domains How to Discover Proxy Bid “Sweet Spot” and Win More GoDaddy Auctions

Alvin Brown · Sep 17, 2019

I share and discuss how to use GoDaddy Aftermarket data to determine a proxy bid amount likely to win more GoDaddy expired domain auctions.

Over the last 18 months and counting, I’ve noticed an uptick in the number of bidders participating in GoDaddy expired auctions. Between auction bots and increased bidder count, closing auction prices for expired domains skyrocket to unbelievable values.

While I’ve not researched data to back this next statement up, I’m guessing GoDaddy’s addition of the estimated value — based on their GoDaddy Domain Appraisal Tool — is likely the culprit to increased activity and inflated closing auction prices.

For instance, expired domain auctions that would have normally closed at or below $50 are now closing anywhere between $300 – $600.

I don’t know about you, but such pricing influx can wreak havoc on a quick-flip domain strategy, especially when considering the average domain hold time is over 400 days or so to flip.

Most domain investors, like myself, don’t sit around waiting and watching expired domain auctions with the ole’ eagle eye. I typically set a proxy bid amount, walk away and hope for the best.

Unfortunately, this once successful strategy’s pricing no longer gets the job done with the exponential swing in closing auction prices.

To gain better understanding as to how much I would need to adjust my proxy bid strategy to hopefully start winning more GoDaddy expired domain auctions, I decided to dive into the details of expired auctions with bids I’ve lost dating back to the beginning of the year.

[ Read and review my analysis of lost GoDaddy auctions ]

Kassey Lee · Sep 18, 2019

Thanks Alvin. So your budget for each domain has increased from $50 to $350. The market must still be hot right now. Where is the recession? Ha ha!

Avijit Roy · Sep 18, 2019

Thanks for sharing.

Alvin Brown · Sep 18, 2019

Kassey Lee said:
Thanks Alvin. So your budget for each domain has increased from $50 to $350. The market must still be hot right now. Where is the recession? Ha ha!

Yup! It's been a strange 18-24 months watching the proxy bid amount substantially increase. I may be at $500 by year end. who knows!?

wwwweb · Sep 18, 2019

It is mainly 1 party, Huge Domains, and not so smart domainers getting into a bidding war with a bot, that likes to stick them with the higher bid.

It is not a reflection of the overall market, other than 1 party using the automated appraisal to bid upwards of 10-15% of the value.

In the long run you will go broke building a portfolio like this, unless you are selling thru existing inventory acquired much lower, and recently sold thru higher.

MTB · Sep 18, 2019

"considering the average domain hold time is over 400 days or so to flip" - where did you get this data from please? I have participated in GoDaddy domains only with a specific end user or website development plan AND a price/revenue strategy in mind. Therefore the proxy bid is directly linked to a business model. I've used it three times, lost twice under $200 USD and won once over $2,000 USD.

Bob Hawkes · Sep 18, 2019

Thanks for the interesting post @Alvin Brown I was particularly struck by the observation about more bidders

Alvin Brown said:
Between auction bots and increased bidder count, closing auction prices for expired domains skyrocket to unbelievable values

It is hard to really track how many active domainers there are, but a number with a long term view have suggested that there seem to be more now, or at least more domains for sale.

Since so many of the experienced voices in the business essentially promoting to those new in the business (after sufficient research and learning!) the .com expired auction route, it is not surprising that we see prices going up, even without the bots. Many helpfully even make lists off the most promising domain names in auction available, which further push interest and price pressure.

While not discounting the wisdom of the expired auction route for many, I wonder if we are not too strongly pushing a single way to acquire domain names.

Just early morning musings from me. My main point is to thank you for another interesting and informative post.

Bob

Alvin Brown · Sep 18, 2019

MTB said:
"considering the average domain hold time is over 400 days or so to flip" - where did you get this data from please? I have participated in GoDaddy domains only with a specific end user or website development plan AND a price/revenue strategy in mind. Therefore the proxy bid is directly linked to a business model. I've used it three times, lost twice under $200 USD and won once over $2,000 USD.

