NameSilo

How should auction houses handle non payment by the winning bidder?

Labeled as domains in Domain Industry News, started by equity78, Nov 8, 2020

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  1. equity78

    equity78 Top Member TheDomains Staff TLDInvestors.com PRO VIP ★★★★★★★★★★

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    How should auction houses handle non payment by the winning bidder? Back on October 29, I wrote about Kau.com closing at $100,350 at DropCatch. That bidder did not pay, it's being reauctioned. Is that the right way to handle things? I have written many times on how DropCatch and NameJet have benefited by GoDaddy failing to secure payment. Koupons.com closed at $6,100 on 8/17/20 at … [Read more...]
     
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  2. WhoaDomain.com

    WhoaDomain.com WhoaDomain.com Gold Account

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    I say they go the full Vlad the Impaler route or perhaps the paint someone with honey and stick them near a red army ant hill next to a murder hornet hive.
     
  3. CraigD

    CraigD Top Contributor VIP

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    They should verify bidders credit card (and credit limit) before auction, and credit the card at end of auction.

    Simple!

    If the bidder has an issue, it is then between winner/bidder and credit card provider.

    This will put the brakes on shill bidding and other shenanigans in the industry.
     
    Last edited: Nov 8, 2020
  4. pablohc86

    pablohc86 Top Contributor VIP ★★★★★★★★★★

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    verify bidder accounts ( who is him and getting a valid document)
    who want to bid over a certain limit must provide a valid payment method and show proof that can afford to pay that amount.

    is this too much? ok, you can avoid to bid :)

    probably all this is not yet enough but it will reduce a lot the shill thing.
    I'm sure this is extra work for godaddy and until they are profitable they will not care about their customer so much
     
    Last edited: Nov 8, 2020
  5. equity78

    equity78 Top Member TheDomains Staff TLDInvestors.com PRO VIP ★★★★★★★★★★

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    Expired auctions GoDaddy, DropCatch, NameJet, Park.io, Catched.com get the money. So probably less shill bidding going on there. It can be the old have three accounts, or work with two others bid one up real high, not pay and then it goes to one of the lower accounts but that does not work at DropCatch they reauction. GoDaddy does not always go to lower bidders so that plan does not always work.

    People are not going to deposit funds and tie up money on an auction site.
     
  6. AEProgram

    AEProgram Top Contributor VIP Blue Account

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    Do the same thing Christie's and Sotheby's auction house does, they verify the buyers financial resources. Anyone looking to bid over 4k should verify who they are and show financial proof.
     
  7. CraigD

    CraigD Top Contributor VIP

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    There is really no excuse for outrageous bidding being allowed to ruin the reputation of the domain auction industry.

    It is these auction platforms themselves who are responsible for maintaining the integrity of their own industry.

    The majority of them do not appear capable of doing this.
     
    Last edited: Nov 8, 2020
  8. Mr. Deleted

    Mr. Deleted Slabaugh.com 800-266-2728 VIP ★★★★★★★★★★

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    Or you could do the nameSilos model.
     
  9. Mr. Deleted

    Mr. Deleted Slabaugh.com 800-266-2728 VIP ★★★★★★★★★★

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    name silo does.
     
  10. AEProgram

    AEProgram Top Contributor VIP Blue Account

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    The dollar amounts at namesilo are usually in the low XXXX
     
  11. pb

    pb Established Member ★★★★★★★★★★

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    Require the bidders to be physically present at the auction house and not let them out until they pay up. :whistle:
     
  12. Mr. Deleted

    Mr. Deleted Slabaugh.com 800-266-2728 VIP ★★★★★★★★★★

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    Correct. It drives down prices, but the quality is better at nj than ns.
     
  13. equity78

    equity78 Top Member TheDomains Staff TLDInvestors.com PRO VIP ★★★★★★★★★★

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    True but there is nowhere near that much action at NameSilo and a lot of their names get renewed, at least the high quality ones.
     
  14. equity78

    equity78 Top Member TheDomains Staff TLDInvestors.com PRO VIP ★★★★★★★★★★

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    Did you mean XXX?
     
