Prices, Gouging and Haggling for Internet Domains?

GregStevensLA asks: "I'm considering paying for a 'premium' domain name for a small web start-up I want to form. The company that currently holds the domain name is offering it for $1500, but they made it clear to me that they expect a counter-offer and are 'willing to make a deal.' I've never done this before, and I have no idea what a reasonable counter-offer is. If I say 'I can't go above $1000' am I being too easy? Should I try to push for lower than that? My understanding is that these prices are hugely inflated anyway (i.e. pure profit going to companies that probably scooped up the domains for free). In some sense, paying anything beyond a registration fee is gouging, in my opinion. I don't want to be conned... on the other hand, this is the reality of business, and I don't want to come across as amateurish. Does anyone have any advice for this new-comer to domain name purchasing?"

Comments

Let's get this point out of the way

[linvir]

Let's get it out of the way early, because I can feel this wave of antipathy coming...

Please do your best to find an alternative first. Look into alternatives before succumbing and compensating these worthless parasites for their land grabbing.

Find a better name.

[nxtw]

Don't give these cybersquatting bastards money. If cybersquatting wasn't so profitable, the cybersquatters wouldn't exist.

Don't Buy It

[mysqlrocks]

I refuse to give money to domain squatters. Buy another domain name, be creative. Domain names become less and less important every day. Focus on SEO and other ways of getting people to your website. The domain name just isn't that important unless you're going to do a lot of non web-based advertising (radio, TV, print, etc.). You can pay for a lot of clicks on Google AdWords for $1000.

Re:Don't Buy It

[Glonoinha]

Actually Google wasn't even a word - they made it up because googol was already taken.
Yourname.com (or whatever) is already taken, so make something else up. If it can work for Google, it can work for you.

Price Gouging

[Distinguished Hero]

Can someone explain price gouging to me? If someone offers to sell you something at a price that you consider too high (gouging), you don't buy it. If someone offers to sell you something at a (high) price, and you agree to pay the person the money, that means that whatever you are buying is worth more to you than the money that you are offering in return (therefore not price gouging). Since (almost) all transactions are voluntary, and people engage voluntarily in transactions only if they think it is to their advantage, how can price gouging exist? Can someone clear this up for me?

Re:Price Gouging

[chill]

It's very simple really.

All domains are worth precisely $12. No more, no less.

If someone has registered a domain, and is offering to sell it to you for more than that, they're nothing but leeching parasites, or as the PC like to call them, "cyber-squatters".

Don't feed the parasites.

Bullshit. There is such a thing as supply and demand. Domain names have features such as being easy to remember, have connotations to other items, being short, etc. This is why something like gmail.com is much more valueable than MyCantRememberTheNameForEmailButThisMightBeIt.com or asdf1324la8h_asdlkjuq7.com.

A domain name is worth exactly what someone is willing to pay for it, no more and no less.

You might want to review some economic theories postulated after the 17th Century. What you're espousing is called the "natural price" in Pre-Classical Thought.

I fear your business is not long for this world

[wowbagger]

I fear that your business is not long for this world. My reasoning is this: You are considering spending a large chunk of change for a domain name from a cybersquatter, rather than striking out to find an unused name you can register for a percent of the money. Given that ALL small businesses starting out are cash-strapped, the fact that you are willing to waste your limited money in this fashion makes me doubt you will spend your other money wisely. The fact that you then turned to Slashdot for advice on this would tend to confirm the hypothesis that you are not really thinking coldly and rationally enough to found a successful business.

I don't want to sound harsh, but I do think you really need to step back and reconsider your plans - perhaps you can locate a local college where you might get a dispassionate third party to help fix you a nice big bowl of Reality Checks.

I've watched too many businesses fail because the founders, while having the best of intentions, made bad decisions because they were not willing to face the harsh, unpleasant facts.

Please - do prove me wrong. Be successful, and when you are successful, feel free to email me and say "Boooya! In your FACE Wowbagger!" If you can be successful you will have earned the right to do so, and I will congratulate you.

But if you keep doing things like seriously considering spending $1500, or even $100 on a domain name when you are just starting out - I don't expect that email.

Invest in something useful

[dereference]

It costs less than half of that to register yourself a unique service mark or trademark in a couple relevant classes. It's just as intangible, and you do need to do some research up front, but it keeps its value far better than any domain name. It can take months to complete the process, but if you've done your research the process itself is painless and can be done almost entirely online. As an added bonus, if your registration is successful you can petition ICANN to transfer any (new) infringing domain names to you, as the rightful owner of the mark (you can't necessarily grab existing infringing domains as far as I know, but then again you're going to look for a better name anyway, right? Yes, I thought so).

Buying a Nolo book on legal protection is definitely well worth the $30-$50 investment, and the knowledge gained will carry over to any new businesses you might decide to start. Don't even consider paying a huge chunk of hard-earned money for a domain name without at least understanding the basics of legal rights that do (and don't) convey with it.