

Ask HN: How do you value a domain name? - dglassan

I've found a domain that I really like for my next project. It's owned by a premium domain name seller, and after contacting them they gave me a quote of $3,000+<p>I'm going to negotiate the price down but I'm not sure how to go about doing it. How do you value a domain? I don't think it's worth the quote they gave me but are there tools or techniques I can use in my counter offer to bring the price down?
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ohashi
I've been a seller and a buyer. Made a living off it for a while even.

My opinion is 3k is about average for a domain sale. If I recall average sale
was in the ~2000-3000 range. It's a pretty reasonable asking price without
knowing anything about the domain.

As far as valuing, there is no way, scientific or otherwise to tell you value.
My favorite explanation from the sellers side is:

Value = Price * Probability of Sale

(Credit for that goes to Paul Shaw)

It so beautifully encapsulates many of nuances of domain names. There is a
unique supply and an infinite demand curve. The probability of getting a sale
as you go higher diminishes. There is no 'one' answer to value, but it's
completely dependent on the seller's risk appetite and expectations.

Finally, some practical advice. There is nothing you can say, no tool you can
use that a rational domain owner is going to accept and act on because you
wrote it in your counter offer. You have a max price, they have a minimum
price, maybe you'll negotiate to a point where they overlap, maybe not. I
would counter offer (doesn't have to be your max price or you can play the
ultimatum game) and see the response. Repeat or accept. For such a small
number I wouldn't be countering more than once MAYBE twice. I generally
consider it a warning flag when the other party is negotiating over almost
nothing.

Set your max budget and stick to it. People are irrational towards the end of
a deal. Don't overspend and regret. You've done the analysis beforehand, you
know what it's worth to you.

Find other names and prepare a backup plan. Don't tie yourself to one name. I
hate when a deal falls through because they bought another name, but it makes
perfect sense from your side.

~~~
dglassan
Great response. Thanks for your input. I think I'm going to set a max price
and use that as my only counter offer. If they don't accept I'll keep looking.

~~~
ohashi
Make them aware of it. I've lost sales I would have taken the counter offer
but I didn't realize it was their final offer. It sucks (for both sides) when
you could have done a deal both of you would have been happy with had you
realized it.

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DonWh
I just used the top post in this thread.
[http://www.avc.com/a_vc/2011/04/finding-and-buying-a-
domain-...](http://www.avc.com/a_vc/2011/04/finding-and-buying-a-domain-
name.html) Made the owner an initial offer of $750. Didnt hear back from him
for a month. The guy countered with $10,000. I used the language in the post
above and he agreed to my highest range price of $1500 (I never moved past my
first highest range price).

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staunch
Even if you could _prove_ scientifically that it was only worth $1000, so
what? The other party _owns_ the domain. They can refuse to sell it at any
price they wish. For a pro domainer a $3k domain isn't too much. They may very
well not budge much.

As a rule people tend to be willing to accept a lower counter offer. Your best
bet is to make the highest offer you're happy with and make it clear that it
is your final offer. Be nice, but firm. Either you get the domain at a price
you're happy with or you don't.

Once piece of advice I can offer is to not fall in love with a particular
domain. Something strange happens with names. You start feeling attachment
very quickly and it clouds your judgement. Trust me, there are other domains
that you could like just as much as this one. Don't be afraid to move on.

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michaelpinto
Unless the domain owner is desperate for cash (i.e. a motivated seller) it
will be hard to knock the price down. Firstly by expressing an interest the
current domain owner now knows that the domain has some value. And then
there's nothing to stop the domain owner from raising the price since you're
interested. This isn't like buying a used car since the domain is unique so
the idea that you can value a domain and use that to bargain doesn't hold up.

~~~
dglassan
But how can they justify such a high price? Besides them saying that they
believe it's worth that much. There's no Alexa data on the domain and it
doesn't have any history of back links or pagerank.

~~~
ashconnor
The stats don't matter when you're dealing with a commodity of one.

I find that when I get a ridiculous quote, believe me I've had some, the best
thing to do is look for an alternative name and spend the savings elsewhere.

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uptown
It's definitely a tricky negotiation. I've been on both side of the
transaction (including deals that fell through for various reasons). ohashi
has covered most of what I'd recommend. One thing to include ... seriously
consider using an escrow service if you do come to an agreement to protect
both side in the transaction.

~~~
dglassan
There is an escrow service that we'd use for the deal. The quote price doesn't
include escrow fees.

------
jamesjguthrie
I hate domain hoggers with a passion. People that sit on domains just so that
they can sell them to somebody who thinks it's an absolute necessity to hold a
.com TLD, are morally corrupt. I much rather go for one of the other,
perfectly acceptable TLD's - .net, .org, .eu., .co.uk etc.

