discuss Ethical or not: Creating an auction for a specific domain that has 2 or more buyers.

[Jay Ha]

Let's say you have a domain which you're doing outbound for and 2 (or more) people showed interest and were willing to buy that domain. After a couple email exchanges negotiating the deal, you decide to create an auction for that specific domain with a minimum bid which is of course their offer on let's say Sedo. You invite all parties interested in this domain name to battle their opponents and who bids higher gets the domain for themselves. Question is this ethical or would this just make them bail?

 

[R.A.L]

Personally, I wouldn't be impressed at all if somebody approached me to purchase a domain and as soon as I showed interest, told me I had to battle it out with a competitor for the 'privilege'. Regardless of the domain, my involvement would end right there.

That's just not how you do business, ethical or not.

 

[Bob Hawkes]

I am not entirely sure it is unethical if they have not accepted a price, but I personally would never do it. I think it is totally fair telling each that you are in negotiation with another party, but to force an auction even though probably the way to get highest prices feels wrong to me.

 

[mdent]

Is it ethical? Sure. Is it a good idea? Probably not.

 

[MasterOfMyDomains]

I had ganja name for 6 years, into it for 50$
got 200 offer, counter 400. BIN is 500
I thought, no way I am taking 200 after 6 years. 200 buys a lot of renewals, maybe some 1$ .com at NS
To stay in business, you need business. 10 years of this, you gotta play smart. Not every hit is going to be a home run.200 is high as they go

Your poll cant be considered accurate, people here like to play games. 4 votes to two at this time
What other object or possesion can you do the same thing you want to do with domain name?
I ask random 'normal people"( non domainers) about domain names. Even my dentist was confused.
Told him I wouldn't be here now if I hadn't sold a .com
Always selling, learning, asking questions.
You have valid question, this just my opinion.
Put it up for auction, then contact people. Even ebay

 

[MasterOfMyDomains]

i would lmfao if someone did that to me. Set a bin
This is the name, this is price.
Are you going to get them to sign up at sedo to battle it out?
Compare domain to car

 

[Jay Ha]

Lower your expectations, I mean price.

I had ganja name for 6 years, into it for 50$
got 200 offer, counter 400. BIN is 500
I thought, no way I am taking 200 after 6 years. 200 buys a lot of renewals, maybe some 1$ .com at NS
To stay in business, you need business. 10 years of this, you gotta play smart. Not every hit is going to be a home run.200 is high as they go

Your poll cant be considered accurate, people here like to play games. 4 votes to two at this time
What other object or possesion can you do the same thing you want to do with domain name?
I ask random 'normal people"( non domainers) about domain names. Even my dentist was confused.
Told him I wouldn't be here now if I hadn't sold a .com
Always selling, learning, asking questions.
You have valid question, this just my opinion.
Put it up for auction, then contact people. Even ebay

First I would like to make it clear that I came up with this question thinking it might be a good topic to discuss, there is no current situation where I'm selling a domain and negotiating with 2 buyers.

2nd I like how you think and I agree, the wheels need to keep on moving even if it is an underpriced sale. Funds can always be used to expand inventory or to renew it.

 

[Jay Ha]

I am not entirely sure it is unethical if they have not accepted a price, but I personally would never do it. I think it is totally fair telling each that you are in negotiation with another party, but to force an auction even though probably the way to get highest prices feels wrong to me.

Thanks Bob. So you don't like this approach like many others, while also other people prefer to use it than to keep on negotiating.. We'll see the final poll result next week.

 

[R.A.L]

It could be frustrating for some, I understand. More NPers voted it is an ethical way though.

To make the poll meaningful, you need to make the title very clear that this concerns outbound marketing - I have no problem with receiving two inbound queries and setting up an auction to determine a high bidder after notifying them both.

I do have a problem with cold-contacting prospects, piquing their interest and only then explaining they can't have the domain unless they're prepared to fight at auction for it.

Honestly, I'd think you were a joke, particularly considering how low your chances were of receiving a reply to begin with - that's just my personal opinion though.

 

[anantj]

Bad idea... I'd say it's on the borderline of being ethical! But if I was the buyer/prospect in this situation, I'd bail except under very rare circumstances - i.e. an exact match of my business or a category killer domain but then, you almost never need to do outbound on such domains!

 

[EmpireNames.com]

Sent email to 4. Three replied back for pricing and I asked that I was open to offers. One came back with an offer and am negotiating now but stalled and almost there. Sent emails back to the other 2 that domain name is almost sold but open to their offers. One email came back saying "thanks for the update". I don't believe pressure tactics like a bidding auction work on buyers even if the other gets the sale.

just email them that domain is in auction if you are interested you can bid on it. i have tried it and succeed many times.. plus if the domain is in auction i would suggest to go crazy on outbound and marketing dont give up until last hour keep marketing on keyword of your domain to all ... trust me it works

 

[Thrismo Labs]

I view outbound as walking on a tight rope. Unless you engage the buyer and get him emotionally / financially vested in buying your domain name, you have very little to no leverage. What you want in outbound is to close the sale as early as possible and at the highest ticket size as possible.(Straight Line Persuasion).

