How to Negotiate a Domain Name Purchase

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This guest post was written by Tim Walker, a technology writer in Austin. After many years with Hoover’s as an industry analyst, he spent several years in marketing roles for hardware and software startups. Find him on Twitter at @Twalk.


Your team toiled to find the perfect name for your brand campaign — only to discover the URL for sale at a stiff premium.

How do you go about buying a domain when it’s not as simple as clicking “Select” at GoDaddy?

Carry out due diligence

For Tim Lavelle, director of SEO and social media at U.S. Interactive Media, buying a domain name begins with looking for red flags in two crucial areas.

  1. Social networks. Is the name available on Facebook, Twitter and other platforms? “There’s no point in paying a premium for a name you can’t own across the Web,” Lavelle says.
  1. SEO equity. Lavelle checks SpyFu, FE International’s Website Penalty Indicator, Moz’s Open Site Explorer and WebsiteOutlook to learn about a domain’s page views, SEO value, top keywords, penalties for shady backlinks and more.

Lynn Nichols, head of X Intellectual Property branding consultancy, says it’s important not to tip off the current owner about your interest in buying a domain name. Look up the registration history and current owner on Whois.com, then “visit the domain once and take a screen shot,” she says.

Determine the value of the domain to your business

Before you negotiate, figure out what the domain is worth to you. “No two domain name assets are the same, and it is very difficult to accurately place a valuation on a domain name,” domain specialist Elliot Silver writes.

You may want to hire a consultant to help. These experts have been through the process many times, understand the current market for domains and know all the pitfalls. At a minimum, before buying a domain name, check a valuation site such as Namebio.com, which will give you pricing information about recent sales of comparable URLs.

Pablo Fuentes, CEO of Proven, negotiated the purchase of Proven.com in 2011. Ultimately, the domain value was determined by two questions, he says.

  1. How desirable was it? In the case of Proven.com, it was a dictionary word with an obvious connection to the business.
  1. Was an existing business hosted at the URL? If so, the sellers would likely have been much less flexible in negotiating, Fuentes suggests.

Determine whether .com matters

If you can’t buy the domain name CampaignX.com, should you consider another top-level domain like CampaignX.net or CampaignX.co?

Experts are divided, though more of them lean toward .com for clarity and branding cachet. For example, Adam Strong, whose company Evergreen.com helps clients buy and manage domain names, is “a firm believer in .com as the gold standard of domain names.”

Still, Lavelle adds, “SEO can be successful on any top level domain, as long as it’s appropriate.” (For example, a site aimed at children would never use the adult entertainment domain .xxx.)

But Nichols believes that “domain real estate is so crowded that .co and .io are now considered good choices.”

Consider buying direct

Many sites can arrange a domain transaction via direct purchase or auction.

Negotiating the price directly with the current owner might be a better option. Doing so may spare you the logistical headaches of participating in an auction — and keep you from overpaying in a bidding war against other interested parties.

Nichols recommends creating an email account with no identifying information, then contacting the current owner to indicate your interest. “Often the owner will quote their highest price, and you can negotiate it down a bit from there,” she says. “The trick is to indicate your interest in engaging in a serious negotiation, [but also] that you don’t have deep pockets.”

Strong, who has negotiated many such deals, recommends having a Plan B. “If your company is trying to name a new product or service, come up with more than one option so that you aren’t locked in to just one choice,” he says.

Otherwise, a savvy domain owner will drive a hard bargain.

Beyond that, as Fuentes puts it, “You have to know your walkaway point.”

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3 COMMENTS

  1. Creating a fake email address and reaching out to a domain name owner is deceptive, unprofessional, and unethical. Would you try to buy a prized, empty corner lot in your town using the same deceptive practice? No, you would approach the owner showing exactly who you are because that is how people do business in the real world. Treating domain name owners with such a lack of respect is wrong and should be discouraged.

  2. I agree with the other poster about creating a e-mail just to contact someone. It comes off as shady and people are less likely to do business with you. I’ve encounter quite a few people who wouldn’t even respond to my offers because I am using a gmail to contact them.

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