Auction Format For Domains

[VURG]

Personally, I hate selling domains through the common offer/counter-offer format. I live in Australia and so I'm often asleep or not at a computer when I would receive an offer. Most of my domains have been sold through a BUY_NOW! format or communicating directly with the customer with fixed prices. I prefer formats where I wait until I receive an email that a domain has sold than the time consuming process of negotiating.

I have tried to use the auction format with some success but I find that I don't like using auctions in the format they are in. I find that it usually takes a few months on average to sell a domain with a starting price that I'm happy with (years if I want a better price). For weekly auctions, most domains would require over 10 listings to sell. Relisting domains for sale is a horrible time consuming job. To combat this, I could give a low starting bid so that it sells quicker but I've lost too many good domains this way.

So you could say that automated relisting may solve my problem but I have another one that bothers me. From watching the domain auctions at TDNAM and eBay, I know that exposure sells a domain at a higher price. The domains that have their first bid earlier on have a significantly higher selling price than those that don't. Most of my domains that I have sold through auctions get their first bid in the last 24 hours of the auction. If I get my first bid that late then I don't want to sell it through auction as I could probably sell it higher through a fixed price.

As a buyer

When I look through auctions, there is so many sellers who are selling extremely bad names and/or auctions with huge initial/reserve price for their domain. I have found that I much prefer looking through domains that already have bids than those which don't. I know that these domains are going to sell and so this makes them interesting. The other reason is that I do this is that I know that these domains are considered valuable by at least one potential customer and so I am at a lot lower risk of being ripped off than bidding on a name that nobody has bidded on.

I'm not alone in this attitude and for that reason, the auctions with at least one bid get a significantly higher level of exposure than those that don't and often seller higher.

My Suggested Auction Format

What I would consider to be a good auction format for domains is one where the auction finishes a fixed time period after the first bid. (Most likely 5,6 or 7 days) This means that as a seller you only have to list the domain for auction once and you are guaranteed exposure for your domain after the first bid. This also means that the initial bidder has control on when the auction finishes. (I like this as most auctions finish at times that are inconvenient to me.)

I know that as a seller, I am happy to list a domain for auction at a lower starting bid than a fixed price but only if I am certain that I can get good exposure for my domain during that auction. Because the domain only needs to be listed for sale once, it is a lot easier to list hundreds of domains for auction. As a buyer, I have that chance of buying at a lower price if I make that first bid (that starts the auction) and so I may prefer to make that first bid than paying 2 - 3 times the price for the domain.

I believe that domains are unique in their characteristics. One domain will vary from $2-$40000 in selling price and the market for that domain may vary from 2 people interested to thousands. In real-estate, you see multiple variations in types of auctions to deal with multiple types of markets. I consider domain auctions to be an area where a bit of experimenting with different types of auctions can potentially open new markets for domains. Hence, I would be willing to experiment with this idea with hundreds of my domains to see if it attracts customers to sell them.

I would appreciate any feedback from anyone who agrees or disagrees with me. Also, if you have a domain marketplace (+ escrow service) where you are willing to experiment with this concept than feel welcome to PM me.

 

[Ronald Regging]

When I look through auctions, there is so many sellers who are selling extremely bad names and/or auctions with huge initial/reserve price for their domain. I have found that I much prefer looking through domains that already have bids than those which don't. I know that these domains are going to sell and so this makes them interesting. The other reason is that I do this is that I know that these domains are considered valuable by at least one potential customer and so I am at a lot lower risk of being ripped off than bidding on a name that nobody has bidded on.

You are not alone in this thinking, there are many out there who feel the same way and I am going to stick my neck out on the line here and say that you are all wrong. I agree completely that there are tons of bad names out there, but by only looking at domains with other interested buyers you are creating two problems. First of all, you could be missing out on terrific names that for some inexplicable reason have no interest. Whether people just haven't seen it, or they just haven't seen the potential of it to an end-user or they just don't put forth the effort to sell to end-users, there are good domains to be found with no interest. The second problem you are creating is the false assumption that if someone else is bidding on it, you have them as a potential customer. When you win that auction, it's because you put forth the highest bid, higher than the other bidders were willing to go... If you paid more than they were willing to pay for it to start with, what makes you think they are going to want to buy it from you at a price that earns you a profit?

I agree with you that exposure and interest are key selling points, but as a buyer a lack of exposure and interest are not bad things, in fact, they are great. As a seller, there are numerous tools available to gain more exposure and/or interest for your auction listings... These include paying for premium listings, or paying for upgrades on Ebay that make your domain standout from the others. Most end-users don't stroll through Ebay searching for domain names, so list your auction in a second category that is related to the target audience of your domain. You can also promote the auction of your domain to potential end-users through email or on message forums that allow it.

There are many options out there that enable you to maximize your selling potential, you just need to use them and not be afraid of doing some work. Do I think your auction format is a bad idea? No, but I just don't think it is necessary.

