What Is Domain Acquisition?
Domain acquisition is the practice of buying a domain name that’s already taken. For example, in March 2024, Coronet acquired Scaffolding.com for $46,666.
According to DNIB.com, there are over 359 million registered domain names, and it’s becoming increasingly difficult to find a domain name that’s brandable and easy to remember for users.
Not only do businesses and individuals register domain names for themselves (usually multiple ones to avoid cybersquatting), but you also have people engaging in domain flipping. Flipping represents registering generic domains with the sole purpose of reselling them for a profit.
As a result, there’s a growing need for domain name acquisition, which allows you to obtain usage rights of your preferred domain name even if it’s not available.
MORE: Is my domain name available?
The acquisition is possible only if the current owner is willing to sell, and as you might expect, it’s pricier to buy a domain than to register an unused one.
In theory, domain name acquisition is an easy transactional process. You send the money, they transfer the domain name. However, there are some complexities that go into it, which has created a need for domain name acquisition brokers.
You can also opt for a free domain name, but that’s not advisable for a reputable business. Check out our video to learn why:
What Is a Domain Acquisition Service?
Getting the best deal for the domain name you want to buy requires a lot of research and negotiation skills. If you don’t have the time to do that on your own, or if you simply feel like a professional domain name acquisition broker would do a better job of it, you can pay for their service.
A domain acquisition service handles the entire acquisition process for you. When you contact them, you’ll get a dedicated broker, and all you need to do is provide the domain name you’re interested in.
After that, they’ll do all the legwork, starting from identifying the current owner and finding their contact information all the way up to handling paperwork and the domain name transfer. Your only requirement is to make the payment.
Aside from not having to carry out the process yourself, one of the main benefits of such a service is getting a professional domain name appraisal. As with everything, the seller determines the price of a domain name, and it may require some negotiation to get it to an amount you’re willing to pay.
If a premium domain name sells for several thousand dollars, you might be better off choosing a domain name that’s available. An acquisition broker will delve into a domain name’s value, SEO ranking, domain age, and other aspects of a domain name to determine its right price.
MORE: The most expensive domain names
Domain Brokerage: Do You Need It?
Hiring a domain brokerage service depends on a couple of factors. Firstly, if you’ve spotted the domain name listed for sale and you’re fine with the price, you don’t really need someone else to negotiate for you. Acquiring a domain via a broker comes with a service fee, but it may be more affordable in the end if they manage to negotiate a lower price.
Best Domain Brokerage Service
Usually, the commission for a successful acquisition varies and can be accompanied by a fixed fee. Here are some examples (as of April 2024):
- GoDaddy: $69.99 plus 20% commission,
- Domain.com: $99.99 plus 20% commission,
- VPN.com: starts with 15%,
- Media Options: 15% commission ($1,000 minimum),
- Sedo: $69 plus 15% commission.
How to Acquire a Domain Name: 4 Simple Steps
If you decide to go into it without a broker, there are a few steps you need to take during the process. As we’ve mentioned, the process itself is straightforward in theory, but it can take time and some negotiating skills to complete it.
The steps in domain acquisition are:
- Choose a domain name,
- Determine your budget,
- Negotiate with the current owner,
- Carry out the transaction.
1. Choose a Domain Name
The first step is deciding on the domain name and evaluating whether it’s the best choice. You should always think ahead with domain names, especially if you’re looking to pay a premium price for one.
Make sure that the domain name you’ve chosen is brandable and scalable. Answer the following questions:
- Is it limited to your current product line?
- Does it allow you to offer different products or services as you grow?
- Does the name make it clear what your company is all about?
- Is it easy to spell and memorize?
If you’re having trouble picking a name that ticks all the boxes, you can use our AI-powered domain name generator and get 1,000+ catchy name ideas instantly.
One of the factors you should consider is the extension of your preferred domain. Check out our video guide on extensions to make a better decision:
2. Determine Your Budget
When you settle on a name, it’s time to determine its value and decide how much you’re willing to pay for it. A variety of factors go into the domain name’s value, such as:
- Domain type,
- Brandability,
- Spelling,
- Domain name history,
- Universality,
- SEO ranking.
The most popular top-level domains (such as .com, .net, .us, and .co) bring a higher value to your domain than a domain type that’s often associated with phishing and scam sites.
MORE: Domain spoofing
You should also consider the name’s history. A name that’s been active for a longer period is usually more valuable than a newly registered one. But, you should also consider what the website has been used for. If there’s been some fraudulent activity, and Google recognizes the domain as a spammy one, you’ll have a negative SEO ranking and will have to deal with the name’s perception.
Once you take all the factors into account, come up with an amount that represents your maximum limit.
Tip:
If you want to handle the negotiation by yourself but are not sure how to value a domain name, you can hire a domain appraisal service to help you determine the price.
3. Negotiate With the Current Owner
Now, it’s time to get in touch with the current owner and negotiate the terms of the acquisition. When the owner lists a domain on an auction platform, they also list their contact information.
If that’s not the case, don’t worry. The domain name system (DNS) database contains an owner’s contact information for every registered domain name. You can use a WHOIS lookup tool to find the owner’s email address or phone number and get in touch with them.
At this point, it’s all about your approach and the price the owner is willing to accept. If you’re patient enough to go through several back-and-forths, you may be able to lower the price significantly.
According to Joe Uddeme from Name Experts, some of the negotiation tactics you can use include:
- Check for any associated trademarks,
- Run the domain name on SEO tools like Semrush and Ahrefs to learn about the ranking (if the current ranking is not great it can lower the price),
- Find the selling prices of similar domain names,
- Prove that your offer substantially covers any website-generated income.
4. Carry Out the Transaction
Once both parties agree on the terms, it’s time to finish the transaction. In most cases, you’ll complete the transaction via a third-party escrow service. You can draw up a contract (or find a template online) and get legal coverage.
The process is simple. The escrow service of your choice will hold your payment until the owner finalizes the domain name transfer. Once everything is done, they will receive your payment, and you’ll be the only one with the usage rights of your new domain.
Key Takeaways
A domain name that will represent your company and brand values can help you establish your authority online. The bad news is that it’s most likely already registered. The good news is that everything has its price.
Domain acquisition is more expensive than registering a new domain name, but the cost may pay off big time in the long run.
Make sure you do your due diligence and don’t overpay for the name. If the current owner is being difficult, you might be better off hiring an acquisition service to negotiate in your name or choosing a different name altogether.