GoDaddy Expiring Auctions... Do you think this is fair?

[zurc.net]

Okay, I was involved in an auction that ended this past Tuesday. Long story short, I lost, but this is how it went down.

• First day of Auction, Bidder 1 is winning with inital bid of $10.
• I outbid him by putting in a proxy bid of $102, I am now the current high bidder at $15.
• Two days before auction ends, my bid is ran up to $72, I am still high bidder.
• Last day of auction my bid is ran up and I lose to Bidder 3 (Only three of us were participating, Bidder 1 with only the initial bid, myself and Bidder 3).
• Bidder 3 decides he doesn't want the domain anymore, so they offer it to me on Saturday and tell me I have 24 hours to pay $72 for the domain + $15 for the .net renewal + ICANN fee's, comes out to $87.17.

But why do I have to pay $72 when if Bidder 3 never came into the picture, I would of won the domain for $15 ? Sounds a bit shady doesn't it? So my bid is ran up and of course the winner doesn't pay and now they want me to pay an inflated price for the domain which only got to that point because this Bidder 3 ran up the price?

Can someone please explain this to me? I called Godaddy on two different occasions to get an explanation, was on the phone each time for more than a half an hour (mostly waiting while they talked between themselves about this matter) and never got a clear answer. Only telling me You can pay the $72 + additional fee's, or you do not have to buy the name. Those are your choices.

Really?

What do you all think? Is there someone who can explain to me thoroughly as to why I should pay the $72? If someone can, I will happily pay for the domain at this price, but as of right now I have a bad taste in my mouth over this situation and I don't want to touch it.

Thanks,
-Mike C.

 

[Sparhawke]

Often people will just run up the price of an auction simply to frighten off newbies, since they do not actually have to pay and there is no enforcement at all, unlike with Dynadot where you must have an account balance people can run up the cost all the time with no risk.

It is simply a way of depleting your resources so you cannot bid on the next domain.

You are not required to buy the domain at their demanded price at all, you can simply turn around and tell them you will pay $15 and not a penny more since you did not win the auction. The onus is on them to enforce the winning bid, not the other ones.

I am betting that they will relent, and even if they don't in a short while you will be able to hand register it

 

[zurc.net]

Often people will just run up the price of an auction simply to frighten off newbies, since they do not actually have to pay and there is no enforcement at all, unlike with Dynadot where you must have an account balance people can run up the cost all the time with no risk.

It is simply a way of depleting your resources so you cannot bid on the next domain.

You are not required to buy the domain at their demanded price at all, you can simply turn around and tell them you will pay $15 and not a penny more since you did not win the auction. The onus is on them to enforce the winning bid, not the other ones.

I am betting that they will relent, and even if they don't in a short while you will be able to hand register it

I have tried to suggest this to them, but the person on phone keeps telling me they cannot change the price. I wish they would at least give me an explanation rather than nothing, doesn't make me feel any better about shipping them over $87.14 for a domain I could of won for $15..

 

[Sparhawke]

Just tell them you are not interested in their price then and wait until it drops

This is the problem with proxy bidding, it is great for domains that you really want at any price but you will find that other people also have them so you cannot step back and simply access the situation.

If the price keeps getting driven up then you pay a hell of a lot more for it but at least with coming second you are not bound by any sort of honour code to buy it, and you are not bound by any honour code to offer them an explanation.

Of course you should never drive up prices just to make someone else pay more but this is what happens all the time, in every auction in the world.

 

[fastadam]

As crazy as it sounds, I know that Sedo has the same policy.

In a sedo auction, if bidder one and bidder two drive the price up to $1000 before bidder two drops out (stops bidding), but bidder three enters the picture and bids it up with bidder one to over $4000 and wins it, but DOES NOT PAY, the sedo reps will offer it to bidder one for the highest bid they submitted before losing to bidder three -- the non-paying or shill bidder.

Seems like a raw deal for everyone but the seller... and sedo or godaddy or whoever it might be who benefits from the higher commission rate.

For sellers with no moral directive, it provides a way to find out what the real top dollar bid is in a given auction without sacrificing anything, provided they can arrange for an account to use as the shill account. If they like the amount the bidding closed at, they lose the bid increment by offering it this way, rather than the entire difference.

