Sayings.com has been sold (pending payment)
Guest Post: Why Priced Domains Sell Better, Faster
This is a guest post from Jason Miner, who oversees Afternic’s Sales, Business Development & Customer Service departments while also guiding the Product and Development teams. With over 6 years at Afternic and more than 15 years of senior management experience, Jason brings adept leadership skills to the helm of Afternic.
Online Pricing Models: Auction/Un-priced vs. Buy it Now
For over a decade, online companies including eBay and Amazon have experimented with “buy it now” (BIN) pricing vs. auction/un-priced listings. The auction/un-priced model may be falling by the wayside though, as online shoppers have come to expect that websites will offer the ability to make online purchases instantly. This only makes sense since the majority of ecommerce sites are set up like this.
One major indicator that online shoppers prefer “buy it now” (BIN) pricing is that eBay – the world’s most famous online auction platform – dedicated a large portion of its marketing budget in 2011 toward a “Buy it new. Buy it now.” marketing campaign; and, in 2011, 62% of eBay listings were BIN prices vs. 43% in 2008!
Why Choose Fixed Prices for Domains?
Web design best practices include limiting the number of actions a visitor must take to accomplish a purchase. Requiring a potential buyer to bid or request a price before they can make a purchase just adds an extra step to the purchase process – one that some customers may not be willing to take.
This is one of the main reasons why priced domains sell faster and for higher average sales prices. Pricing your domains up front makes transactions faster and easier for both parties because priced domains meet domain buyers’ expectations for a smooth, fast purchase process.
Fixed Prices Mean Higher Sales Prices
Buyers are always looking for a deal. If there is no price, you are likely to get an offer far below the figure or threshold you have in mind. This is why setting price expectations by setting a fixed price usually eliminates the need to entertain lowball offers.
When the price is set by the seller, the buyer understands the expectations and will usually make a more reasonable offer, resulting in better negotiations and eventually a higher sales price.
Fixed Prices Give You a Larger Audience
Afternic’s Domain Listing Service (DLS) offers domain sellers the largest audience for their names. Only priced domains are eligible to participate in Afternic’s Premium Promotion program, however. Premium Promotion puts your names in front of over 35 Million potential buyers per month across a network of partner sites.
This unmatched exposure to buyers who are actively seeking for domain names, greatly improves the chances that your domain will sell faster.
Send an email to Afternic to learn more about how to price your domains.
Why a Winning Bidder May Become a Non Paying Bidder
Just about every domain sales venue and platform has to deal with non-paying bidders on domain listings, sales, and auctions. It’s happened to me before and I am sure it will continue to happen to others as well. Frankly, it’s frustrating as hell when you reach a deal to sell a domain name and the buyer fails to follow through.
One slimy tactic I’ve witnessed and heard about are people who agree to buy a domain name (whether it’s at an auction, aftermarket venue, or private acquisition), and before paying, they try to sell the domain name to other companies. If they can’t find a buyer for the domain name at a profitable level, they don’t pay for their purchase.
I’ll share an example of this with you. Recently, I was involved in an auction at NameJet, and someone offered to sell me the domain name before the auction was over. The person ended up winning the auction but was a non-paying bidder, presumably when he couldn’t find a buyer. NameJet lost out, and someone who bought it to re-sell it likely lost out since this person probably reached out to many prospects already.
Recourse for the domain owner is generally limited to litigation and/or having that user banned from the platform in the future. Litigation can be expensive, so most people generally let it go without doing much of anything. It’s very frustrating to have a deal fall through, and it’s especially annoying to find out that the buyer has gone out to contact leads for your domain name, potentially hurting your chances of selling the name in the future.
In my opinion, trying to sell a domain name you don’t have the intention of buying unless you can flip it is wrong. If you are new to the domain industry, I caution you to not do this.
DealDash Buys Swoopo Domain Name
A few years ago, I learned about Swoopo, an interesting type of online auction website that had bidders pay for bids. As I recall, there was some controversy surrounding the type of auctions on the site, because a $100 item that sells for $10 could conceivably have hundreds of dollars worth of bids to get to the final sales price.
You can read a couple or articles about the controversy surrounding Swoopo here and here. There are plenty of others that I could find, but I think those two articles summarize the issue pretty well.
According to an entry on Wikipedia, “in March 2011, Swoopo’s website became inaccessible, and a notice page claimed that Swoopo was experiencing “technical issues.” On March 26, 2011, Swoopo’s parent company filed for bankruptcy. There is no information regarding whether the site will reopen or permanently close.”
It looks like the later part of that excerpt has been answered when you have a look at Sedo’s weekly sales report (via TheDomains.com). Last week, Swoopo.com sold for 10,000 EUR (roughly $13,000 USD). When you visit Swoopo.com, the domain name forwards to DealDash.com, which appears to be a penny bid auction website.
According to the DealDash website, “DealDash is the longest running penny auction site in America. DealDash ´s Buy it Now option removes the risk of losing from penny auctions by allowing losing bidders to purchase the product at a fixed retail price and get a full refund of all the bids lost in the auction.”
This seems to be a wise (and cost effective) acquisition for Deal Dash, since there seem to be a significant number of references to Swoopo and quite a few inbound links. I don’t know if the company purchased any other intellectual property, but the domain name was a smart purchase.
Did You Sell Any Go Daddy Premium Domain Names During the Super Bowl?
Domain Name News reported that Go Daddy planned to have their premium listings appear during the Super Bowl. This was big news because GoDaddy spent upwards of $10 million producing and airing its two Super Bowl commercials, and as a result, the company always experiences a huge traffic surge to its website.
Since domain names listed on both Afternic DLS and Sedo MLS are shown on Godaddy searches, I was wondering if anyone saw an uptick in premium domain purchases on Sunday night and/or yesterday. I don’t have a large enough list of domain names that utilize the Godaddy premium sales channel, but I am sure some of you have enough and could indicate whether there was an uptick.
Additionally, I was curious if you received more interest than normal in your domain names, whether it came from direct inquiries, form submissions, aftermarket sites, or other sales channels. Anecdotally, I’ve heard that there tends to be an increase due to the attention given to domain names during this busy time of the year.
Last week was a busy week for me for domain sales, but all of them were procured through my efforts rather than through inquiries for my domain names. I don’t think I received any “Godaddy bump,” and I was wondering if you have.
Challenge of Being a Domain Flipper
Most of my business comes from flipping domain names. I buy domain names in private or at auction, and I try to sell them at a profit as quickly as possibly. I subscribe to the churn and burn method of domain sales, aside from those names I keep for development.
One of the most difficult aspects of being a domain flipper is deciding whether to quickly flip a domain name or hold out for a higher offer. To illustrate this, let’s say I bought a domain name for $20,000 and received a $30,000 offer to sell it a week later. For most people outside the domain industry, a 50% ROI in a week’s time is outstanding, especially when we’re talking about making $10,000 profit. However, if I feel the domain name is worth $50,000 minimum, I would likely pass on the offer.
The issue with passing on a $30,000 offer in the hopes of selling it for $50,000 is that the higher offer may never come. Additionally, the $30,000 offer may not be there days or weeks later should I decide that I want to sell the domain name. It’s easy to make an assumption that a domain name is worth a specific figure, but getting a financial commitment for that number is a different story.
The need to maintain liquidity is always in consideration, too, because I need to have enough cash on hand to pay bills and make other acquisitions as well. This is critical because if I have inventory that can’t be profitably turned into cash, my business is sort of dead in the water. I always need to be investing to keep growing my business.
If you buy and sell domain names, how do you cope with this challenge of being a domain flipper?