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:
Read this article if you want to learn more on negotiations
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