Your domain name is your brand. Indeed, very few brands these days can get away with an off-beat domain name or a one that doesn't reflect their company. In fact, many top brands are built off their domain name rather than the other way around; and more than one company has been named after the domain it picked up.
It should come as no surprise, then, that top-tier domain names cost a lot of money. Cars.com holds the record for most valuable, valued at a whopping $872 million.
Now I certainly don't expect most growing companies to spring for a multi-million dollar domain name, but it's absolutely not uncommon for a good domain to go for tens of thousands of dollars. In internet terms, the cost is akin to buying a house. It's often the single largest purchase a brand will make, and it's where your own brand will live for years or decades to come.
So, how do you make sure you're getting the best deal on your domain name? Having gone through the process several times myself, I offer the following tips.
1. Do your research.
Before you approach the seller with an offer, do your research. First, study the domain itself, to see what its history is, how much interest it's generated and what the price has been in the past. Also research the seller. Negotiating with a private seller is very different from negotiating with a professional domain-flipper.
There are a number of different companies and agents out there that will appraise a domain, either algorithmically or organically, and give you a rough estimate of its value. NameCorp, Domaining, Estibot, and Sedo all offer such services, as do many domain registrars. I recommend a personal appraiser more than an automated tool, however, as there are often factors that aren't easily picked out algorithmically but are quite important to a real valuation.
Obviously, a brand-name domain matching your company's will be more valuable to you than what the aggregate history, age and previous usage of the domain may indicate. A history of sales for the domain may also indicate when the current owner is trying to get far more than the domain is worth. So, use professional appraisals as ammunition for negotiations, particularly when the list price is much higher than the appraisal price.
2. Always negotiate.
It doesn't matter if you're a struggling startup with a mediocre Kickstarter response or the hot new kid on the block flush with venture capital: Always negotiate for your domain name. Whenever a domain name is for sale, the owner is going to set a high price in hopes of getting an offer. No one expects to sell for the list price, so you should never expect to buy for that price either.
The only time to be concerned about a time limit for your purchase is when you can verify interest from other companies. Most of the time, you're the only one negotiating for the domain, so you have the leisure to take your time. The caveat, of course, is that you need to initiate this process early enough that you have plenty of leeway before any important launch dates for your company.
3. Walk away.
The key is to play hardball. Domain names may be like houses for online brands, but they're distinctly unlike real estate in that the domain you want likely has very little demand for it. A domain like Dropbox.com is in high demand for brands named Dropbox and for a few other brands that have dropbox-related services, but that's it. How many of those brands are also seeking a new domain name, and have the budget to buy a high-priced domain?