Bidding On and Buying a Domain Name
I did a bad, bad thing.
I jumped into a negotiation without preparing a gameplan first. On the upside, I got what I wanted for much less than I was prepared to pay.
I’ve been thinking about the domain zoomstart.com for a while now. It’s catchy, easy to spell, and it pretty much sums up what I want to talk about with this blog. The domain was in the hands of a reseller and one night a few weeks ago I decided it was time to grab it. I set up an account on Sedo and started the bidding process. It went like this:
- I offered: $150
- Seller countered with $1000
- I countered with $220
- And the seller countered with $930
You can see this is turning into a tit-for-tat game and it’s time to get serious. I don’t like the idea of making a final offer, especially when I’m prepared to pay more and I really want this. That kind of thing usually amounts to an ultimatum and closes off all other options.
But hey, I just jumped into this anyway. I make a final offer of $475. And then I get thrown a curveball … remember all the preparation I didn’t do …
The Seller has the option on Sedo to force the domain name into an auction for 7 days and my bid becomes the reserve price. If there are no other bids, I get the domain, which is what happened.
Something to Keep in Mind
Why would Sedo allow a seller to do this? Simple. They earn a 10% commission from the seller when a domain name is sold. The auction option gives both the seller and Sedo one last chance to bump up their earnings on the sale. And there is no risk because my final offer is still binding if there is no additional bidding.
When you walk into a bank and talk to a financial consultant, they get a bonus commission from the bank for the services and investments they sign you up for that gets larger as the rates they offer you get worse. When you buy a house, the real estate agent is earning a percentage of the sale price from the seller.
Anytime you buy something and the broker is earning a percentage of the sale price, she is working for the seller to get the highest sale price. This is great if you are the seller.
So I paid $475. My budget for zoomstart.com was $1500. I’m sure I could have gotten the domain for much less but in the end, something is worth what someone is willing to pay for it. Just for kicks, here’s what Zoomstart is worth according to Leapfish.
The price was well worth it to me. Now my job is to fill Zoomstart with great posts and make it a great read that’s worth more than that to you.