discuss Profit Sharing Auction - What do you think about this concept?

[infosec3]

What are your thoughts about the following auction set up?

A seller places a domain name for auction on a given platform and he offers all bidders to get a % of the profit he gets from the sale.

Let's say he offers to distribute 30% of the profit among bidders.

His domain auction ends at $3000.

There were 10 bidders participating in the auction.

30% of $3000 = $900

$900 / 10 = $90 - This is the amount each bidder will receive once the domain sale has been completed. So, 9 bidders end up getting paid just for participating in the auction.

The winning bidder gets the name for $2910 ($3000 - $90).

The seller's total revenue after paying the bidders is $2100.

The main purpose of this would be to attract attention to your auction.

The term ''profit sharing auction'' already exists, as you can find online, but I am not sure it has ever been applied this way.

What do you think?

 

[Joshh71390]

It sounds good, but i think this is kind of like schill bidding.

If you think about it, people get way to obsessed with free money nomatter the stakes or work needed.

Think of it this way. I bid on every single auction on the entire site.. Then I I just ponzi my earnings to pay for the few that I do win, or I just dont join.

Also think of it from the bidders point of view. someone was going to bid on a name and actually pay.

Someone has 5 accounts on the auction you wanted bidding on them all -> it kind of alienates the actual customers and just makes it a one stop shop for fake bids =)

Not trying to down the idea i think it's super cool concept, but sadly this will only attract people you dont want to attract.

 

[JayT]

I think the winning bidder wouldn't pay...they were all bidding not expecting to be holding the bag :p

 

[infosec3]

It sounds good, but i think this is kind of like schill bidding.

If you think about it, people get way to obsessed with free money nomatter the stakes or work needed.

Think of it this way. I bid on every single auction on the entire site.. Then I I just ponzi my earnings to pay for the few that I do win, or I just dont join.

Also think of it from the bidders point of view. someone was going to bid on a name and actually pay.

Someone has 5 accounts on the auction you wanted bidding on them all -> it kind of alienates the actual customers and just makes it a one stop shop for fake bids =)

Not trying to down the idea i think it's super cool concept, but sadly this will only attract people you dont want to attract.

I see what you mean. I don't feel you are downplaying it. I think your points are valid. Just want discussion about it...

 

[Joshh71390]

Yea. it's like this. A market exists because there is demand the product or service being sold.

Not because someone is going to pay you to buy it.

I know a location that pays people to Vote on names that get auctioned off. I think it's something like you pay for votes, and then you use your votes to say if a name is good enough. and then i think its like 10 votes makes the auction live and the voters split a set percentage of final sale.

Im not too sure but i remember seeing it somewhere.

But this is not the basis of the site, it is just another feature.

 

[Domains - Wanted]

I think the winning bidder wouldn't pay...they were all bidding not expecting to be holding the bag

^^^ This! ^^^
Interesting concept, but won't work, IMO.

 

[Joshh71390]

maybe a way to make this work is like - For every x you spend, you get entered into a drawing for y % of a profit pool

 

[equity78]

I always like new auction concepts, this won't work like this for the many good reasons @Joshh71390 mentioned.

This has some similarity to the new gtld loser gets cash auctions.

That's how you would have to do it,

I have JNZ.com for example, I am taking bids on the name,

10 people bid in a closed bid situation, meaning no one knows what anyone else is going to bid, so the highest bid is $21,000, verified by a third party that is unrelated to the seller and the bidders.

So then the other 9 would split $6300 (30%) or $700 each.

Now what if 100 people bid ? So you would have to refine it, like you would only accept bids from someone you did research on and checked out.

Namepros would not be the place to do this.

 

[equity78]

maybe a way to make this work is like - For every x you spend, you get entered into a drawing for y % of a profit pool

That would be akin to a raffle and illegal in the U.S.

 

[Casey L]

I'm surprised flippa hasn't implemented this yet

 

[urlurl]

So you are asking people to bid up the price of a domain they don't necessarily want?

seems a bit shady IMO

You can call it "Hot Potato Auction" - where no one wants to be left holding the Potato

 

[Joshh71390]

reading your situation is a perfect example of ... I wish i could of gotten in there and just really undercut the auction =)

But yea it would have to be something where it is not very profitable to lost on purpose... where it is more of a better luck next time.

Maybe something like (if you make a bid within 50 percent of the ending price you will be credited for future auctions.

It's actually a beautiful concept if you could figure a way to make it free market based. - > sales are taxed, and instead of buying the site owner a 3rd house, it is helping to strengthen demand side (buying the site owner 4 hourses =))

 

[Joshh71390]

its hard figure out the perfect situation because.... what about this, i love this domain and want to pay up to 1000 for it. but its at 500, someone bids 800 - and i figure hey, why not just get em next time atleast im going to get a good chunk left. - people with big pockets could short the market because they are winning on both end of the spectrum. taking money away from the seller.

 

[frank-germany]

great idea
but human nature will kill it