Morning folks!!
I am going to post a blistering commentary on the domain auctions this coming week. Here is the tip of the iceberg and the thing that set me off among many others:
'When you have a $20,000 reserve and the opening bid is
$20,000 that is no auction, That is a PRICE TAG!! It's nonsense! It's a waste
of time and likely did not return the seller the best return if any at all nor did it create any bids other than perhaps one. But you don't need an auction or an auctioneer for that one bid, you need a cash register! Auctions are about momentum, defining value and sales. Now it is time to do the auctions the right way and I
feel pretty qualified to speak out on this.'
Times are way too dire to worry about ruffling feathers of some auctioneer who knows nothing about domains and tells a qualified audience just how great each one is regardless of the quality. EVERY auctioneer is guilty of this so I am not singling out anyone. So get ready for a post that will change the game and shine a light on the deficiencies.
Have a GREAT Day!
Rick Schwartz
$20,000 that is no auction, That is a PRICE TAG!! It's nonsense! It's a waste
of time and likely did not return the seller the best return if any at all nor did it create any bids other than perhaps one. But you don't need an auction or an auctioneer for that one bid, you need a cash register! Auctions are about momentum, defining value and sales. Now it is time to do the auctions the right way and I
feel pretty qualified to speak out on this.'
Times are way too dire to worry about ruffling feathers of some auctioneer who knows nothing about domains and tells a qualified audience just how great each one is regardless of the quality. EVERY auctioneer is guilty of this so I am not singling out anyone. So get ready for a post that will change the game and shine a light on the deficiencies.
Have a GREAT Day!
Rick Schwartz
.
Danny Pryor
Thank you for this! Watching the prices of some domains in the past few months, and even dickering with people who want to charge 10,000 to buy a name, b/c estibot.com says it’s worth 1.5 times that figure, got old very quickly. A domain without any leads, links, traffic or content is just a name. If the owner of a name doesn’t know what to do with it, it’s useless to him. So I feel vindicated by this post, Rick. Thanks!
Francois
And what is the interest to set a $20k reserve and let bidders start bidding at $1k for example?
If there is no bid over $20k then the name will not be sold.
The only interest I see is it may reveal to the seller what is the best price buyers are willing to pay.
Even if I am not sure this info will be accurate as many will not lost their time bidding if they know their max budget will be under the reserve.
So what is the best scenario for buyers, for sellers, for the show?
Don’t give the reserve?
Or maybe just give a reserve range?
When this hapen auction houses often set the reserve range in order the top be the true reserve.
This way the potential reserve look likes lower and the auction become more attractive.
But once the tip discovered buyers automatically know the true reserve fior the others auctions.
Anyone having a response including Rick is invited to post his response.
What is the best way to auction domain names?
Robbie Ferguson
Im looking forward to reading these comming posts Rick.
Its going to be interesting!
Regards,
Robbie
Rki
Well, to a certain degree I can understand what you are saying. The auctions.. and auctioneers themselves have been subpar. I am puzzled why auctions don’t simply state the min bid for a particular name? Hidden reserves and phantom bidding provides 0 excitement for the real bidders. If auctions were TRANSPARENT with a STATED MIN BID, you will find the buyers stream in while the sellers still feel protected.
Don Murray
Auctions are good for buyers, and they are bad for sellers.
For a few reasons.
If you place your place your domain name at an auction you end up targeting just a bunch of domain buyers who are looking for bargains. Great for buyers horrible for sellers. Lets say I own mlsleads.com as I do, I would much rather spend 1 day and a few hundred dollars contacting every home or real estate lead service that exists and let them know an auction will be starting and will end in 30 days for the name. This gives them time to think about.
With most of these auctions they send the list out 300 or 400 names to various domain buyers, not targeted at all, each domain name must be treated like a home. You can’t be sending out a list of beach related domains names, when all client wants is a skiing domain name.
These auctions are great for bargain hunters but in the end the seller gets shafted as 95% of the people out there do not know the domain name exists and that it is for sale.
Don M
Your better off selling it yourself and spending your own time doing it. It could mean 2-10x from what you get from an auction.
Steve Russell
Well, it seems to me that everyone in the domainer world has it wrong, except Great Domains. In the real world, with real auction houses, an auctioned lot’s reserve price is never revealed until it has been met. If a potential bidder doesn’t have the dough to keep bidding…bye bye.
That’s it. Simple. It’s absurd to announce a reserve price before hand. But once the reserve has been met, and bidders are advised, then the bidders for that lot know that the high bidder is going home with that lot. And, THAT’S when it gets exciting!
What makes the domain auctioneers think they are any different from art or property auctions, with time honored rules established for centuries? Perhaps the ignorance of the domaining industry is to blame.
Jeff Hawkins
I agree that a reserve should normally be kept secret but a reserve is a good thing. Protects the seller from a bad auction day or auctioneer.
Example: You have a domain that nets $2000.00 a year. That’s $20,000.00 at 10x net. No point to selling it for less unless you know the net income is going to dry up after a year or so with no other income stream available that you can see.
But an auction shouldn’t be priced to start at actual valuation either. Start low and let the reserve insure the price you need.
The buyers then sets the price and if they reach the reserve they get the merchandise.
And they may have ideas the seller doesn’t realize which could drive the price higher than reserve once the auction heats up.
russell karaviotis
money market today pays 1% or less. Domains on ppc or on their own with google ads
that produce even 1.00 per day=365 per year VS $36,500 in market pay then the same dollar amount.
Yet, that domain name in fact can with some work produce 1.25,maybe 2.00 per day.
the value today that is not properly adjusted for a domain name is that the 1.00 domain name producer if sold for $$10,000 or 25% of what one puts in MM overall is far better with the domain name.
Yet, that is not a major consideration, only at auctions, how cheap one can sell a domain name.
Values are very skewed, and what is sold on an average today for $5000 intrinsically have little or no value.
I.E. low prices on domain names for reserve is a bad idea for sellers, for a buyer that knows what a domain produces now, and that value is low, get a deal.
That is why you see auctions picking the cheapest names overall and truly destroying the domain market overall, leaving good names staying with good monetizers.
JoeP
I, for one, never involve myself in active bidding for anything with a hidden reserve price. In the extraordinary circumstance that I thought that my special situation made the auctioned item more valuable to me than others, and the reserve had not yet been revealed, I would place one bid at the last moment.
I know that any simple strategy has flaws for hard cases. What are some of the limitations of my approach?
Kristoff
Recently, I’ve been making the rounds on a few popular domainer boards, going out of my way to express many of the same views Rick.
It’s obvious there’s a serious deficiency in the basic fundamentals of HOW to run an effective auction (irrespective of the merchandise being presented), benefiting all parties involved.
Not to mention, a primer in SALES & MARKETING 101 is definitely in order.
@Don
Good points.
Continuing to target the”usual suspects” is a recipe for disaster.
Burn the old D2D Rolodex.
Pull out the laser pointer, zero in and offer your product to those that WANT and NEED what you have to offer.