How to Negotiate as If Your Life Depended on It

Discussion in 'Resources' started by domainking131, Nov 29, 2016.

  1. domainking131

    domainking131 India Forum Leader Staff Member

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    Splitting the difference is for losers because it leaves too much money on the table.

    Too little too often
    Let me explain. The way it often goes in domaining is the buyer makes an opening bid around 10% of asking price. Right? That starts a back and forth process that, at best, creates a selling price in the middle. That would mean a sale price of $1,125 on an asking price of $2,500 with a $250 opening offer. However, too often domainers get less than the “split the difference” price and sell hand regged domains, for example, at around $500.

    While there is no shame in acquiring a domain for $25 and selling it for $500 (20 times investment) there is an opportunity cost that over time undermines the domaining business model. We only sell a tiny percentage of our inventory annually. This means renewal fees significantly erode our profits. Therefore, to run a profitable domaining venture it’s imperative we have powerful negotiation skills so we can maximize every sale.

    There’s gotta be a better way
    Rather than splitting the difference, Voss recommends a negotiation process that looks something like this:

    • Seller: $2,500
    • Buyer: $250
    • Seller: $2,000
    • Buyer: $500
    • Seller: $1750
    • Buyer: $750
    • Seller: $1625
    • Buyer: $1,000
    • Seller: 1,565
    • Buyer: $1250
    • Seller: $1535
    • Buyer: $1400 “that’s my final offer”
    • Seller: $1520 “and I’ll throw in the dot-net as a bonus”
    • Buyer: “OK, Let’s do it”

    Read this article if you want to learn more on negotiations
     
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  2. Jas

    Jas Indonesia Member

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    Thank you for sharing this interesting tip. The problem often lies in how impatient either side gets, which eventually stirs the discussion to a more emotional side. We should always have a goal and side plans ready before starting a negotiation.
     
  3. JackD

    JackD United States Active Member

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    Very interesting and in an ideal world that would be great. The "That's my final offer" comes toward the top of the list that you have. Which is why is is sometimes best to say "Sorry but you will have to stick with one of those alternative choices you mentioned". Most times the buyer will eventually come back, sometimes not, but that is the game we play.
     
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  4. tulip

    tulip Kenya Active Member

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    Wow, the power of negotiation. Often times, people are not willing to put in much into reaching a compromise. I relate with the moment when either side gets impatient resulting in a push-and-pull.
     
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  5. prasanna kumar

    prasanna kumar India Member

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    That's a nice article, thanks to you i understood many things that i thought were very complex to understand. one more thing i understood here is negotiation skill is all that one require to get a profit whether you are a buyer or a seller.
     
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  6. wot

    wot Thailand Well-Known Member

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    Usually if it's .in via Sedo it starts with a very low $ bid from buyer, a fair counter by seller based on quality and perceived value by seller and then nothing!

    When I check the buyers profile it's usually the same people.

    But back to the original post, yes definitely the way to do it, you have motivated "buyer"who contacted you and you should remain in charge of the negotiation.
     
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