I've personally spoken to reps at both companies, only to be told they are doing both sellers and buyers a favor by offering it to the second highest bidder regardless of the circumstances of the auction, because many of the losing bidders are happy to be able to buy the domain, rather than losing it to someone else.

In other words, fat cats are happy with the system as is. For those in the know, there is more to eat.

Personally, I think it's a terrible example to set for the aftermarket in general. But, I guess even with years of in-house hands in the cookie jar over at Snap, everyone seems to be back in business over there.

It's shady inside and out of this business. Sucks, but it's true.

So?

 

[zurc.net]

That doesn't make sense, because $72 wasn't my highest bid and this was a auction by Godaddy for one of their expiring names. Not a auction held by the seller of the domain.

 

[fastadam]

Not the same but similar.

It sounds like a fourth bidder bid you up to $72 and they are wiping out the third bidder's bids.

I just wanted to point out that these companies have a stake in keeping the sales prices high, no matter the technique involved.

Don't look for things to go the way you think they should.

You should see if you can get a report on the bidding and determine how many bidders were involved and what the individual bid prices were. That would clear this up.

 

[Domagon]

The underlying crux of the problem is that typical* on-line GoDaddy auctions are NOT true auctions.

GoDaddy, likewise with Sedo and Afternic, are NOT licensed auction houses, and hence it's a wild west - numerous shills, non-paying bidders, lack of enforcement, etc. They are listing venues and don't enforce bids / sales.

* occasionally, many of the big name services will contract with a licensed auctioneer to conduct a live auction, but those are separate events with participants most often signing paperwork / submitting additional information, including the ability to pay, before hand.

If you don't like the price, don't buy it. GoDaddy can't force you to buy it ... even if you had been the winning bidder ... that's why GoDaddy so quickly offered it to you instead of putting pressure on the winning bidder who had reneged, which a real auction house would have done.

As for why GoDaddy would charge you $72 instead of $15 ... because they can! GoDaddy plays fast and loose with the rules for their benefit - an example is their continued lack of regard of ICANN registrar transfer policy.

To digress a bit, in fairness, many of the other expiring "auction" places aren't great shakes either - in general, drop-catching is a sketchy business with little ethics.

Rambling on ... at this point, the question to ask yourself ... Is buying the domain at $72 still worthwhile? If yes, then buy it anyways.

If no, refuse and tell GoDaddy what you are willing to pay (keeping in mind that negotiating may help; offer more than $15 like $30) and see if they accept that.

Ron

 

[zurc.net]

If they can't change the price to $15, why would they be able to for $30? lol. I appreciate all the input, keep it coming To be clear there were ONLY 3 bidders, the inital bidder 1 for $10, myself and Bidder 3.

 

[Sparhawke]

If they can't change the price to $15, why would they be able to for $30? lol. I appreciate all the input, keep it coming To be clear there were ONLY 3 bidders, the inital bidder 1 for $10, myself and Bidder 3.

Because you are getting fed bullshit, I have not met a salesman in the world yet who does not have the ability to negotiate if they want to or can get their manager who can. They can do this because they have the power to cut their commission if they wish to secure the sale, which is sometimes better than having the victim walk off to see your competitors now you have armed them with all the knowledge they need. Some customers know this and use it to their advantage, and many don't because they have been programmed to accept the advertised price.

By saying it is simply impossible they are putting a "limited time offer" dilemma onto you and they know you will likely crack.

$72 is way better than $15 even at the risk of losing it. And even if you do not buy they will likely find some mug who will, or they will simply register it for themselves for a few years at the 18c ICANN fee because they know if 3 people bid now for it surely others will too in the future.

It is your money at the end of the day but you are far better off walking away and not playing their games.

 

[zurc.net]

Lol. Sad part is, I really like and want the name, but I just feel a bit violated and in the dark about what has actually happened.

 

[Domagon]

If they can't change the price to $15, why would they be able to for $30? lol. I appreciate all the input, keep it coming To be clear there were ONLY 3 bidders, the inital bidder 1 for $10, myself and Bidder 3.

