Domain Name “Minimum Offer” Explained

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When you see a price, even a minimum offer price, that number gets implanted in your brain and your mindset automatically sets the purchase price expectations. This is called price anchoring.

$999 MSRP, Now only $499. By looking at that, my brain is instantly seeing the $500 savings as the $999 becomes the anchor price. I feel that I’m getting a great deal at $499, because of the $500 savings.

But when it comes to domain names and minimum offer amounts, you should actually put on blinders, the majority of the time.

Let me explain.

Most domain name owners own many domain names, not just the one you may be interested in.

The minimum offer amount is only one box of many settings for each and every domain name for the owner to do something with. Most do nothing with the minimum offer option, so it defaults. Others use a batch update feature and set all the domains they own to a random number to prevent general low ball offers.

In general, the minimum offer amount displayed at this point means nothing!

Why even show a minimum offer or even offer the option to sellers then? It’s a great question and one that needs to be looked at by domain sellers and even marketplaces and brokerage services. The reason the minimum offer option is available is because some smart domain owners actually use it to their advantage.

What if you set your minimum offer amount to what you would normally set your buy it now price to?

By doing this, you are utilizing the price anchoring effect to your full advantage. You could sell the domain at the minimum offer amount, or higher, and the buyer would still feel they are getting a great deal. Just be realistic with your pricing though, or you will scare potential buyers away.

You can also use the minimum offer amount to create a "range." The minimum offer amount would be the lowest and your buy it now (BIN) price the highest. Expect a minimum offer amount to be within 70-90% of the buy it now price, and anything under that is going to be hard to overcome the price anchoring. Your best option is to use the price anchoring effect to your advantage and not as a default, or as a random minimum offer amount just to display something there!

What’s happening overall with minimum offer amounts?

  • A domain seller may not wish to hint at a price they would sell at, if there is no BIN price.
  • Prices change often, so it may require constant minimum offer price updating and purchase price updating.
  • Dealing with large portfolios and individualizing prices for each domain is a daunting task.

Market confusion

A lot of buyers confuse the “minimum offer” amount as an expected purchase price or pretty close to it. The majority of the time, this is really far from the truth with domain names. That minimum offer amount is likely a default setting (or a general batch update amount) that could be thousands of a percentage point away from an actual purchase price.

When I see a domain name that is for sale, I want an idea or range of what I may be able to purchase it for. That’s the impression I want to convey, so that both parties don't waste their time. Is there even a chance the domain is within my budget? I don’t want to see a minimum offer of $300, proceed with placing an offer around that amount, and then receive a $300,000 dollar quote back. That $300 is still stuck in my head via price anchoring, and I’m out the door due to price shock as the price skyrocketed from $300 to $300K!

If you're a domain name owner, think about this: Price anchoring is real. Are you setting yourself up for potentially losing a sale because your minimum offer amount on your domain name is a default or group minimum offer setting, not remotely close to what you would actually sell for? What kind of expectations are you setting?

If you're a buyer truly interested in purchasing the domain name, ignore the minimum offer amount and place an offer closer to what you are actually willing to pay for the domain name. Leave yourself a little wiggle room because negotiations are an expected element of any business.


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