Raising the issue of price with a seller

[Clinton]

Buyers who've made several purchases in the past know that some of the best deals come outside of the Flippa type "marketplaces". Perhaps you know the seller, or someone has tipped you off about a site that's possibly for sale, or you've seen an exclusive in our BSTE section about a site for sale that nobody else knows about yet.

You start a conversation with the seller, he tells you about the fantastic opportunity here, the ideas he has that he'll share with you, the help he's willing to provide post-handover etc. You then move to talking more confidential stuff like traffic stats, earnings, how well each earning program is doing.

When do you start talking about price expectations?

Most buyers tend to put this off for as long as possible. And when they do raise the question sellers often just lob the ball back into their court. "How much would you be willing to pay?" Arrgghh!

After dealing with hundreds - maybe thousands - of sellers, I've learnt to raise this as early as possible and to take a tough line. If the seller doesn't have a price in mind I don't pussyfoot, I walk away. When they don't quote a figure I believe it's because a) they don't have a clue how much their site is worth (and are going to be disappointed when they find out and change their minds) b) they'd like / expect to get much more than is realistic for the site and c) they are time wasters just feeling around looking for a village idiot who has more money than sense.

What I do now is get the price early on and long before I go spending time examining his business model, his backlinks, his SE rankings or pretty much anything else.

When do you ask for a price? How do you do it?

(The Power Negotation Part I blog post that I just made may also be of interest)

[TrustButVerify]

Clinton, my friend... I'm right there with you.

As a seller, telling the interested buyer to "name a price" you have the upper hand. If the buyer offers high you win... if the buyer low balls you just scoff at him telling him that's ridiculous.

As a buyer it's highly annoying and means the seller is trying to get the highest price possible which usually means a unreasonable price. You could walk away from most sellers who play this game and not miss much.

BTW, love how you negotiated that 250k site for 15k... I'll have to use that later if you don't mind.

[Thomas]

Once I've got enough basic details to be interested, I bring up price straight away. It saves both of us wasting our time if the price they want is far too high.

I'm usually quite up front with my intentions from the start and am usually proactive with my offers. I don't have the time (and I respect the fact the seller doesn't either) to spend half a day chatting about a site if it is clear from the outset it isn't going to end up with me at least making an offer.

I also find the more I talk to a seller and get details, the more I persuade myself it could be a good opportunity - hence why from a discipline point of view it is important to keep on track.

[Clinton]

TrustButVerify, I don't see it so much a case of he who blinks first loses. A deal happens when buyer and seller can come to an agreement. So whether I'm playing buyer or seller my goal is to reach a price both parties are happy with.

As a buyer I like to see the seller's hand early on because in many cases sellers vastly over-estimate the value of their site. Their reply gives me an idea of where they place the value and the reasons they see behind their valuation. If their justification is some asset I don't know about yet then I'm curious and want to examine that asset. If they've picked an over-valued figure that bears no relationship to the site for sale - for example, because that's the amount they owe on their credit card - then I know I'm on to a loser and it's not even worth trying to do a deal like a deferred or conditional payment $250K for $15K.

(BTW, that was not ever a $250K, it was always only a $15K site. At the end of the day, it's what you pay for it that matters, so I'm happy to call it whatever the seller wants to call it)

[hooperman]

When do you start talking about price expectations?

Ideally, once I've got all the initial stats that make me want to buy the site. Actually, I don't mind being first to give a number as my limit is my limit, and it's a rare seller who will undervalue their site.

My "cold calls" generally go something like this:
me: I want to buy your site
seller: how much?
me: it depends on what money the site will make me. Give me your stats.
me: how does "X" sound?

I'm pretty brief and to the point with my emails, so it's not long before we get to the price. I'm speaking from limited experience as most website owners I approach don't want to sell.