One Thing I Look at When Bidding in a Domain Auction

I am currently involved in a domain auction with a handful of bidders. I want to share a relatively common sense tip that can sometimes help me determine how much I am willing to pay to acquire a domain name.

There is about a day left in the auction, so I am internally trying to determine the maximum number I am comfortable paying. I checked a very similar name (plural vs. singular) to see how it is used and who owns it. I noticed that the similar domain name is listed for sale on a popular aftermarket website. That domain name has a buy it now price of a little under $2,000.

Some might argue the other domain name is more valuable than the name in auction. I could go either way on it, although a case could be made for either domain name. The keyphrase of the domain name in auction has has one extension registered while the comparable name has 5 of the most popular extensions registered.

If I would win the auction and price the domain name in the $5,000 range, a prospective buyer would almost certainly choose the other domain name. Even if I listed it at under $2,000, a prospect would still probably choose the other domain name. My comfort level bidding for this particular domain name is influenced by a very comparable listing.

Put simply, by seeing a very similar domain name on the market with a buy it now price, I can see the price ceiling I would expect should I win the name and list it for sale. I need to factor in the likelihood of selling the domain name I am about to buy, how quickly it might sell, and potential commissions from a marketplace listing. A little back of the napkin math will help me determine how aggressively to go after the domain name.

Elliot Silver
Elliot Silver
About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has closed eight figures in deals. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest. Reach out to Elliot: Twitter | Facebook | LinkedIn

8 COMMENTS

  1. The real problem is when the person listing it cheap doesn’t have a clue how much it’s really worth and that it’s worth much more. I’ve actually occasionally written to people who have a domain to address this with them because I have the other good version, with some success too. You can consider that, not just letting that ruin everything, though I suppose you may not want to. In fact, one time I was communicating with one such person I guess months or more later and he mentioned it apparently not realizing I had been the one who had written to him about that.

    • If someone wrote to me telling me I priced my name too cheaply, I would tell them to buy it themselves and make a profit or mind their own business.

    • John, if they are listing it supposedly “cheap” and it hasn’t sold the likely explanation is you are valuing way too high. If you truly thought it was cheap you’d buy it.

      Sometimes it is a shock when we realise a domain we hold may not be that good.

      • No, it’s hardly that simple at all, Snoopy. And even hawkeyed domainers are hardly noticing every domain out there that might be underpriced.

        I know when my own domains are not that good. I just got rid of well over 500 of them, though they were not bought for the purpose of selling. I’m a user first, seller second. Occasionally I make a mistake and let a good one go though, but my regret rate is miniscule and sometimes I can recover those.

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