Will Not Use DropCatch.com

[DomainVP]

As many of you know, DropCatch.com will catch a domain that has been backordered, and opens the auction open to the public. Great for them, terrible for being a domainer.

There was an auction for a name, which I have a steady buyer for in that niche. Max I have ever paid for a name in that niche was $150, and I easily sold for $1k+.

There was only myself and another domainer that placed a pre order. Over the next 3 days four more bidders came to the table, and the auction quickly went from the initial backorder price to well over $700 USD.

The only bidders were myself, and a 3rd party who did not backorder the domain, but who came along in the final 36 hours.

The profit margin & risk no longer made sense to compete on the name, so I was out.

If this is the evolution of dropcatching, you better get your names where you can and hold on tight. I never thought I would find myself saying, "I wish NameJet caught that one."

My only consolation is that I cost another party hundreds of dollars, that went to DropCatch of course...

Good for DropCatch, bad for us all. Just something to consider when ordering names.

What are your thoughts?

 

[DomainVP]

You seem to be hung up on the fact that you "did work" by placing a BO. That's nonsense.

I spend about 2-3 hours every day looking over domains.

Myself and one other person in the entire domaining world backordered that name, and along comes an end user who was most likely notified of the auction. Of course it makes me mad; had NJ caught that name it would have been an easy $1k+ flip, possibly even more.

Is it "fair"?

Well what's fair in this world Keith? Nothing. There are children who have no access to clean water or food, so my gripe with DC seems very insignificant when put into the grand perspective of things.

However, for me, it is a matter of principle.

In the end... having principles is rarely profitable for anyone so it is what it is.

It is also my choice not to support a service that profits from my work. I would have rather had the other guy get the name without competition, rather than earn DC $700+ by me placing spiteful bids towards an end user who showed up late to the party.

I may place orders with DC, however if there is competition outside of initial backorders I won't even bother; in fact, I came up with a name for when this happens to an auction. I call it, "A fate worse than NameJet."

 

[Edward Smeu]

This is archaic thinking and logic. As if companies who take huge risks shouldn't find ways to maximize profits. If Dropcatch were publicly traded they would be acting irresponsibly to NOT open auctions to all willing participants!

If protecting my business is 'archaic thinking and logic' then I would advise everyone to think the same way.
I don't really care about dc and their strategy for monopoly in an industry without regulations whatsoever. I don't care how much they invested and what risks they took but when they rely on domainers to help them maximize profits by backordering domains and then offering those to end-users, domainers lose money with every public auction they hold. What the hell?!
Another thing, you are replying to mostly every user who is against dc's strategy and I don't get why is that because when reading this thread there is an overwhelming majority who agrees with what i said above.

 

[Keith]

If protecting my business is 'archaic thinking and logic' then I would advise everyone to think the same way.
I don't really care about dc and their strategy for monopoly in an industry without regulations whatsoever. I don't care how much they invested and what risks they took but when they rely on domainers to help them maximize profits by backordering domains and then offering those to end-users, domainers lose money with every public auction they hold. What the hell?!
Another thing, you are replying to mostly every user who is against dc's strategy and I don't get why is that because when reading this thread there is an overwhelming majority who agrees with what i said above.

You think they're pitching domains to endusers? Don't we all? That's some revelation.

Here's what people are missing here. Your BO doesn't matter. They will catch deletions without any BO's and list them for sale. It's also not the responsibility of drop catchers or registrars to make sure domainers make money.

Don't like the system? Don't use it. But when people start using words like "unethical" it's ridiculous.

 

[Edward Smeu]

@Keith Everything is kinda unethical in this industry, dc just took it to the next level. I obviously don't support what they are doing and do not use them. Creating a monopoly is against regulations in any industry though so if they are aiming for that (for sure they are) then we will all lose.

 

[Keith]

@Keith Everything is kinda unethical in this industry, dc just took it to the next level. I obviously don't support what they are doing and do not use them. Creating a monopoly is against regulations in any industry though so if they are aiming for that (for sure they are) then we will all lose.

How is the attempt to grow a business a monopoly? There are loads of other places to backorder domains and participate in auctions.

 

[Edward Smeu]

@Keith this conversation is going nowhere so let's stop here, at least I will. I respect your opinion but I maintain mine.

 

[DNabc]

I spend big six-figures in backorders with closed auction model companies (SN, NJ and others) and zero with open auctions. The day they switch models it's the day I'll stop using them as much.
My research time is valuable and I don't work for free (I get really good, but unnoticed, names directly to my account). With them I never know, so I haven't used their service, it's a pity.