Hi MTB, thanks for the comment. I got the average domain hold time from Paul Nicks' most recent NamesCon presentation

Alvin Brown · Sep 18, 2019

Bob Hawkes said:
Thanks for the interesting post @Alvin Brown I was particularly struck by the observation about more bidders

It is hard to really track how many active domainers there are, but a number with a long term view have suggested that there seem to be more now, or at least more domains for sale.

Since so many of the experienced voices in the business essentially promoting to those new in the business (after sufficient research and learning!) the .com expired auction route, it is not surprising that we see prices going up, even without the bots. Many helpfully even make lists off the most promising domain names in auction available, which further push interest and price pressure.

While not discounting the wisdom of the expired auction route for many, I wonder if we are not too strongly pushing a single way to acquire domain names.

Just early morning musings from me. My main point is to thank you for another interesting and informative post.

Bob

Bob - these are interesting points worth considering, especially having DNAcademy, DomainSherpa and various media options to learn from.

I agree and wonder if expired domains is heavily weighted, especially when considering a good percentage of experienced domain investors state for new domain investors to go light on hand-reg domains, if buy at all.

I'll keep tracking my journey to see what changes occur, a plethora of factors to consider, and how each impacts my overall domain strategy. It's certainly a topic for us all to consider when using proxy bidding in hopes of securing an expired domain.

MTB · Sep 19, 2019

Alvin Brown said:
Bob - these are interesting points worth considering, especially having DNAcademy, DomainSherpa and various media options to learn from.

I agree and wonder if expired domains is heavily weighted, especially when considering a good percentage of experienced domain investors state for new domain investors to go light on hand-reg domains, if buy at all.

I'll keep tracking my journey to see what changes occur, a plethora of factors to consider, and how each impacts my overall domain strategy. It's certainly a topic for us all to consider when using proxy bidding in hopes of securing an expired domain.

It depends what you hang-reg and how much research goes in. A lot of people on NP say they don't hand-reg but there's a treasure trove on Expired Domains if you use the filters properly.

Tof · Sep 19, 2019

Thats the best bet because battling with "huge domains" and the "others" is a losing battle; they'll just keep bidding because they have bigger budgets.

myfavorite · Sep 20, 2019

Thanks for sharing

MTB · Sep 20, 2019

Tof said:
Thats the best bet because battling with "huge domains" and the "others" is a losing battle; they'll just keep bidding because they have bigger budgets.

One tactic I use is auto-email-alerts for specific keywords and domains on expired. It's great to have constant news in my inbox about what's expiring, what's available and how that affects my target acquisition list. You might be doing this already, but if not then definitely something to consider!

BrandPlease · Sep 20, 2019

Great post @Alvin Brown !!!

Going to give you something to check out, but you will need to research yourself & see if you think this holds true.

First: Understand (or make an educated guess) at what automated appraisal system data they are setting their "bots" algos to. Not GDs, in my guess, what are you thinking?

Once you know how the automated appraisal system - fails consistently - at even a crappy algo appraisal, you can search for actual deals.

It will take more hands on research, but maybe a few deals will make it worth your time. How many times have you "auto-appraised" a name, had to change the spelling/context of it, & reappraise (* see exact match traffic + cpc change)?
Well, the change you made, correcting the domain word/phrase (& update all stats) is not global (or even saved as far as I can tell), so the bots never see them. The bots don't bid on what they can't easily scrape.

Hope that made sense & is helpful.

Thanks All,
Brian

Bob Hawkes · Sep 20, 2019

MTB said:
It depends what you hang-reg and how much research goes in. A lot of people on NP say they don't hand-reg but there's a treasure trove on Expired Domains if you use the filters properly

Yes certainly not discounting the expired route, but my comment did not mean hand-reg as the only other option. I think there are real gems to be found in hands who are not using domains but haven't yet let them expire. Also at registrar marketplaces other than GD are occasional gems at value prices and it seems no one is looking there much. It seems to me a whole industry has been built around just a single way to get domains - the GD expired domain auctions (or the other main expired places).
Bob

MTB · Sep 20, 2019

I hand-registered over 100 domains in my first few months of domain trading (this year), and without a developed site at least 50% are totally worthless. Ok, so $500 that I could afford to lose went down the drain but a valuable lesson was learnt. Now I am very careful with every hand-reg that all the checks are completed and I have a very clear plan of how to monetize the domain. One thing I've started doing is long-term registrations rather than new registrations. This may be a controversial comment to some, but EVERY domain in the world has the potential to be monetized with the correct strategy. It can be 132rhb243tjh4btj4hbj5.xyz but with unique content anything is possible. Reminds me of a quote from that Kevin Kostner baseball movie - "build it, and they will come".

