How Don Wettrick of StartEdUp Teaches Life-Changing Innovation Secrets to High School Students
This article was originally posted on Verge
1. Look into the history of the domain name.
Great domain names come with history and that’s not always a good thing. Look into the domain from a search engine optimization perspective and hire an expert if necessary. How many websites link to this domain determines how well Google will show it in their search results. You may also find tens of thousands of spammy links that may get your new website penalized down the line.
2. Email the seller from another account.
Anytime you buy a domain name, the seller will always look you up first. You better believe that if you have a business and they see dollar signs, the price instantly goes up. I always send the initial email from “another” email address with a different name. It separates the initial price jack from the beginning.
3. Ask about use.
Find out from the seller about how they used it and if there is anything they can tell you that will help you build it out. It makes the transition smooth because there is a better understanding of how it was used.
4. Look into leasing the site first.
We worked on a new idea a few years ago and wanted to buy a specific domain. Before we got into the discussions of a very high dollar amount, we built a contract with the partner to lease the domain. Working with them on a contract, as well as seeing the transfer go through smoothly, gave us the ultimate confidence that we could buy this domain and trust that there would be no funny business!
5. Let a business broker facilitate the transaction.
If you are buying an existing online business, make sure you use a competent business broker (like digitalexits.com) to facilitate the valuation, transaction, and purchase agreement. If you are just buying an existing domain and not a whole business, make sure to check any IP — like trademarks or copyrights — so that there are no conflicts. Check that the domain wasn’t ever blacklisted anywhere.
6. Use a third party to prevent fraud.
I always use Escrow.com, which acts as a third party between the buyer and seller, in order to make sure that the domain is properly transferred over to the buyer and the agreed upon amount is received by the seller. Especially when dealing with large amounts of money and someone you don’t know, a third-party service provides peace of mind.
7. Work with an attorney to avoid surprise liabilities.
Be sure to work with an attorney so the purchase agreement is clear that you are not responsible for any potential debts or liabilities from before you take over the domain. The last thing you want to buy are any outstanding legal disputes involving the domain.
8. Have a written agreement.
Any sale should have a contract or agreement form that formalizes the process and provides protection from any type of fraudulent activity. At least you then have a basis for any legal action, should it come to that.
9. Make sure the business, not an individual, owns the domain afterward.
Of course, you should use escrow to make sure you get what you pay for, but the number one domain-buying error startups make is to allow an employee or partner to register the domain in their name. It’s expensive, and likely futile, to attempt to have a domain reassigned if relationships go south. If you’re going to invest in building a brand around a domain, make sure it’s under your control.
10. Be prepared to walk away.
Many domain owners ask for ridiculous amounts of money for a domain they know a company wants, but however much you might like a domain, it’s not worth busting the bank for. A “.com” is nice to have, but in an era of thousands of generic top-level domains, it’s not going to make a massive difference to the success of your business.