However I must say I respect all opinions, it's a nice business model for them, it just doesn't work for me. They are efficient and get a lot of names, but I'm not very comfortable with that process.
Perhaps one of these days I'll try them but right now my focus is elsewhere.

 

[Name Trader]

Let's examine the claim that your valuable research is given away for free.

2 backorders placed at DC and 10 bidders by the time the auction closes. All these additional 8 bidders, may all have placed bids at another backorder company. They have all done their research and come to the conclusion it's definitely worth a bid. So your valuable research is not being given away for free. All the bidders have done their research. To carte blanche say you are giving your research for free, is not correct. Let's say 2 of these 8 bidders have not backordered anywhere else. Of course, the doors are open to it to be taken for free, but without knowing what your research showed, they have no good idea how they will sell the domain. It's a big gamble on their part. I would be smiling if I backordered at DC and the domain sold in the mid-high $xk range. These people are fools if they think they can sell these domains for a profit, in a reasonable time-frame. If that is the case, then these 2 people could actually be end-users. I actually think, that Reberry's strategy, at least with HugeDomains, is to actually target end-users. So now we have a marketplace which caters to domainers and end-users. This is only the beginning. What happens when end-users become more aware of DC? Shiver......

I think the main reason for the complaints in this thread is because people see their profit margins are being dramatically reduced. They could still win these domains but at reduced selling margins. This unfortunately, is going to be the new reality if prices don't rise in general.

! also think, DC's strategy (from a business perspective) is a good one. They've stolen a march on their competition big time by investing in hundreds more registrars, and consequently capturing more domains. And they are maximizing their revenues by having these open auctions. I don't see anything unethical in what they have done. It's the free market working as it should.

Maybe some of these complaints should be fired back at the DC competition. Why are they not competitive any more, and what are they going to do to get back their market share they have lost.

And finally, as @Keith so eloquently points out, if nobody bids at DC then DC just capture it for HugeDomains anyway. So I think it is important to consider a drop strategy which includes DC.

 

[DNabc]

DC doesn't catch all good domains, some not even them know how valuable they are (and of course they cannot buy 2 million names per month). My problem isn't just with the open auction... Because they catch dozens of daily names for their own portfolio how do I know that I'll be delivered the name if I have the only backorder?

 

[Name Trader]

You have Reberry's word that he will not capture any domain for HugeDomains which has been backordered by DropCatch. So I think you are clutching at straws there until you can actually provide evidence that he has actually done that.

DC sure doesn't catch all good domains, but I would say in general, they catches the majority (60%+) of the good ones. All I can say is thanks that SN/NJ haven't given up the ghost yet

There is nothing unethical about the open auction system, imho. That's isn't to say I wouldn't prefer a closed system, where bidding is restricted to those with backorders. Why? Because obviously prices would inevitably be lower. But that's a greed thing

 

[DNabc]

"clutching at straws" ? I asked a simple question because I don't / didn't know (as I honestly mentioned) and I referred nothing as unethical (only not being comfortable with).
In truth if domain prices for pending-delete raise a lot I'll just focus my time elsewhere, there are so many venues to keep growing my business... And I already have thousands of domains.
I no longer stress with this kind of stuff, life is so much more than this.

 

[Name Trader]

@DNabc - My post after yours in this thread was not directed solely at you. There are about 4 people bashing DC in this thread. It was directed all of you. So if the "clutching at straws" remark, sounded harsh, I apologize. Because Reberry has stated categorically, that any domain backordered at DC would be excluded from DC's HugeDomains sweep of the drops. Hence the "clutching at straws" remark.

I know you didn't say that the open auction was unethical. But others have. I was merely restating my position, that imho, it isn't unethical.

One thing is for sure. DC have had a great influence on the drop catching market. Firstly with their sole relationship with HugeDomains exclusively, and now that they have opened up to everyone. Then adding all those additional registrars was a no-brainer (but probably expensive) has put them in the driving seat as far as drop-catching is concerned, IMHO.

 

[Name Trader]

What was probably unethical is those 4 registrars which nobody will name who had their knuckles wrapped by Verisign recently, for manipulation of domains which they had registered, which didn't drop as they should (as far as I can tell from the posts on NamePros).