What is the delta of the amount that the auction would bring you vs the risk you run of your prospects turning cold because you've just made them do more work. Depends a lot on the context of your relation with them, but I would any day prefer to make their lives easier, establish a relation to harness later and move on.

IMO, this would be ethical per the definition of the word. But given the context, it would not be the right thing to do.

 

[ecalc]

Slightly related, has anyone ever developed a domain investor Code of Ethics (if so link please someone!)

ICA Code of Conduct -- it includes a commitment to adhere to all applicable laws that seek to curb and control internet fraud and abuse but it doesn't directly address sales negotiations or unsolicited offers to sell.

 

[JayT]

well if you didn't agree then yea, it's okay i'd say. To other your other question, yea they would probably be turned off and not bid. They probably wont bid more than what they were trying to offer in the emails, if at all.

 

[MasterOfMyDomains]

So you say this won't work, but this will also mean maybe no one will buy the domain for the price I'm asking for.

Lower your expectations, I mean price.

 

[Jay Ha]

Is it ethical? Sure. Is it a good idea? Probably not.

Yep, could be a bad idea if the buyers think you're playing them and they bail out the negotiations. But if they see this domain as an asset that would help grow their business, I think they might get on with it.

 

[Bob Hawkes]

Of course one domain marketplace does almost exactly what you are asking about, with first offer triggering an auction, but I think that situation is a bit different. And it could be argued that an auction is the fairest way for each party to know where they stand. I still would not favour doing it though.

I do agree that it is an interesting question, and one that I totally see the argument either way. I predict the vote will come out pretty even but I am not good at predicting elections either Thanks @Jay Ha for posing a hypothetical ethical question - it is the kind of discussion that helps our community grow in a positive way imho.

Slightly related, has anyone ever developed a domain investor Code of Ethics (if so link please someone!), and if not, should there be? Most professions have them.

 

[Jay Ha]

To make the poll meaningful, you need to make the title very clear that this concerns outbound marketing

It is literally the first sentence in my post mate:

Let's say you have a domain which you're doing outbound for

*sigh* but I get your point.

I have no problem with receiving two inbound queries and setting up an auction to determine a high bidder after notifying them both.

True that's why my question is related to outbound sales since when it comes to inbounds, you are in control in a way or another.

 

[Jay Ha]

has anyone ever developed a domain investor Code of Ethics (if so link please someone!), and if not, should there be? Most professions have them.

This should be a very interesting read. It would basically bring the whole domaining industry to a whole new ethical level because from what I've seen during my little time here (gonna be 1 month at the 27th), whether we like it or not, there is a stigma around domainers.

 

[R.A.L]

It is funny because you still haven't voted yet you're here telling me that the title should say this is about outbound sales or else it is considered misleading. I honestly thought you voted 'yes' and couldn't change it later.

OK - look, it's an interesting thread, just one I have a strong opinion on. Happy to accept I may be in the minority here.

Voted now

 

[Domains - Wanted]

If it's an auction you want, I would suggest a slightly different approach, something I have been contemplating myself recently

- first, set up an auction...

- next, start contacting prospective buyers, informing them about an ongoing auction of such and such domain, that might be of interest to them...

Not sure that an auction is the way to go when doing outbound, though

 

[Arfy]

Just so you don't misinterpret the results of your poll... I have voted yes on the fact that yes it is ethical but I would have voted no if the question was. "Should I invite buyers who have made offers after outbound marketing to a public auction to bid for the domain?".

It is ethical as it isn't harming anybody and they have a choice on whether to bid or not but to be honest I think it will annoy them more than anything. Why don't you just say you have had a better offer and to get the domain their offer needs to be higher?

Inviting them to a public auction and going through the sign-up, verification process etc will add more barriers in the way. Also, do you think they will offer more than 20% above their latest bid? If not, then there is no point as you will be paying Sedo a commission on the final bid.

If they are way off the price you are willing to accept and they won't budge after you have said you have a better offer, then tell them you will put the domain to auction if they are not interested. You will most probably lose their interest but if you don't want to accept their offer anyway, then there is no loss.

 

[JayT]

yes, as long as you didn't give them a price to buy it for. If you told them a price, you should sell to the first and explain your mistake to the other.

 

[Jay Ha]

yes, as long as you didn't give them a price to buy it for. If you told them a price, you should sell to the first and explain your mistake to the other.

But in this case all the buyers didn't accept my price and we're still in the middle of negotiations. Maybe I should have made that clearer.

 

[Jay Ha]

i would lmfao if someone did that to me. Set a bin
This is the name, this is price.

So you say this won't work, but this will also mean maybe no one will buy the domain for the price I'm asking for. Auction would at least bring their price a bit closer to my BIN.

Are you going to get them to sign up at sedo to battle it out?
Compare domain to car

You might have a valid point here, but if you want to buy a car which you're sure it will help your business, wouldn't you take a couple of minutes to sign up at a place and try to "battle it out"?