For many domain investors negotiation and pricing is some of the trickiest and hardest things to learn. While there is no exact science, experience and a ton of previous transactions help the most, there are strategies you can employ to help with your negotiation and pricing.
Mike stumbled across a very extensive article from Nick Kolenda that deals with the psychological aspects of pricing. The article is very long and detailed, so I would suggest you bookmark it as it is a lot for one reading. Nick also made a video that highlights the main points of the article.
From the article:
Step 1: Determine Your Price
Large companies have an advantage. They can afford cream-of-the-crop marketing research (e.g., conjoint analysis) to find the optimal price for their product. Small businesses don’t have that luxury.
Fortunately, that’s where psychology can help.
Based on research in cognition and behavior, certain prices are more effective than others. Even if you don’t find the exact sweet spot, you can make small — yet powerful — adjustments to maximize the effectiveness of your price. All for free.
In this section, you’ll learn how people process numerical values (and how to choose the numbers in your price, accordingly).
Read the full article on NickKolenda.com
Thank you!
Pricing is a weakness of mine, I seem to leave money on the table and also don’t convert as many sales as I think I should.
Any and all article related to pricing domains are greatly appreciated.
Thanks!
I usually ask for 25-times estibot value and stand firm…this has generally worked out quite well in the past
Well: I own “1stBandWidth.com” which has a $820,000 USD Estibot value. (SOLD in 2000 for $800,000 USD).
If I ask 25-times the Estibot.com value do you think it will sell ???
crickets……..
Thanks for this excellent item. Always good to refresh my mind and also find a few extra items to focus on and keep in mind. In this specialized market the importance of the emotional and financial considerations of the buyer are the driving force.
I just read the entire article. Nick is spot on with his research, suggestions, and conclusions. I have 30 years of experience as a retail executive and can attest to the value and correctness of Nicks paper. There are two comments I would like to add. If you are perceived as a discounter or use an EDLP strategy, price points ending with a 7 or 4 are more effective than ending with a 9 or 5. And, consumer behavior and reaction to pricing is very different in B2B than it is in B2C.
Thank you for this share, It’s a GEM of an article.
Thanks a lot Raymond for this post.
Pretty neat article. Great info when it comes to pricing.
Just crazy to see when it comes to domains, sometimes you can literally guess a price, throw it out there and it will sell. Wonder why that happens at times.
Also, would a domain name purchase be considered an emotional purchase or rational purchase?
-Omar