 

[DNabc]

Apologies accepted, I haven't been here often, especially lately for health reasons.
After the domains are theirs they sell them however they see fit, that is not unethical, it's up to you to decide if you want to participate. Is that good for domainers? No. It's terrible.
My only doubt was if I would be competing solely against him in those situations I mentioned.
If not, that is fair. Doing my homework for a competitor wouldn't be good

 

[Jasonn]

there is nothing "wrong" with what dropcatch is doing but i don't have to like it. i can only imagine those who are singing dropcatch's praises don't really backorder much. like or hate dropcatch, if you backorder often you are now going to shell out more money to participate and we all know that auctions bring out the competitive side of people. they will bid simply because someone else is bidding. a number of people there appear to have deep pockets who will bid on anything with bids. the idea, well if he wants it, it must be worth something so i want it too. to assume all bidders have done their research is just that, an assumption. if i don't research drops all week and just choose to research ones dropcatch has at auction, its in no way comparable to the guy who is looking at the raw lists and backorders before the backorder deadline.

 

[Domainace]

Stu, those were some big assumptions. I could easily say the reverse - that 8 out of 10 bidders didn't do their research, and were only there because it appeared in DC auctions. Big names, sure, they are not secret. But the under-the-radar names are hurt by the process. To manually pick one name by scouring 1000s of names takes some work. The same name, when presented among a handle of other choses names in the DC auction, will be easy to spot.

A bit off topic, but I can't see how end users will ever be a major factor at these auctions. They would have to be familiar with the process and, more importantly, they would have to be lucky enough for the name they want right now to be coincidentally expiring. That will always be a small fraction of the auction market.

There's no doubt they are very smart at DC. Of course their model is not unethical. It sucks for domainers, but it's just business. I am wondering how their current model will work out for them during the next economic downturn - when small businesses decide it's not a god time to splurge on a domain name. I expect we will see a flood of drops from Huge Domains. And a flood of drops from newer domainers who overpayed at auctions with inflated dreams of eventual sales. And that's happening at all auctions these days.

 

[Name Trader]

@Jasonn - I'm only singing their praises because, in my book, they have demonstrated they are prepared to invest in infrastructure, in order to be more competitive than the opposition (SN/NJ), and they have succeeded in taking market share from the competition. I take my hat off to them for that. Also, they have weighed up whether to have closed or open auctions correctly. They are making more money by having open auctions. None of that is unethical. Just because SN/NJ continue with closed auctions, doesn't mean the market leader needs to follow suit.

It's true that I am a sporadic drop-catcher, but I have stated I don't like the open auction model, because it means having to pay more for a capture, and I'm a profit kinda guy. But it is a reality that the most successful drop-catcher on the planet utilizes open auctions. You have to live with that or go play in a much smaller pond. You might even find great success in that smaller pond.

I understand the mechanics of auctions, but it is entirely up to the bidder how much they pay for a domain. If they overpay, that's entirely their fault.

To assume that no bidders have done their research is just as much an assumption. Actually, I don't see much difference between your two assumptions about research, one seems to be quite smart and one seems to be a lot of work. If you are in the latter category, and continue the same way in a changed environment, you might end up in the same place as the dodo (just an expression, no offence is meant by it).

 

[Jasonn]

@Jasonn - I'm only singing their praises because, in my book, they have demonstrated they are prepared to invest in infrastructure, in order to be more competitive than the opposition (SN/NJ), and they have succeeded in taking market share from the competition. I take my hat off to them for that. Also, they have weighed up whether to have closed or open auctions correctly. They are making more money by having open auctions. None of that is unethical. Just because SN/NJ continue with closed auctions, doesn't mean the market leader needs to follow suit.

It's true that I am a sporadic drop-catcher, but I have stated I don't like the open auction model, because it means having to pay more for a capture, and I'm a profit kinda guy. But it is a reality that the most successful drop-catcher on the planet utilizes open auctions. You have to live with that or go play in a much smaller pond. You might even find great success in that smaller pond.

I understand the mechanics of auctions, but it is entirely up to the bidder how much they pay for a domain. If they overpay, that's entirely their fault.

To assume that no bidders have done their research is just as much an assumption. Actually, I don't see much difference between your two assumptions about research, one seems to be quite smart and one seems to be a lot of work. If you are in the latter category, and continue the same way in a changed environment, you might end up in the same place as the dodo (just an expression, no offence is meant by it).

I've never said its unethical. There is nothing "wrong" with it, I just don't like it as it effects me negatively. i don't find it wrong to express by dislike for their system. i will say what they have done over the past 5 years is impressive. sure, it sounds smart to let someone else do all the heavy lifting but dropcatch relies on *someone* to do the dirty work of finding backorders and submitting them. If everyone just waited around for someone else to do it, their model wouldn't work.

