Thoughts

Andrew Miller

February 11, 2024

Understanding ‘Never Never Land’ in Domain Negotiations

Last week, I posted about an amazing start to the year for us at Hilco Digital Assets and how I saw that translate to the overall domain name asset class and climate. I spent the entire week working on, negotiating, massaging the closing of several large transactions, and in that process, a thought dawned on me that I wanted to write about here. I often talk about negotiation strategies such as the ZOPA (zone of possible agreement). There is also something I call “never never land” or “tweener land”. This refers to a gap so wide between an expected or even desired price on a domain name and reality. It often comes with a lack of understanding of what makes a buyer acquire a premium domain name, and the process that the buy side goes through to make that decision. As a 2x Founder who paid 7 figures for both my domains, a long time investor as well as an advisor, I can appreciate both sides of this. I often say that domains are often not acquired by those whom everyone assumes is the logical buyer. There is also an assumption that a large, cash rich entity will pay “whatever it takes”. Just know, there is always plan B and these companies or people did not get so successful by spending frivolously. Before I agree to help someone buy or sell an ultra premium domain, I must be aligned with the expectations and flexibility, to ensure we have a great ZOPA rather than sitting empty handed in never never land.

Trust the Process

And the above leads me to a conversation I had yesterday on Skype messenger with one of my favorite clients and a good friend, a very savvy, patient domain investor, with whom I have helped do a lot of deals. We have one of his amazing domains that we are overseeing for sale, by all accounts one of the top names on the Internet, and he dm’d me “I don’t know why __.com is so tough”. My reply was “I disagree. This is the nature of the beauty and the beast.The beauty of domains is the returns can be unparalleled, for both the seller and buyer. The beast is there is often no logic, pattern, rhyme or reason. It is not the most liquid asset class. Trust the process. It has worked for 27 years and billions of dollars in value on both sides. It can be tough and then one magical day, it changes on a dime. It may be a result of all the work we put in, or a lucky break. Then it is simply about the art (not science) of a masterful negotiation. Ya, we always wish it were sooner rather than later.” “Correct, Amen” he replied.

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