  15. AEProgram

    AEProgram Top Contributor VIP Blue Account

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    yeah and I agree, the real good ones usually get renewed
     
  16. Mr. Deleted

    Mr. Deleted Slabaugh.com 800-266-2728 VIP ★★★★★★★★★★

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    That is always annoying when you pay a good amount for a name you want to buy and then don't get it, and you get the money released, but you had set it aside for that auction. And that's another reason for the lower prices. NameSilo really is hurting themselves in how they operate.

    But say people pre-fund an account of 100K for a name that they are trying to win in that amount would also probably drive down the number of qualified bidders and people willing to put up such a deposit. But it would make sure that the top bidder would pay.
     
  17. hollywood

    hollywood Established Member ★★★★★★★★★★

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    I see room in the market for a business that requires 20% down.

    In other words accept bids up to 5x the amount of good faith hard money that has been put up. Or pick your own number.

    And add a no-pay penalty to encourage thoughtful bidding.

    Is NameSilo already doing this?
     
  18. Mr. Deleted

    Mr. Deleted Slabaugh.com 800-266-2728 VIP ★★★★★★★★★★

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    It requires 100% to cover bids, but you can actually spend that on registrations and renewals in between bidding and winning auctions, so when the auction closes you may not have enough, and have to pay the rest.
     
  19. Mr. Deleted

    Mr. Deleted Slabaugh.com 800-266-2728 VIP ★★★★★★★★★★

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    That would defeat the purpose of the internet...
     
  20. AEProgram

    AEProgram Top Contributor VIP Blue Account

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    I like your idea, even a small deposit 50 dollars to bid on names up to 1000 dollars, 250 for names up to 10000, etc I like that
     
  21. stub

    stub DNStore.com PRO VIP ★★★★★★★★★★

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    There is a very simple answer to this question. The domain should go to the next highest bidder.
     
  22. equity78

    equity78 Top Member TheDomains Staff TLDInvestors.com PRO VIP ★★★★★★★★★★

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    I agree Stub, the one thing that has to be looked at is the gaming of that system, you bid $100 on one account, account #2 and account #3 just go into a bidding war, take the name to some crazy amount no other investor would participate.

    So the auction closes at $80,000 winning bidder default, bidder 2 No thank you, I am not obligated I lost and spent the money somewhere else. Bidder 3 I will take it for $100 great.
     
  23. stub

    stub DNStore.com PRO VIP ★★★★★★★★★★

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    How much does this actually occur? The only loser here is the auction house holding the auction. I'm sorry that they don't have my sympathy :) They let 2 shill bidders bid up the price, and then point to how much they lost when they both drop out. They should control better the bidders in their auctions? IMHO.
     
  24. equity78

    equity78 Top Member TheDomains Staff TLDInvestors.com PRO VIP ★★★★★★★★★★

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    Well no one said have sympathy for the auction house, but I don't want to bid in that environment.

    Now @Michael at thedomains posted some thoughts on that

    Then you get someone with two accounts bidding it up from $10 to $10,000 super fast, and when the next highest bidder gets it, it’s the scammer for $10. Next highest bidder doesn’t work.

    A re-auction is the only fair way to do it and is the least likely to be abused. Sure, you could try to keep it re-auctioned in perpetuity but what’s the upside? This is the most transparent way to do it as well because then the public can plainly see that it didn’t go through, and what it ends up selling for.

    Next highest bidder is as opaque as it comes, nobody but the next highest bidder knows there were fraudulent bids or what it ended up selling for.
     
  25. stub

    stub DNStore.com PRO VIP ★★★★★★★★★★

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    There is a lot an auction house can do to control shill bidding. Has a user bid that high before? Is it a new account? They could put limits on how high a user can bid on an auction, or ask them for some security/pre-payment, or have they paid for similar auctions? Have they ever reneged? Outright 100% ban on every shill bid that goes unpaid, or every shill bid (like the second bidder in your example). I'm not saying they will be able to eliminate shill bidding. But items like you example are easy to spot.
     

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