Achieving Financial Independence with Domains

Chapter 16: Shooting the Moon

By अक्टूबर 6, 2019 #!31सोम, 06 जनवरी 2020 02:18:32 +0000p3231#31सोम, 06 जनवरी 2020 02:18:32 +0000p-2+00:003131+00:00x31 06पूर्वाह्न31पूर्वाह्न-31सोम, 06 जनवरी 2020 02:18:32 +0000p2+00:003131+00:00x312020सोम, 06 जनवरी 2020 02:18:32 +0000182181पूर्वाह्नसोमवार=202#!31सोम, 06 जनवरी 2020 02:18:32 +0000p+00:001#जनवरी 6th, 2020#!31सोम, 06 जनवरी 2020 02:18:32 +0000p3231#/31सोम, 06 जनवरी 2020 02:18:32 +0000p-2+00:003131+00:00x31#!31सोम, 06 जनवरी 2020 02:18:32 +0000p+00:001# No Comments

What is shooting the moon?

The concept of “shooting the moon” refers to the idea that we often don’t really know what the true price potential is for a domain name unless we ask the question.

Why do we do it?

The reason why we shoot the moon is because of the economic reality that is playing out in much of the world where the rich get richer and the poor get poorer. The GDP per capita data still shows a rising trend but often this hides the sad story of growing economic inequality as the middle class slowly disappears in many economies.  As such, when we price domains for a typical middle-market scenario of say $1500 to $5000, the market appetite for that can appear weak because of the population of financially secure business owners is shrinking as more business consolidates into the hands of a shrinking number of larger businesses.

On the other hand, for strategically important domains, if a larger enterprise or highly capitalized startup identifies your domain as being strategic, often times the situation becomes one of “money is no object”, you have the specific domain they need, and they have ample funds with which to buy what they want.  Now the question becomes whether the seller has the courage to price not for cost, but for the strategic value that the domain represents to this particular strategic buyer who measures value in terms of FTE-equivalents, where FTE stands for “Full Time Equivalent Staff”. For example, in a major US city, one FTE might be $100,000 or more.  So your domain at $100,000 is one FTE for one year.

Also, keep in mind when dealing with larger corporations, that their typical accounting practices when accounting for intangible assets like domain names will be to amortize them over an extended period.  For a large US company, they might amortize a domain over 20 years, or 80 quarters of 3 months each. Well, that means that even a $1,000,000 domain, amortized over 80 quarters, is about $12,500 per quarter, a relatively insignificant sum for a larger enterprise.

What does it look like?

Shooting the moon is relatively simple when responding to Make Offer pricing inquiries. It essentially is about calibrating with your buyer prospect about an open-ended price expectation.  Here are a couple of illustrative examples:

Template #1

Hello <firstname>,

Thanks for the inquiry.

Names of this caliber routinely sell for over $100,000.

We also sometimes do domain leases with a purchase option.

If you have budget, I will do my best to get something done for you.

Happy to advise.

Regards,
Rob

Template #2

Hello <firstname>,

Thanks for the inquiry.

You are probably looking at well into 5 figures USD for this domain.

Alternatively, it is likely possible to do a lease with a purchase option or seller-finance.

Depending on your budget, happy to advise.

Regards,
Rob

Why we don’t give fixed prices too early?

We typically won’t want to give an exact price at this stage in the conversation, as some bidders will actually intend to use that price information with the intent of arbitraging your price after having secured a fixed price from you the would-be seller. In general, it is much better to draw the bidder into setting a price and then pushing that number to a level that is acceptable to you, the seller.

How do we engage a non-response?

High net worth individuals and corporate executives who have ample budget authority will typically be quick to engage and get to clarity around the price scenario. However, what to do if your initial shoot-the-moon response goes unanswered? Well, after about 48 hours, you can chase that initial response with a short check in response that invites further dialog. For example, a simple “I hope you are having a good week.  I am just checking in to see if there is anything further to discuss here.”

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