Okay, you domain name investors out there: how would you suggest approaching a domainer who owns a name that he thinks is worth thousands of dollars ‘ but isn’t? Or should I just sit tight, and wait for the next expiration in a couple of years? I can't believe any other buyer will come to him before that - or that he's even making enough parking revenue to cover the renewal.
My company is a small business that’s had its trade name, which I’ll call ‘Example Widget’, registered since 1995. We’ve operated our Web site as Example-widget.com since 1997, and it’s #1 or close to it on every major search engine for the terms Example widget.
"Example" and "widget" are both popular search terms - but only someone not in the business of serving the ‘Example widget’ market would imagine the name would be valuable for a web site. ‘Example’ buyers only buy custom ‘widget’ products, and insist on speaking with a human at every stage of their order. Those who would be attracted by the word ‘Example’ refuse to buy online, and consumers would likely assume the prices would be high. (Actually, since ‘Example’ buyers purchase their custom widget products in volume, the markups are low. Low markups and high customer service costs do not equal easy money.)
The domain name Examplewidget.com was originally registered in 1996 to sell a book on a related topic. The author and original registrant (with whom I became acquainted) died in 2005, over a year before his domain name registration expired. I backordered that name for the sole purpose of protecting my registered trade name ‘ but somehow, instead of expiring, the name was renewed. It was then transferred to a domainer.
This person attempted to auction the name in 2007 with no bids, then parked it. He has since offered it for sale on Sedo (as ‘make offer’), also without drawing any bids. Any residual value from the original site has long been eroded ‘ the links have all been removed, Examplewidget.com doesn’t come up on any search, and the pagerank is zero. I used twelve different free domain name valuation tools, and the average value of the name was under $50. I imagine any other domain name investor would check at least some of these tools before making an offer ‘ and look for potential end users who might want it.
I only want the name for trademark reasons, and none of my competitors (all of whom use different names) has shown any interest in Examplewidget.anything for years. The .net, .biz, and .us were all previously registered as alternate domain names, and were all abandoned. I acquired them all for registration fee only after they sat unclaimed for months to years.
I recently made an offer of $100 for the name through Sedo, which I thought was generous compared to an average valuation of less than $50. I got a counter-offer in the five figures, which I considered not worth even responding to, so I simply cancelled the negotiation.
Should I make a direct approach? I am willing to pay somewhat more than $100, and I have the current registrant’s email address from before he made his registration private. If so, what argument would be most persuasive:
1) Describing the actual market situation,
2) Pointing out the lack of demand for the other TLD’s, and the number of other related domain names on offer with zero bids (about three dozen).
3) Sending a summary of the valuations I got,
4) Pointing out that I have a common-law trademark, so there’s a dollar value above which it would be more cost-effective for me to bring a UDRP action. (He has already lost one.)
5) More than one of the above.
6) Or simply ‘this is my offer, take it or leave it’.
Thanks for your help.
[edited by: Webwork at 10:13 pm (utc) on Mar 19, 2010]
[edit reason] Tidying up display issues [/edit]