Sheogorath · Sep 20, 2019

I just don't bother with Godaddy expired domain auctions.
I only focus on closeout domains.

You will be surprised what gems can be found there.
People can't manually scan all the lists so they miss on some great domains.
I'm sure that if someone would have placed a bid on some of those closeout domains, the final prices at auctions would have been ridiculously high.

It is unfortunate that people think that paying so much for a mediocre domain at an auction is reasonable.
Well, I guess when someone is so rich, money is no longer a concern and throwing it away like that is simply nothing.
Though even for very rich people it should matter, after all it isn't logical to throw away money like that.

Alvin Brown · Sep 20, 2019

Sheogorath said:
I just don't bother with Godaddy expired domain auctions.
I only focus on closeout domains.

You will be surprised what gems can be found there.
People can't manually scan all the lists so they miss on some great domains.
I'm sure that if someone would have placed a bid on some of those closeout domains, the final prices at auctions would have been ridiculously high.

It is unfortunate that people think that paying so much for a mediocre domain at an auction is reasonable.
Well, I guess when someone is so rich, money is no longer a concern and throwing it away like that is simply nothing.
Though even for very rich people it should matter, after all it isn't logical to throw away money like that.

Yes, closeouts can be a good strategy. However, closeouts are still susceptible to automated script scanning and purchasing. In fact, a growing number of “gems” ending auction without bids are purchased between auction end and at closeout start. Have you ever watched and waited for a name with no bids end it’s auction to never see it surface in closeout auction?

Either way, I agree with you that most domain investors simply don’t have enough time in the world to manually scan the closeout list daily. But for those that do, especially adding the ability to automate scanning based on criteria, it can become a profitable strategy.

Sheogorath · Sep 20, 2019

Alvin Brown said:
Yes, closeouts can be a good strategy. However, closeouts are still susceptible to automated script scanning and purchasing. In fact, a growing number of “gems” ending auction without bids are purchased between auction end and at closeout start. Have you ever watched and waited for a name with no bids end it’s auction to never see it surface in closeout auction?

Either way, I agree with you that most domain investors simply don’t have enough time in the world to manually scan the closeout list daily. But for those that do, especially adding the ability to automate scanning based on criteria, it can become a profitable strategy.

I understand that GoDaddy is limiting the API access so what you describe won't happen.
Though I don't know if they are successful in stopping it entirely.

MTB · Sep 20, 2019

What is an auction bot?

MTB · Sep 20, 2019

Say there's a live auction in xyzdomain/com and with 5 minutes to go the max bis is 500 bucks, then you put a 1000 proxy bid in and it closes at 750 bucks. Is this ethical, since everyone is able to do it?

Alvin Brown · Sep 20, 2019

Sheogorath said:
I understand that GoDaddy is limiting the API access so what you describe won't happen.
Though I don't know if they are successful in stopping it entirely.
Here is a quote of @Joe Styler regarding this matter:

Correct, the end of auction to start of closeout API Access is no longer available. However, this doesn’t prohibit anyone from downloading a list of closeouts via .CSV, and programmatically scanning and parsing this list for manual purchase. Of course, this assumes a person has mad excel or programming skills.

Sheogorath · Sep 20, 2019

Alvin Brown said:
Correct, the end of auction to start of closeout API Access is no longer available. However, this doesn’t prohibit anyone from downloading a list of closeouts via .CSV, and programmatically scanning and parsing this list for manual purchase. Of course, this assumes a person has mad excel or programming skills.

I'm not sure it is possible.
If it is possible, very few people possess the skills to pull off such automatic scripts.
GoDaddy probably has anti spam method that will prevent it in the first place.

As for the .csv it will be quite difficult to do.
So very few programmers can do that.

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