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Asking Price vs. Make Offer

By on August 2, 2011

This is a decision that domain investors are making continually. By parking a domain or not listing the name for sale on major marketplaces, we are inviting interested parties to make an offer. Many of you are familiar with these inquiries. Sometimes an incoming offer is acceptable, but many low-ball offers do not lead to a sale.

I came across an insightful article on Inc. Magazine recently featuring 5 negotiation tips that can definitely relate to domain sales.

First Mover Wins

In particular, negotiation tip #3 suggests an idea that is contrary to popular belief. Is it better to ask for buyers to make an offer or to set your asking price? The answer may surprise you.

Some studies suggest that the outcome of a negotiation ends up being closer to what the first party proposes. The article quotes an interesting excerpt from Negotiation, a book by Adam Galinsky and Roderick Swaab.

“In our studies, we found that the final outcome of a negotiation is affected by whether the buyer or the seller makes the first offer. Specifically, when a seller makes the first offer, the final settlement price tends to be higher than when the buyer makes the first offer.”

So, as it turns out, it should prove beneficial to your bottom-line to set an asking price you are comfortable with. Thinking back on my own personal sales history, this seems to make sense. If we look at the industry as a whole, the vast majority of domains that are sold started with asking prices.

Domain investors should definitely take advantage of the opportunity in pricing their domains. When listing your domains for sale on your portfolio or public marketplaces, set a reasonable asking price to put negotiations in your favor before they begin.

Related: Top 10 Reasons Your Domain Name Won't Sell

Still a Place for Offers

Of course, it is OK to accept offers for particular domains you are not ready to price or are not interested in selling in the short-term.

Be sure to research comparable domain sales and analytics for your domains and stay abreast of the latest domain pricing trends to decide if an offer is reasonable.

Negotiation tip #5 offers sage advice for dealing with low-ball offers you will inevitably receive:

Don’t take it personally. If you respond with a cool head, there may be an opportunity to make a deal no matter the starting point.

RelatedDomain Sales Strategy: How To Be Three Steps Ahead

About Mark Fulton

Mark is the Founder of DotSauce Magazine and a full time web developer, domain investor, SEO and online marketing professional residing in North Carolina, USA. Visit MarkFulton.com for information on freelance website development, SEO and consultation services.