Hypothesis on Expiry Auction Price Inflation

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In my opinion, For at least the last several years, domain name auction prices have seemingly become inflated. Domain names I was buying for $100 or less seem to sell for $500+ at expiry auctions these days. Hardly a day goes by when there are good domain names available to buy for the minimum bid. It still happens, as I will share later today, but single bid auctions are much more difficult to find these days.

It’s not just one auction platform that has seen this. Pretty much every platform has seen more domain names sell and for higher prices, including GoDaddy Auctions, NameJet, DropCatch.com, and Park.io. It’s not necessarily a bad thing either, although it has made the process of acquiring good domain names for reasonable wholesale prices more difficult.

I believe there are quite a few factors, some being transient, that have led to this expiry auction price inflation. My hypothesis is that several factors, listed below, have contributed to the higher auction prices we have seen including:

1) There is more money to reinvest in domain names due to:
*** Strong domain name sales aftermarket giving investors more capital to reinvest.
*** Government helicopter money.

2) Fewer good domain names available to purchase in private. People have been buying domain names in private for 20+ years and much of the low hanging fruit and weaker hands have let go of their domain names.

3) Domain names are in stronger, better-funded hands, and the cost to acquire privately has gone up. