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HUGE DOMAINS SNIPING GODADDY CLOSEOUTS

Located in Domain Marketplace Reviews started by wwwweb, May 6, 2019.

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  1. tonyk2000

    tonyk2000 Top Member VIP ★★★★★★★★★★

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    After being away from GD expired auctions for some time, I decided to try again. A few scenarios observed during the test (short time test, may not be significative) are below.

    I would not list exact domains, as HugeDomains may be following this thread, no need to give them extra tips. Due to the same reason, most of amounts mentioned are not 100% exact amounts occured. Of course initial $12 bid is still $12, no changes here.

    First scenario

    *most typical case* - Candidates for closeouts, which were converted to auctions because of one initial $12 bid, placed in the last minutes.

    Hugedomains joins as the second bidder almost instantly. In all cases, hugedomains used above-mentioned proxy bid (9-12% of the GD value). Making them pay smth. around this amount (or at least 8%-10% of the GD value) is possible then. I personally did this a few times, and they never disappointed me. They always won. In a couple of cases, I was trying to decide whether to let them have the domain for $100 (their current bid) or to force them to pay $200 (as GD value was $2000+). Even before I decided, somebody else (who looked and smelled like a bot) promptly joined and increased the hugedomains winning bid to $200. Fascinating. It was so elegant. I'd prefer to think that another bot was not looking to win the domain, but tried to make hugedomains pay as much as possible instead. Side effect: mentioned non-hugedomains bot became 2nd highest bidder (placed $195 bid and hugedomains outbid him with $200). I used bold font in the previous phrase, will later explain why.

    Extra observation No 1: A half of domains I played with here (and placed the 1st $12 bid) were just... too average. They do have some sense, but normally I would not bother even to handreg such stuff, saying nothing about bidding. Moreover, I selected these "average" domains after my inhouse online+offline listfiltering script excluded them. In other words, to the best of my knowledge, there was nothing in these domains could allow an automated script to mark them as valuable for resale. So, I guess that hugedomains did not mark them for grabbing in closeouts, and, therefore, they joined just because somebody else showed interest. GD value for all domains in question was $1000+, so it is unclear would they autojoin auctions with GD value of 3 figures or less.

    Extra observation No 2: Due to an average quality of domains I played with in this part, I did not try to outbid hugedomains. However, as noticed earlier in this thread, hugedomains would frequently stop and the human will win paying ~10-13% of the GD value. If so, hugedomains will become the 2nd highest bidder. Again, I used bold font in the previous phrase, and will later explain why.

    Second scenario

    *rare case, saw it two times only*

    Also - candidates for closeouts, which were converted to auctions because of one initial bid, placed in the last minutes. However, hugedomains joined as the 3rd or 4th bidder. Due to unknown reasons, he used a proxy of just ~5%-6% instead. Which is why, for the purposes of analyzing test results, I categorized this case as rare.

    One domain: many more bidders joined, and one of them won paying enduser price after some "war". Hugedomains was outbid very fast, and did not place any extra bids.

    Another domain: two bots joined (or humans behaving like bots). I'd call them "BotAlpha" and "BotBeta". It looked like BotAlpha thought that BotBeta is hugedomains, and vice versa. Because each of them tried to let another one pay as much as possible, up to *9-12% of the GD value* which, as we know, is an usual hugedomains proxy. One of them won the auction, possibly inadvertently (as real hugedomains was using ~5%-6% proxy).

    Third scenario

    *Auctions with high activity (a lot of bidders, a few days actions length)*

    Cannot say a lot here. Even if I liked the domain (not all cases), I was not willing to pay even the current highest bid, so I ignored almost all such auctions. I participated in maybe 2 or 3 auctions and placed just 1 bid (where the "current price vs quality" combination was somewhat acceptable). Naturally, I was outbid. Naturally, hugedomains was inside. He was also outbid, but his behavior was very interesting. He joined in last minutes (not a surprise), but, instead of his "normal" proxy (9-12% of the GD value) he applied the following formula: current high bid + $10 ($15, 20) - just to cover 2-4 extra steps. It is also curious that this proxy was in fact ~6% of the GD value, so he knowingly elected to pay less than he is usually ready to. And, he did this with domains of better quality. Why? Hmmm... maybe he joined just to use a chance to become the 2nd highest bidder?

    Fourth,... scenario(s)

    The test was limited, so there must be other HD-related scenarios I missed.

