Don't forget to include VAT and Escrow and commission and Nominet transfer costs, and transfer out costs from some ISPs in the negotiation.

Completing.
The best deal for you is to transfer only once money is in your account. Ask for bank transfer before you transfer the names and give them appropriate invoices and paperwork to show that the deal is done.

If you have to then use escrow. In my opinion this is unnecessary expense as it confuses all the issues and doesn't really get you any guarantees. Using sedo for instance is usually worse than not using them given their poor record of client communication. Moniker is ok provided you use them when they are not busy. Escrow.com I've used with some success but as infrequently as possible.

Don't forget to establish who pays the Nominet fees. and for .co.uks dont forget to change the tag or they can get stroppy having to pay extra to change the tag after the purchase. Nominet have recently changed this by putting the new tag requirement into the transfer form but it has been a problem in the past.

For a valuable domain it is worth asking a broker to handle all the above for you.

rob.co.uk on this forum is the broker I'd recommend.

Also as a final tip, I wouldn't post your opinions of your domain on the forums, post the domain name itself by all means because you may get more interest in it and can start an auction process, but I wouldn't say things like you don't really care about the domain or were going to let it expire anyway. You may be honest but it doesn't help much when trying to get a good price. Similarly getting board members to publicly value your domain is also a mistake as the buyer can easily see these and use them against you. Instead, always state the positives about it.

Good luck

-aqls-

[jls]

Wow, was not quite expecting such coverage so quickly, but guess I should not underestimate you guys.

Thanks to all who have responded so far, it is much appreciated:

- to AmberMagic thanks for the time you have takne to answer the specific questions I raised, and so clearly.
- to aqls, I am quite simply overwhelmed with the work you have put into such a comprehensive answer. Far too much for me to grasp in one go, especially after a very heavy day. But certainly much food for thought, and highlighting how I should go about clarifying the benefits etc in my mind.

I am printing this down as I type, and will go and read with a cool beer on the patio in the evening sun.

Thanks also to the others for their responses:

I maybe new and still with a few mistakes ahead of me but I do not think I want to disclose the domain name - I am sure there are those much cleverer than I that could hi-jack the name....... but if the bidding is only starting at a fiver then I think I can afford to hold on a while.

Seriously though from all your responses and the whiteboards full of scribbles from today I have much to do in terms of further research, and also much to consider in terms of how to progress the possible offer.

Thanks again

John

[Cockneyrhyme]

sitepoint is the place to offer it up for sale.