Advantage of Auctions Over Private Deals for Inventory

Generally speaking, my largest and best domain name purchases are private deals. More often than not, I spend quite a bit of time and effort to close a deal. These private deals are worth it when buying higher value names. When it comes to standard inventory, though, I would much rather buy at auction than from a private seller.

When I buy a domain name at auction, the only effort I need to make once the name is on my radar is to place my bids. Sometimes I follow along as the auctions close and sometimes I let my proxy bid ride. I can bid higher if I feel like it, but as prices continue to rise, I can also drop out and focus on other inventory. Beyond the research, there is not much effort needed to win an auction.

On the other hand, when dealing with a domain registrant directly, there is often quite a bit of back and forth. When I don’t really care about buying a name all that much (as is the case with most inventory), my role is more limited. I don’t spend a ton of time explaining my offer or my position. I am pretty straightforward. The other party likely spends more time justifying the price.

At this point, auctions and private buys are fairly equal in terms of the effort made.

What sets auctions apart from private buys are the payment and transfer. When I win an auction, the auction platform charges my credit card automatically. If I win above a certain threshold, I may need to send a wire transfer depending on the platform. It’s pretty easy and does not require much effort at all. In fact, I would estimate that 99.5% of my auction wins require zero effort.

When buying from a private seller, I need to make a greater effort to finalize a deal. Typically, I use Escrow.com to close a deal. I also like to use a purchase agreement when buying a domain name. These extra steps take time, and sometimes they can take a lot of time if the seller has issues with the purchase agreement or doesn’t get KYC’d right away.

The domain name transfer is another easy process with auctions. I literally do nothing and the domain name is automatically pushed to my account. I have to track my auction wins to make sure all names get pushed, but that is about all I need to do. On a very rare occasion, perhaps once per year or maybe even less, a name doesn’t get pushed to my account and I need to file a support ticket. Once in a while a name ends up at a registrar I don’t use and I have to jump through a hoop to get it transferred. Occasionally, I will need to set a calendar reminder for 60 days to do the transfer. These are the exceptions to the rules though.

Taking care of a transfer on a private acquisition can be a pain in the tail if the seller is not familiar with domain transfers. More often than not this isn’t the case, but I would say at least 1/3 of private deals require a lengthy explanation about how to do an account change or request an authorization code. Depending on the registrar, it can take a few days for the seller to get the auth code.

When all is said and done, it is much easier to get average inventory via auction than private seller. Auctions today seem to be much more competitive than in years past and that has resulted in higher price. When it comes to buying inventory types of domain names, I would rather pay more in an auction than have to deal with a private seller.