    Closeouts

    As expected. Anything valuable is grabbed by bots, most notably hugedomains. GoDaddy changed the closeout appearance time from random to strict (+ 5 sec. or so). How convinient for bots. GD claimed "equal access for all", but the reality is very different. As noticed a few pages before, hugedomains is now shown with bidder id 913933 and earlier it was 91932. Two bots? It would mean 2x chances to grab a closeout. Maybe hugedomains has 100 GD accounts and 100 bots, exclusively for closeouts?

    The last but not the least.

    What I marked in bold above (a few times). It looks and seems that on many occasions bots (hugedomains and others) are not actively trying to win, but are trying to become 2nd highest bidder instead. What if the price paid (the highest bid) is shared with the second-highest bidder, for selected customers if they are the 2nd? Under NDA. An extra incentive. Nothing illegal here, it also happens offline. Sometimes it is public, somewhat similar occured with ICANN nGTLD strings recently auctioned.

    In other words, what if you outbid hugedomains (proxy $200 on 2K appraised domain) with $205, you pay $205 to GoDaddy, and GoDaddy pays revshare to hugedomains because they were the 2nd? It is just a conspiracy theory. No proof so far. And, in any case, it is not a wrongdoing from strictly legal point of view...
     
    Last edited: Aug 28, 2019
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  2. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    Wow, great research, some of the best insight I have seen on this bidding.

    You backed up your instincts with facts, but I always got the sense they weren’t exactly trying to win also. Impulsive behaviour in bidding always tends to get the best of most.

    Incentives to bid, or compensation for participation in an auction environment I would suspect would be highly illegal.
     
    Last edited: Aug 28, 2019
  3. werty

    werty Established Member ★★★★★★★★★★

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    The reason they have all the registrar connections they currently do is because people "subsidize" them by paying $59 and more with the auctions. That's why they let you backorder. First, they are making a quick return buying at $8 and selling at $59 or even more if auction. Second, they know people can't afford $59 for all their domains everyday. Thus comes the "discount club" which then doesn't work because all the ones that get ordered there are for them; except very few they might let people have if their system determines it has a low sales probability or it isn't that good (not sure exactly). Years ago, when they only did dropcatching for themselves, you could beat them with a godaddy backorder and api software from time to time. The only reason they can have such a big and aggressive system, is because people are paying for it with the auctions and $59 backorders. That's why if everybody suddenly stops using dropcatch (it isn't going to happen just saying in theory), their system quickly crumbles and I am sure they would scale down on registrar connections.
     
    Last edited: Aug 28, 2019
  4. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    They don’t make money on the $59 backorders, they make money when the over eager bidders bid up names like fivenines.com to $36k, which is absolute insanity of a profit.

    My statement was if they are in such need of domains why not grab those $59 domains for themselves, if they are paying hundreds at godaddy for them.
     
  5. tonyk2000

    tonyk2000 Top Member VIP ★★★★★★★★★★

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    The more I think about it, the more I realize that it may be true (not necessary illegal, GD has a great team of lawyers and they undoubtfully did all the "homework"). Indeed, I've seen enough evidence of non-hugedomains bots trying to bid up alleged hugedomains bot, forcing him to pay his "normal" 9%-12% proxy. So, other bots must have been programmed to do this. Now, what is their incentive? Are they good samaritans acting on behalf of all our community? Their behavior is risky, as they cannot "lose" in all cases. Somtimes they will win and will have to pay. It is risky even for us humans playing with hugedomains bot.

    The only incentive I can think of is: 2nd highest bidder revshare.

    If smaller bots have access to such an incentive, then the largest bot in the house - hugedomains - also has access to it. And he of course noticed what other bots are trying to do with him. Which, btw, may explain his occassional unusual behavior (using lower 5%-6% proxies in auctions where he joins as the 3rd (4th etc) bidder. Normal risk management...
     
    Last edited: Aug 28, 2019
  6. werty

    werty Established Member ★★★★★★★★★★

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    If you spend I think it's 5 figures or more every month on GD auctions, you can get API access. That's why there are other bots too just not that much (most people can't spend that; including me). I agree their game has seemed fishy for a few years now and it's nothing new. I think the size they want to grow to requires them buying as much domains as they can and the drop might not even be enough. Or maybe they are using other domainers picks to find better domains and they get better sales with those (because more than one person has seen value in it). Or maybe it's all a lie and they get paid a "market maker" fee or some other type of incentive like mentioned multiple times. All I know is that nobody here likes them, including me.
     
