There are lots of auction opportunities. How can auction houses differentiate themselves?
Yesterday’s Domain Name Wire “blogger” auction ended with 32% of domains selling. It was lower than what I had hoped, although there were some good bidding wars at the end. I was also happy that all but one domain that received bids ended up meeting their reserves.
There are several things I did right selecting domains for and running the auction, and several things I could have done better. It’s always easy to blame outside forces. As many people pointed out to me, there are a number of auctions going on and two conferences this week.
But blaming the volume of domain auctions isn’t something auction organizers will be able to do for long. Let’s face the facts — there are an increasing number of domain auctions at any given time, and you have to do something to rise to the top.
Looking back one month and forward one month, we’ve had:
-Domain Madness
-Multiple Sedo Great Domains auctions
-Sedo .tv auction
-Multiple Rick Latona auctions (first for a day, now a week)
-TRAFFIC auctions, both live and extended, no/low reserve and premium
-Moniker DomainFest auction
-SnapNames auctions
-Others that escape my mind
That’s not to mention the daily auctions at SnapNames, NameJet, Sedo, and even BargainDomains.
So how can companies make their auctions stand out? Beyond “offer good domains at good prices”, Here are some ideas:
-Everything’s a dollar – Rick Latona has held a number of auctions with $1 reserves. Talk about creating buzz. At a minimum, the auction starts with some real bargains. Whether or not it ends that way as domains get bid up is a different matter. But starting at a baseline of “everything is a bargain” is a good way to start.
-Create a hook – make something interesting, such as a timely theme or gimmick. This will get attention, not the least of which by bloggers. With so many auctions going on, it’s impossible for me to write about each one. Heck, there could probably be a domain blog covering nothing but domain auctions.
-Be consistent – if you change the rules of your auctions every day, people will get annoyed. People like to know what they’re getting in to.
-Make it transparent – every time a name sells for more than some people think it’s worth, you’ll hear complaints about auction improprieties. People wish to remain anonymous, but you can do other things to make bidders comfortable (e.g. bidder certification).
Any other ideas?
Jamie says
I think your auction got a lot of Press, which many “other” auctions lack. People have to be aware of not only the auction but specific domains to bid on a domain they may not even know is/was at auction.
Since domain auctions happen everyday with many thousands of domains, it is hard to make one auction all that more exciting than the other. Inventory (domains) and prices are what make an auction interesting, period.
Amount ~ I would rather see 10 domains in an auction that are “good” and priced low, compared to 50 domains with 20% being “good”.
The reason expired domain auctions do so well are low starting prices with no reserve but on the other hand sellers have more of a risk than the auction services do selling domain names they didn’t pay anything for.
$1 no reserve is the best way to run a domain auction. No BS, just the potential for great deals brings in buyers! Let the inventory sell itself with specific promotion of the domains and not so much of the auction.
Jacob says
I thought your auction turned out pretty well. I’d love to see that auction monthly.
Rob Sequin says
If an auction has qualified and motivated buyers and quality inventory at reasonable prices, it will do well.
Simple as that.
Domain auctions usually have qualified and motivated buyers but quality inventory or reasonable prices is usually a small part of the inventory.
Adam says
Inventory is the key. Good names, good prices equals free promotion and buzz for an auction.
Picking and pricing has always been important but will become more and more important, as buyers seek deals but wish to be more efficient with their time in the crowded marketplace.
Throwing everything at the wall with large inventories of names wastes a buyers time and floods the marketplace.
As buyers get inundated with more and more auctions, the venues need to realize the economics of the marketplace. Econ 101 says that a flood of auctions and bringing in
“giveaway pricing” on low-grade inventory may not exactly be good for overall aftermarket pricing.
I think we’ll see a lot of shifting toward the DIY auctions like you did with Snap and Rick is allowing people to do on his platform and the best “picks” or “pickers” will rise to the top.
Andrew Allemann says
@ Adam – good point on DIY auctions. There are a couple things I like about it:
1. The seller has a good reason to promote the auction, and will do things outside the box of what auction houses usually do to get attention.
2. Lots of people no longer submit to auctions because they’re tired of none of their domains being accepted. When you run your own auction you choose your own inventory.
Adam says
Here are other reasons people don’t submit names that I’ve heard
– High commission fees
– Long exclusivity periods
– Getting shoved to an “extended list”
– Pressure by auction company to lower reserves.
– Feeling that their names aren’t being promoted actively to end-users.
Unfortunately in the current environment, going DIY can help in only a few of these areas. . . there’s always ebay 😉
Snoopy says
Too many auctions in my view. I think the industry needs two or three very strong auctions where most people attend rather than a whole lot of auctions getting minimal publicity. 30% clearance rate is just too low, means the names haven’t been priced well.
monte says
Adam,
I think Commission fees are relative to performance, experience, and likelihood to succeed. Listing names and working names for private sales and auctions are two very different things. Auctions and private sales efforts deserve higher commissions and that makes the company aligned with their seller because the Seller and broker/auction house earns more when the domains sells for more. 99% of our sales at auction sell for over reserve with our commissions added to the reserve, not taken from the reserve so that means our price strategy is correct most of the time…so going back and asking a seller to lower reserve when we know the market better than anyone, results in more sales rather than allowing over-priced names to take up slots knowing that they will not sell. The goal of the Seller and the Auction house/broker is to get a successful sale completed.
