2 Rules You Must Follow When You Negotiate Website Purchase Offers by Email

April 30, 2015  |   How to Buy & Sell Websites   |     |   Comments Off on 2 Rules You Must Follow When You Negotiate Website Purchase Offers by Email

Ideally, in business transactions, it is best to negotiate offers and counteroffers face-to-face or by phone. However, this is not always possible, especially in today’s global environment where buyers and sellers are often not in the same city, and increasingly, are not even on the same continent.

Domain names and websites are a very unique asset class in that buyers can purchase these assets and operate them from anywhere in the world. As such, negotiations between buyers and sellers are generally done either over the phone or by email.

Generally, website sales which are handled by professional website brokers are negotiated over the phone. However, there are situations in which the time zone differences do not permit scheduled phone conversations and negotiations. This leaves us with the option of negotiating website sales by email.

Email negotiations are actually very common. Because you can’t hear the other party’s voice or see them as in phone or face-to-face negotiations, email has different rules in negotiations.

These are 2 important rules you must follow when you negotiate by email:

1. Use Figures to Explain Your Offers/Counteroffers

Website buyers and sellers often get very emotional during financial negotiations. And they make offers and counteroffers based on emotion without any logical basis for their numbers. Emotional buyers and sellers will sometimes throw out numbers that don’t make financial sense.

In a face-to-face or phone negotiation, it is easy to simply tell the other party that they are not being reasonable. And the counteroffers can continue to go back-and-forth relatively seamlessly.

In an email negotiation, if the other party thinks that there is no logical basis for a counteroffer, they may interpret the counteroffer as being ridiculous and choose to simply walk away. There is no way for the other party to see the face or hear the voice of the individual who made that offer. So they can’t assess intelligently whether it was made seriously or if it was a joke.

This is the major problem with email negotiations: a great deal of nonverbal communication which is essential in negotiations gets lost in translation. It is very difficult to tell by email whether a buyer or seller is serious or not.

As such, it is extremely important to be very clear by email and frame your offers within a reasonable context.

For example, let’s say you are the website seller of a website priced at $100,000. And let’s assume that a website buyer has emailed an offer of $75,000.

Your initial reaction may be to be offended by such a low offer. But it is a mistake to simply email back that you are offended by the offer and go into a rant. You should email back with a counteroffer defined within a measurable context.

You could go back to the buyer and say his offer is too low but you believe that based on a specific multiple of cash-flow of 4, the buyer should pay at least $90,000 for the website. In this way, even though the buyer cannot see you or hear you, he will understand that you are a serious seller making a counteroffer based on logical numbers, and you are serious about doing a deal.

The buyer may then come back with another counteroffer using his own multiple of cash-flow of 3.5. This is good because you have now provided cash-flow multiple as a valuation tool around which reasonable offers and counteroffers can be proposed.

2. Don’t Express Anger and Emotion by Email

When Internet users sit behind a computer, as you see in controversial social media comments, they tend to say more outrageous things than they would otherwise say by phone or in face-to-face interactions.

You must avoid doing this at all cost when negotiating a website business sale. Always be a professional.

If a buyer or seller gets angry or emotional in a face-to-face or phone negotiation, it is easy for the other party to understand the emotion that they can see or hear. They may not like it, but they understand it.

The problem with email is that emotions translate into long written rants. Most readers will not read the rant carefully to understand the message within it. Therefore, whatever emotional message the writer wanted to transfer to the reader is lost. This is where negotiations often fall apart.

When negotiating by email, it is extremely important to keep the email communication as brief as possible. Try as much as possible to remove emotion from written email messages.

In fact, a rule of thumb is that if you find yourself feeling emotional, especially feeling the emotion of anger, step away from the keyboard, and if possible, respond to the email message 24 hours later.

As they say, when you’re angry, “sleep on it.” Do not destroy a negotiation just because your feelings were hurt.

Your Objective is to Close the Deal

Always remember that your objective is not to be seen as more intelligent than the other party. Your objective is not to let the other side know how angry or upset you are.

Your objective is to close the deal. So focus your email messages on getting to a price or terms that the other party can agree to.

Do not go into long-winded written rants. Stay focused on your objective. Close your deal.

These are 2 simple rules that you must follow when you negotiate a website sale by email.


Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to Internet companies. He also partners with investors to acquire & manage Internet businesses.

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