Buying a domain name that is currently a live site

We are often asking about the possibility of buying a domain name that is already being used for a live website by someone else.  Our initial advice is to ensure that the buyer has a very large budget if they intend to buy a domain that is actively being used.  The fair market value (FMV) of the domain does not apply in these cases. Because buying domains that are live sites will require money to get the owner’s attention and sometimes a bit of luck.  While it is not necessarily an impossible mission, buying a domain in use is a very significant challenge. 

We frequently use the analogy that buying a domain with a live website is similar to knocking on the door of someone else’s house that is not for sale and asking to buy it.  It is a pretty safe bet that the owner likes their house, does not want the hassle of moving and would never consider a move unless there is significant upside to sell. The same holds true for someone trying to buy a domain name that is the web address for an active business.  The business is being asked to change their address that is generating revenue, possibly change their brand, lose all SEO value that they have built over the years and they would have to migrate their employees to a new e-mail address.

So what are all these changes worth?  It could be a multiple of profit generated by the business.  It could be an asking price that is off the charts.  Or, if the timing is right; the owner may consider a reasonable price.  There have been cases where we have been successful on domain acquisitions of names that were live sites.  In those case, we found that there are generally two scenarios.  The offer is high enough that the owner cannot refuse and is willing to endure the pain of moving the business to a new domain.  Or, the owner has been thinking about shutting down the business and the cash offer to buy the domain name gives the motivation to act on their thoughts. 

It is important to set your expectations when trying to buy a domain that is a live website.  You should have plenty of money and patience.