«
»

Negotiating When Seller's Marginal Cost = Zero

January 17, 2007, 10:00 am

It is an interesting experience negotiating as a buyer when you know two things:

  • Seller has marginal cost approaching zero
  • Seller has lots of competitors who, for my purposes, provide equivalent service

In this case, I was calling Network Solutions to transfer my domain name registrations to GoDaddy, because GoDaddy is substantially cheaper.  Network Solutions sent me a renewal letter to renew at $34.99 a domain.  Yuk!  I began the process of transferring these domains to GoDaddy, who charges in the $8 range.  (By the way, I have been very happy with GoDaddy for my registrations and hosting of simple sites).

Unfortunately, I had a problem with the transfer -- I needed an authorization code for each domain from NetSol and was not sure how to get it, so I had to call their customer service.  Like a good rep, the person asked me why I was leaving, and I said it was because NetSol was too expensive. 

This is where it got interesting.  First, he said that I could stay at Network Solutions and pay just $16 a domain.  I told him forget it, it was still too high.  After some back and forth, and his getting the information I had called for, he finally offered $8 a domain.  That is nearly an 80% discount from the rate they first offered me, and is lower even than the 100 year renewal (LOL) they offer for $9.99 a year.  I turned it down, because it was too late and I was already consolidating my accounts at GoDaddy.

However, if there are those of you out there who are with Network Solutions and want to stay, but want a discount, call their customer service (not tech support) number, click the options for "transfer domains away from Network Solutions".  When you get a guy, tell him you need the authorization number on the domain to transfer it to GoDaddy (this is true).  When he asks you why you are transferring, tell him NetSol is way more expensive than GoDaddy.  And then let him run.  I didn't even ask for a discount.  He just kept throwing them out at lower and lower price levels after I turned each one down.

Tags: , , , ,
Category: Economics
  • Don Lloyd

    Warren,

    From the title I thought that this was going to be a discussion of prescription drugs.

    Regards, Don

  • http://blog.neo-libertarian.com/ Chris Welsch

    I had a similar experience buying a new car a couple weeks back. I jumped up from buying used to buying new (the lengthy Asian-style warranty decided it for me) and so I was already over the cap I'd decided to spend. When they pulled me in for the extras, I said no to all of them. However, I admitted the ones that I wanted and the finance guy gave me price reductions on all of them - including two or three price reductions on a security system and several price reductions on a sizable warranty extension. It was interesting to think how negotiable the prices are that, without even trying to haggle, I managed to get him to knock off over 20% on each.