During the process of engaging into an “offer, counter-offer” exchange about domains, certain behavior is indicative of the direction that the deal is heading to.
While some offers might start low, they soon acquire a certain pacing: the amount or rate of increase.
Usually, the buyer starts low and seller counters at the highest level, willing to negotiate down.
When the buyer engages in a game of trickle increases, increasing his offer by amounts disproportionately small to the initial figure, that’s usually an indication of aggressive bidding.
Very rarely it’s an indication that the buyer has reached their offer ceiling. Buyers that are determined to buy are also able to negotiate well enough in order to bridge the difference of the seller’s counter-offer.
In other words, a buyer that after two or three negotiation exchanges does not bring his offer close enough to the buyer’s counter-offers should be considered a negotiation “gamer”.
The seller’s approach should be flexible enough to engage in a sale, if needed of course. Because on a given day, domain sellers might receive multiple offers for the same domain that differ vastly in the amount offered.
Regardless, it’s never wrong to simply say “no” and cancel the exchange, once it’s clear that the potential buyer is gaming his negotiation instead of moving towards a mutually acceptable price. What might follow would either be another round of negotiations initiated by the potential buyer, hopefully with an offer much closer to the asking price, or at least, peace of mind that the domain was not undersold.
Those moments when the end result was “close, but no cigar” for the seller, are valuable in order to expand and improve on one’s negotiation skills for selling domains, and beyond.
For updates, follow me on Twitter.
This is true and sometimes you let previous behavior cloud the next decision.
I had a 500 Euro opening offer on a domain, so I figure no one starts there and will not go higher. I am reasonable and do not send outlandish counter amounts. So I countered at 3000, never another reply. This was through Sedo. Now my mistake was that the name was not bad but 500 euro was cool, I countered because the last two times on Sedo where someone started at $500 I got the sales to $2000 and $2500 respectively. So this clouded the next offer on another domain. The guy offered $500 but this was through email and he emailed twice, so he was showing more interest and I could easily contact this person who I had a name. I accepted the $500 without countering because of the previous unsuccessful sale. Researching the person I probably could have got $2000 for the name.
I have turned low initial offers into much higher offers and even sales but again when my price expectations were reasonable given the name. However, as I have gotten tired of dealing with lowball offers I generally set fixed pricing at what I perceive is fair for the name and avoid wasting time on lowballing domainers who are just looking to stock their portfolio. Well, not totally because I am still selling to domain investors at fixed prices 🙂
rh – That’s a very interesting “behavioral path” 😀 I agree, that rules that apply to one transaction might be completely reversed during the following one. It’s all about timing, how desperate one is to sell and confidence about realizing the buyer’s capabilities.
Leonard – I fully agree on setting at least a minimum price that *has* to be crossed in order for an offer to get through. Otherwise, you’ll be receiving “reg fee” offers non-stop.
What do you mean by very interesting Theo? I think my logic on the Sedo offer was right, on the email one it was wrong. Sedo offers all come in the same, but the email I had a better sense of this person and their desire. There was the screw up I could have went $3000 and if he balked would still be able to come down to his price. Again IMO
I am there with rh though I got a bit greedy and tried getting $3k more on a $5k offer. The offer came through SEDO and I hadn’t a clue who the buyer was. The domain was a general two word domain dot com which is pretty catchy but limited to a small industry.
Perhaps one day they will come back, or not. I will use this as a lesson to just accept the 5000% profit I would of made off the hand registered domain.