  7. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    The demand for closeout domains selling for $200 plus dollars is not natural, it is out of whack, the people who know domains inside out for years can sense this with their instincts. It is causing an artificial hysteria internally within the wholesale market.

    One incentive is they are allowing them to game any closeout of their choice over human bidders, as their is no way anyone can compete, and they have turned a blind eye to this practice.

    There are many ways to compensate like offer low commissions on sales done thru their channels, maybe cashback on certain spend targets, there was always the pushback to hide bidder id’s, never understood why.
     
    Last edited: Aug 28, 2019
  8. werty

    werty Established Member ★★★★★★★★★★

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    The truth is in any industry it all comes down to money. If they make more money with Huge Domains inflating everything, they are going to favor this no matter what. I used to make a solid income from GD auctions until huge domains stepped on the gas pedal like 3-4 years ago. They started outbidding me in everything overpaying considerably. But I know I am not the only one that has experienced this. Thus I just buy differently these days but still miss those days one could actually bid and find good deals at GD. The good news is the sharks can't survive without the little fish. At some point, and I think it's close, something will pop. The prices domains are selling for to resellers isn't sustainable.
     
    Last edited: Aug 28, 2019
  9. NameBuyer.com

    NameBuyer.com Member PRO VIP ★★★★★★★★★★

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    It was an extreme example from the beginning, I was just trying to point out that whether you are buying domains at $40 each, $100 each, or $2,500 each, there is eventually a point of return.

    For me, I probably built up 80% of mine from the $10-$50 range. But I've talked to another investor that has only bought in the $500-$1,500 range and went for big sales. His revenue in the past year with under 100 domains was 1/2 of what mine was with 7,000 domains and his renewal fees were less than $850, instead of my $60k. So, there are many strategies that seem to work.


    Back to my main point. If you are using your revenue to replace domains like HugeDomains, it is just like inventory on a shelf.

    If I sell 70 domains a year at $3,500 each, and replace them by buying 70 equal or better quality domains at $200 each, I'll never have a problem as long as I'm not spending all the domain income on personal things.

    I agree, trying to build/grow a portfolio like this would be expensive, as it would cost you $200k just to get 1,000 domains at $200 each. But once the machine is running, why not? It would be $14k replacement cost for $245k in sales. More times than not, you can put that $200 domain up for more than $3,500.

    Theoretically, as domain investors, if we all made our own mini HD business models we should also be averaging $3,500+ per sale and beating HD in auctions because we have no overhead. Right?
     
  10. werty

    werty Established Member ★★★★★★★★★★

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    Yes, I understand. That's why I have been emphasizing my strategy is short term vs investing. My experience is in short term sales not investing. In fact, from time to time I sell domains to other known domain investors and I've seen them sell some for five figures 2-3 years later. My average purchase price for .coms is around $20.67 with about a 2% sales rate (although this year might fall between 1-2% but still getting the ROI I need). However, my sales are usually $2k or under. That's the quality I go for but again I want a 100% ROI every year which I seem to get. I just want to grow my money with the best yield possible. I don't have the best domains but as long as I hit my numbers it's all good. I can take 10k and take out 20k within 1 year. That's what I look for in this business. I do compensate with other extensions to make sure I hit 100% every year because getting .coms has gotten increasingly harder (even hand regs).
     
    Last edited: Aug 28, 2019
  11. D Haynes

    D Haynes Top Member VIP

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    If you listen to the latest Domain Sherpa Review episode it sounds as though the whole bidding, buying, listing process has been automated. I think its Josh from DSAD that is being allowed to sell his names on HD and he explains that he let's their algorithm come up with listing prices for the names and it lists them all for him. There won't be anyone working there soon lol.

    Sorry if any of this has already been mentioned.
     
  12. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    Not sure why Huge Domains uses afternic landers for some names checkout visionenviro.com, social experiment ?
     
    Last edited: Aug 28, 2019
  13. werty

    werty Established Member ★★★★★★★★★★

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    Doesn't seem they own this one according to whois.
     
  14. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    So sorry domain is visionenviro.com
     
  15. werty

    werty Established Member ★★★★★★★★★★

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    Yeah I have seen them do that before. I have also seen them forward domain directly to sales listing on godaddy itself. IMO they are just testing sales conversion.