Exclusive periods are also necessary to properly promote names before and after auctions and protect all sides while putting out that effort. We sell many names after our auction due to our good promotion before, during and after auctions – we just sold Guns.com that way, sold Porn.com for $9.5M after two auction tries as well….and many others.
Extended auctions actually reach more bidders than Live auctions do and they have performed well. Sell through rates are of course decreased because there are more names in that environment, but there are 5X the bidders / buyers watching or bidding if not more.
Andrew, you are right, it was a good effort and good showing for being in the middle of the auction craziness going on right now. Perhaps you can now see what we deal with every day and the challenges involved…..
Since inventing the live domain auctions for the industry in 2004, we have seen a lot evolve and learned a lot. We would be happy to host your monthly auction and help you draw even more interest and sales going forward.
We look forward to working with you again on this and congratulations.
Snoopy says
“– we just sold Guns.com that way, sold Porn.com for $9.5M after two auction tries as well….and many others.”
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I can imagine names that being promoted after the auction but for the average name going to a live or extended auction I think generally zero effort is made to sell the name if it doesn’t sell at auction. It just ties up the name for a couple of months. I think live auctions would get more listings if they had much shorter exclusivity periods, or none at all like greatdomains.
Drew says
>Inventory is the key.
Adam, Adam, Adam, if Sahar’s told you once, he’s told you a thousand times*
Liquidity is the key.
http://www.conceptualist.com/2009/04/08/why-you-should-insist-on-liquidity/
Get with the program, or go home.
* Actually, it’s maybe a lot more than 1000.
Results 1 – 10 of about 5,860 for +conceptualist.com +liquidity
Drew says
>Since inventing the live domain auctions for the industry in 2004
Monte,
My Mummy used to say (to my brother, cough hack) “if you don’t stop playing with that, it’s gonna fall off”.
Maybe you should start listening to yours?
http://www.allbusiness.com/media-telecommunications/internet-www-domain-names/6656089-1.html
Monday, August 9 1999
“The auction was broadcast live over the Internet and thousands worldwide “tuned in” to view it in progress.”
Attila says
While I can not agree more how there should be a more consolidated platform of auction sites rather then 10 different auctions sites. However I also have to think whether or not it will get congested with buyers and fake bidders who drive up the price.
I’ve bought several domains in the hundreds that would normally end in the thousands on sites like snap and namejet. I think I prefer to scour the 10 auctions sites and hope someone else with deep pockets isn’t around when I am after a good name.
Then again, regarding namejet or snapnames, it doesn’t seem any good domains exist anymore due to those cheap bastards who try to cut out the auction process and contact the previous domain owner. Only to “notify” the previous domain owner their domain expired. I know, I sound bitter, It is what it is.
Soon I will jump on the band wagon and outbid all these cheap bastards who offer peanuts to these previous domain owners. Like they say, can’t beat them, join them and offer 3x more peanuts!!
Howard says
@Monte
“Since inventing the live domain auctions for the industry in 2004, we have seen a lot evolve and learned a lot.”
Sorry, but you did not invent the live auction in 2004, I did!
monte says
drew – we actually sold Wallstreet.com in March of that year…also live on the internet so that’s 5 months earlier than Drugs.com….but I was referring to a real live auction with an auctioneer in a live audience.
And as we all know, when you when you keep playing with it….it only gets bigger and better 😉
Al Gore says
@ Monte and Howard
It is well documented fact that I hosted the forst domain auction shortly after inventing the Internet!
Freddy says
Wow the egos of this industry are fascinating stuff. You can’t invent live domain auctions. . . maybe pioneer would be a better word.
btw, I invented domain name appraisals as after the first domain Symbolics was registered, I told my friend that domain isn’t worth anything.
stu says
@ Attila the strike is very low according to somebody who dos this.all they are doing is alerting the owner the domain has expired.
Attila says
@ Stu – I know, and thats what killed me. I used to follow these premium name auctions but lately there haven’t been anything worth while. I always see the names in the pre-release lists to come out, however some num nut blogger posts how yet another premium domain expired. Then within days, its over, the domain is renewed and never changes hands. Just to show you how low success rate it usually is.
However since I posted my comment, I’ve contacted about 10 previous owners of domains I really liked and knew would end in the 5-6k range, perhaps more. I am a good talker so when I get on the phone, I know what to say, how to say and offer 3x more then these cheapskates ever would. I’ve scored 6 domains by offering more then the usual wholesale market value, the other two are thinking about whether to sell or not, while the remaining two or three just said exactly what you posted “Thanks for the reminder!”
Even though I am paying more then market value, I look at the 6 domains I got, overall, I have spent $17k’sh on 6 domains whereas it would of been a lot more if in auction. Quite possibly $25k to $30k and up in which I probably wouldn’t of got the domains if it ever got that high.
Freddy says
@Attila
You are pretty much a numb nut to come on a well read blog and post about how you score domains. Guess you like competition. Thanks
Attila says
I can really care less. Not everyone has $5k or $10k sitting around, and if they did, probably wouldn’t go into one domain. I already went little over (ok, maybe way over) my budget for the 2010 year buying up expensive domains. I am a crazy guy when it goes to domains, just ask anyone who knows me. I need spend the remaining budget on developing out these kickass names into something otherwise it will just continue to collect dust.