 

[Domainace]

To assume that no bidders have done their research is just as much an assumption.

That was my point. Though obviously I think my assumption is better

one seems to be quite smart and one seems to be a lot of work. If you are in the latter category, and continue the same way in a changed environment, you might end up in the same place as the dodo (just an expression, no offence is meant by it).

I think both smarts and hard work are required. I mentioned earlier, though, that I get better returns from my hard work digging than from piggy-backing off another's work. And I do both. The problem with piggy-backing is that it doesn't really require especially smart work, so there will usually be much more competition and a lower profit margin.

 

[Keith]

dropcatch relies on *someone* to do the dirty work of finding backorders and submitting them. If everyone just waited around for someone else to do it, their model wouldn't work.

This isn't a true statement.

Hugedomains will simply catch the domains and list for sale if there are no BO placed at Dropcatch. They aren't waiting for anyone to do the dirty work as they are way ahead of the pack.

 

[Jasonn]

This isn't a true statement.

Hugedomains will simply catch the domains and list for sale if there are no BO placed at Dropcatch. They aren't waiting for anyone to do the dirty work as they are way ahead of the pack.

i understand they're both owned by reberry but regardless if reberry catches it for himself or not if people don't backorder domains they've found in pending delete lists, the dropcatch.com model itself doesn't work.

 

[Name Trader]

@Domainace - How long is a piece of string? We have no information about the actual ratio of people who have done their research and backordered elsewhere vis-a-vis those who have done no research but participate in the auction. I just put forward the proposition which seems closest, for me.

I think for anyone who does their research on a domain in the drops on "under-the-radar" domains should not use DC, but continue to backorder via SN/NJ and others. Then, if it is not picked up by DC, you genuinely know it was an "under-the-radar" domain, which you will win outright or with only a few bidders in a closed auction. If it is picked up by DC, either as a drop-catch or for HugeDomains, then you can probably say your assumption about the domain, were incorrect. And you still have the possibility to capture the domain, albeit probably at a higher price.

The only benefit I see for using DC is to prevent the domain being picked up for HugeDomains. The downside is the increased competition, unless you were lucky enough to be the only bidder.

An economic downturn isn't good for anybody. I think the drops from overpriced captures will lag the economic downturn, because the buyers only need to pay $8.50 to renew a domain. I could see that in an extended economic downturn, some overpriced captures would drop, for cash flow reasons. I personally think that about half of HugeDomains portfolio is already crap. They would definitely have to let many domains go, unless they decided to ride out the recession. That is going to cost them. But HugeDomains are in a better position than anyone, since their cost price is only $8 a domain. Not the $xxx-$xxxx paid at DC auctions. Their biggest decision would be which domains to drop and which to keep.

 

[Keith]

i understand they're both owned by reberry but regardless if reberry catches it for himself or not if people don't backorder domains they've found in pending delete lists, the dropcatch.com model itself doesn't work.

I see your point but we both know that domainers can't resist platforms like Dropcatch. This is a vicious business to be in for sure!

 

[Jasonn]

I see your point but we both know that domainers can't resist platforms like Dropcatch. This is a vicious business to be in for sure!

Indeed it is. Its possible reberry started dropcatch.com because the hugedomains method of catching so much and waiting for sales to come isn't generating enough income to justify holding so many names. i could be very wrong but i highly doubt he started dropcatch just because he is such a nice guy and wanted to give the world access to his great catch rate. with dropcatch he might not making 1800-2500 per name but every name caught is sold immediately for cash instead of holding and waiting.

 

[Jasonn]

@Domainace
I think for anyone who does their research on a domain in the drops on "under-the-radar" domains should not use DC, but continue to backorder via SN/NJ and others. Then, if it is not picked up by DC, you genuinely know it was an "under-the-radar" domain, which you will win outright or with only a few bidders in a closed auction. If it is picked up by DC, either as a drop-catch or for HugeDomains, then you can probably say your assumption about the domain, were incorrect. And you still have the possibility to capture the domain, albeit probably at a higher price.

I don't really count names caught by reberry that go to hugedomains as "not under the radar" as he puts out such a huge net with his automated software, i doubt he even looks at what it catches every day. regardless even if you find a nice domain all it takes is one other person in the world to find it, backorder it at dropcatch and its gone (unless you want to overpay). that domain may have been classified as "under the radar" but once it gets eyes on it, suddenly there are people in line to bid.