    Also in the past, when they only did dropcatching for themselves, they used godaddy backorders against the same domains they were going after to test and fine tune their system imo. I remember seeing godaddy catching domains and it was for them. But this was many years ago if I remember correctly.
     
    Last edited: Aug 29, 2019
  16. werty

    werty Established Member ★★★★★★★★★★

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    *Also I wanted to share, if anyone wants to get a rough idea of what HugeDomains is selling, you can do so by going to the testimonials section on the bottom of the HugeDomains website* :)
     
  17. Ja Kai

    Ja Kai Established Member

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    So, you all say that Huge Domains can't be beat. Well, I just created something that has been 50% successful at godaddy closeouts (the ones that Huge Domains goes after).

    PM me the domain name you want to grab at closeouts - and the time of the closeout - and I will try and grab for you.

    YOU HAVE NOTHING TO LOSE - AS EVERYONE HERE SAYS THAT HD IS UNBEATABLE.

    If it works, I'll put in my cart and PM back the EXACT time (2 hours after initial grab) and you can register.

    If you want to continue this - I would do for $5 per domain going forward.
     
  18. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    How do you know Huge Domains goes after the domain in closeouts? There is no way of knowing that. I guess you created some kind of script?
     
  19. Ja Kai

    Ja Kai Established Member

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    1) We tend to try and snipe same domains.
    2) These have "Godaddy Values" in the HD "want" range.
    3) you just know when something works.

    I see people here who have said they completely give up. These are the people I want to hear from.
     
  20. Lord Antares

    Lord Antares Top Member VIP

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    I wanted to test this myself but ultimately gave up. Have you made a bot? Are you using a VPS near server location? I'd like to see this in action.
     
  21. Bob Hawkes

    Bob Hawkes formerly MetBob NameTalent Gold Account VIP Trusted Blogger

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    A lot to think about in this discussion, and thank you all for the observations and insights. Am I correct on the following?
    1. HD bids on GD expired auctions but not user auctions
    2. HD do not seem to bid at other venues like NameJet
    3. They seem, with exceptions, to bid up to about 10% of GV valuations on .com
    4. It is the general feeling they overpay (and therefore others do too if they get domains)
    5. At times it seems they are just trying to be second.
    6. Their rapid acquisition on this started about 4 years ago and shows no sign of decreasing.
    Thanks,
    Bob
     
  22. Ja Kai

    Ja Kai Established Member

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    I just can't detail here - As I go after roughly 3-6 closeouts a day - and I am finally having some success again. HD, in my estimation, registers 200-350 closeouts a day - just an educated guess.
     
  23. Ja Kai

    Ja Kai Established Member

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    I truly don't believe that HD and Godaddy are in cohoots. I believe that HD is strictly machine (like Drop Catch) until they hit a certain value. I think they have a disciplined plan that they follow - with no "real-time" people involved in the sniping or initial bids. I DO think that the auction does, indeed, go to a real person, once $250 is eclipsed.
     
  24. tonyk2000

    tonyk2000 Top Member VIP ★★★★★★★★★★

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    Just for the sake of completeness, I'd add the following: Instead of grabbing some _extremely average_ closeouts on GoDaddy, he would wait and grab them after the normal drop (pendingdelete). So he does not want to pay ("$11 or lower" + transfer fee) on GD for these, but pure regfee is OK for his needs. No competition here, nobody wanted them as closeouts, of course no expired auction occured, so they simply drop.
     
    Last edited: Aug 29, 2019
  25. wwwweb

    wwwweb Top Member VIP ★★★★★★★★★★

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    I am wondering if anyone is noticing huge domains a little bit less in the auctions lately?

    Their bidder number has changed to 91933 from 91932 now.

    I have not been letting them have their closeouts, simply bidding $12, and waiting for their auto bot to engage, and taking them up to $1xx range has been effective 85% of the time like clockwork.

    Buying all this inventory I know is a money loser down the road as these names are really meant in the sub $30 range. So I urge many to do the same, as they will snipe the closeouts, so hit them before they go, and make them pay up if they really want them. Remember the bid, and proxy is their choice so if they really want it, then why not make them pay, and water down their margins since they have such a thirst for domains. We can make them pay, the same way they bid everyone else up. No more freebies on closeouts for them. I would assume they got tens of thousands of sniped closeouts with the backorder loophole, now they got exclusive access to snipe, talk about bending over backwards to make them feel at home.

    Game on
     
    Last edited: Sep 8, 2019

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