 

[AussieDomainer]

You are not alone in this thinking, there are many out there who feel the same way and I am going to stick my neck out on the line here and say that you are all wrong. I agree completely that there are tons of bad names out there, but by only looking at domains with other interested buyers you are creating two problems. First of all, you could be missing out on terrific names that for some inexplicable reason have no interest. Whether people just haven't seen it, or they just haven't seen the potential of it to an end-user or they just don't put forth the effort to sell to end-users, there are good domains to be found with no interest. The second problem you are creating is the false assumption that if someone else is bidding on it, you have them as a potential customer. When you win that auction, it's because you put forth the highest bid, higher than the other bidders were willing to go... If you paid more than they were willing to pay for it to start with, what makes you think they are going to want to buy it from you at a price that earns you a profit?

I agree with you that exposure and interest are key selling points, but as a buyer a lack of exposure and interest are not bad things, in fact, they are great. As a seller, there are numerous tools available to gain more exposure and/or interest for your auction listings... These include paying for premium listings, or paying for upgrades on Ebay that make your domain standout from the others. Most end-users don't stroll through Ebay searching for domain names, so list your auction in a second category that is related to the target audience of your domain. You can also promote the auction of your domain to potential end-users through email or on message forums that allow it.

There are many options out there that enable you to maximize your selling potential, you just need to use them and not be afraid of doing some work. Do I think your auction format is a bad idea? No, but I just don't think it is necessary.

I agree with slipxaway's post above as I do quite well by picking up very low priced domains on ebay (all under $10) mainly due to the time difference (I am an Aussie and therefore am actively online while most Americans are sleeping). Due to the less exposure on these domains I am able to pickup many for a couple of dollars each and on sell at a nice profit.

However I would like to see an auction site with VURG's style implemented from a selling point of view. It is also good to see another Aussie on here

All the best
David

 

[Ronald Regging]

However I would like to see an auction site with VURG's style implemented from a selling point of view.

Like I said, I don't think it's a bad idea, and it may have certain benefits to sellers, but when it comes to auction sites, buyers are the breadwinners... Have you ever seen an Ebay commercial aimed at sellers? Would anyone who uses Sedo say that sellers come first? I just think its a feature that most auction sites would deem unnecessary and potentially confusing to buyers.

As the saying goes, in a perfect world...

 

[VURG]

I guess I'm thinking more in context of TDNAM and other groups who provide a free listing service in exchange for a commission in sales rather than eBay. I wouldn't necessarily list hundreds of domains for auction on eBay as I lose a lot of money if the domains don't sell. I have a few domains on eBay but personally I list on eBay to attract them to my site, not to get my best sales as I find it harder to be profitable than other methods.

I guess my main two points that I want to get across is:

- If it takes months or years to sell a domain through an auction format, I only want to list it once.
- If I am guaranteed that I get a few days exposure once the auction becomes active (at least one bid has been made) then I am willing to give a lower starting bid.

Because I as a seller am willing to risk more (in terms of cheaper starting prices) on an auction format, I consider that this method can grow the range of available domains.

For example:

I have the domain www.PDPP.COM.

If I list it for auction, It has 3 great characteristics that give it value as a 4 letter domain:
All the letters rhyme
D is repeated
P and D are considered premium letters

With these characteristics, I know that I can sell it today for over $50 if I need to.

If I listed a sale price I may list it for hundreds of dollars.
If I list it for auction I may list with a starting bid for $120
However, if I was guaranteed one weeks exposure after the first bid was made on a list of active auctions similar to TDNAM I would be happy to list for $75. That exposure to me is valuable and worth selling my name at a discounted rate.

If you as a were interested in getting the domain and were willing to pay $100 for that domain than with current selling options I wouldn't give you that possibility. If there are many other sellers like me with better portfolios than me who would use this format then your variety of options is compromised because they don't.

 

[IAmAllanShore]

VURG,
I love the thought process, and I certainly like the idea.
My only problem with the process as you described is that, as a seller, I'd like any .us auction to end around 5:00 Pacific Time, US... and any .com to end around 3:00 AM E.S.T.
That might be more complicated than is possible (And confusing) , but I'd hate to lose out on the end-run of bidding that could couple with a lower priced name.

That being said, it would be an improvement over the current relisting method with TDNAM, and preferable to the current long drought on afternic (And don't forget to update your afternic prices! Don't want to be forced into selling a 3 letter .us for cheap because you didn't update your offer prices elsewhere from sedo!)

Perhaps suggest it as a format to Bob via email, or start a mini-blog about it and see if you can develop more of a following

-Allan :gl:

 

[VURG]

Thanks everyone for your feedback!

I appreciate it.

 

[VURG]

I have spent the past few weeks wondering if Sedo visited this thread since I started in July.

?????