Selling a Domain Name to an End User: Guest Article

The story of one domainer who sold his domain to “an elephant”.

[Editor’s note: Many of you know Steve, a frequent reader and commenter on Reglike. He has a great story regarding selling a domain name to an end user. Although he can’t retire on the sale, he turned an investment of under $100 into $15,000. Some of you have similar stories. For everyone else, here’s a little inspiration, told in his own words.]

What ought to you do if and when an end user contacts you regarding one or more of your domains; especially if that end user is one of the giants of industry (i.e. an elephant)?

Perhaps a recent sale to one such elephant can provide some useful guidance.

Back in late 2002 or early 2003, while competing with others over the daily drops long ahead of the sun came up (back in the “good ol’ days” when they could still be bought for just reg fees), one of the domains that caught my eye was Healthify.com. While such a domain would hold little interest to many if not most, I felt reasonably certain that—since its base word, Health, was a major worldwide field/industry; and therefore wanting to “healthify” “things” i.e. oneself, food, etc was logical even if the term itself was not widely used— registering it could prove to be worthwhile.

This fact, when combined with the additional factors of it being both just one word as well as a golden .com, made the decision easy (I would not have then—and still would not today—register Healthify in any other extension than .com). When taken together, this handful of factors also led me to price it for resale with an asking price of $25,000 and a minimum bid of $15,000. I felt comfortable that an end user firm; whether startup or existing; ought to have no qualms regarding making what would logically be only a modest investment in one of their most notable assets; their home on the Internet (and possibly their firm name as well).

Then, this past February, a received a phone call from a friendly guy inquiring whether I’d consider selling Healthify.com. Following telling him that it was in fact for sale; and that it had an asking price of $25,000 with a minimum bid of $15,000, I asked him how much he’d like to offer. When he stated he’d like it for $7,000, I nicely declined. I then asked him what the most was he would like to pay for it. When he stated he could go as high as $8,000, I thanked him for his interest and offer and asked him to review the market/economic explanation I provide with all the domains I post for sale at my site.

Following we hung up, I did a quick check on Google and Yahoo and found that the sizable multinational corporation General Mills was running a “healthify” service on one of its web sites, where they’d take food recipes and “healthify” them (make them healthier); counting of course via the use of General Mills products.

A couple of days later, he sent me the following e-mail, using a gmail account to mask his employer:

“Thank you for taking the time to speak with me, the other day. I have evaluated my budget, and I can squeeze $10,000. Would you accept $10,000 via Escrow.com (I will pay the escrow fee)?”

While chuckling to myself since I was now virtually certain that he was working on the behalf of, if not actually employed by, General Mills (though he never did say, and I didn’t ask since it wasn’t germane to what I was willing to accept for the name); I again nicely declined his offer.

Following giving it another week, I e-mailed him back to see if he was still interested. While my intent in doing so was to discuss possibly financing the sale at a 15k price; even though General Mills obviously didn’t need such assistance; I received a pleasant surprise when he responded that he was now willing to buy it for the 15k minimum I was looking for (I guess he was able to “squeeze” his budget a little harder). We closed the deal a couple weeks later.

Would General Mills have paid more than $15,000? Impossible to know. But, in light of how little I had in it, the fact that they were the only ones to inquire regarding the domain in the 5+ years I’d owned it (indicating that future offers were likely to be few and far between), and that this multi-billion dollar/year giant had not quickly acceded to paying what would be far less even than a rounding error for them, I was comfortable with the 15k.

If you haven’t by now had the opportunity to experience such, may your own elephant dance be as interesting, enjoyable, and profitable.