It's amazing what a little extra money can do ... what was seemingly impossible suddenly becomes possible!

It also helps to know what GoDaddy's costs are ... the domain isn't free - if they sell it to you, the incur a registry cost of around $7 plus overhead (ie. the auction system / customer support, etc) ...

What does GoDaddy have to gain / lose? If don't sell it for $15, they at most, ignoring overhead costs, lose $8 potential gross profit.

And hence, the risk of GoDaddy seeking something more is worthwhile. However, if one offers say $30 for the domain, now the potential maximum gain is $23, which is significantly more than the other legit bid at $10 and the reneging bidder. Hope this makes sense.

If $15 is all it's worth to you, then it's a no brainer - just reply back and outright refuse - they may reply back and accept $15. But if it's worth something more to you and want some assurance of buying it now, then, presumably, it's worthwhile to negotiate, even if that means paying somewhat more than $15, to get the deal done.

In short, negotiation is part of the drop-catching game. There are no set rules - it's all about how one plays it, persistence, and having funds ready to deal.

Ron

 

[DN_Hunter]

After an Expiring GoDaddy auction I participate in ends, I copy/paste the entire BID History into a text file (I do this regardless of whether I am the highest bidder for the domain).

This being after the fact, they will have updated the bid thread to look as though the non-paying bidder never existed -- so what does the bid thread look like now? Is there a bid at $67?

If there are no other bidders, you should get the domain for $15 (unless BIDDER 1 bid $67).

If you don't take it, I think they will offer it to Bidder 1 for $10

In my experience if the winning bidder does not take it and I am the 2nd highest bidder, they have given the domain to me where I would have won it without the non-paying bidder.

for instance, I was recently in a bid that went something like this:

Bidder 1 - $10
Bidder 2 - 15
ME - 20
then I battle it out with Bidder 2 up until about $200 (just me and Bidder 2, and Bidder 2 wins it at 200)

I get an email a few days later that I win the domain because Bidder 2 did not pay -- they gave it to me for $15 (as if Bidder 2 never existed)

 

[zurc.net]

That's all I want, lol. I spoke with godaddy again just now (4th time) and they are now claiming there was a 4th bidder, but for security reasons they couldn't release this persons info (lol his bidder 4 name, yeah I am serious...) I am still waiting on a response to my email I sent last night to [email protected] and now they have recommended that I contact [email protected]...

 

[Erdy]

fastadam,
Your example of sedo is not similar at all. It is completely different. I would actually agree with sedo but not with godaddy.

zurc.net,
I agree completely. It is totally unfair. When bidder3 started bidding your proxy bid kicked in and you automatically bid against bidder3. So you (by proxy) and bidder3 were bidding against each other, driving the price from $15 to $102. When bidder3 says "I don't want it anymore" they shouldn't just cancel his final bid. They should cancel all his bids.

 

[scithe]

Yeah sounds like there was a 4th bidder. Easy to miss. Looking after the fact maybe if bidder 3 was removed, bidder 4 becomes bidder 3, and that's why bidder 3 now only shows 67 and why you aren't being asked to pay 102.

---------- Post added at 08:18 PM ---------- Previous post was at 08:16 PM ----------

On another note. Are you in the domain biz to make money or to stand your ground and earn pats on the back? If $102 was your high bid and you can have for $72, grats.

I know it's easier for me to type with no vested interest. But the best moneymakers can disconnect their emotions which I am trying to master.

 

[zurc.net]

Just because my high bid was $102, doesn't mean I wanted to pay more than I had to for the domain.

 

[Name Trader]

Just tell them you don't want the domain. If the winner doesn't pay, then GoDaddy will offer it to you at $15. If he's already paid for the domain, then he's the one out of pocket. Move on. If you must have the domain, pay him.

 

[DU]

They should cancel all his bids.

They should cancel ALL bids; however, it's an expiration auction so there's not enough time to do things properly.

Consider Bidders 5-1000 who wanted it at $80-$100 but didn't bid because it was $102.

THEY GOT SCREWED!!! Unless you bid $102.

 

[cdboard]

if you don't pay their price, consider using godaddy's backorder service on that domain.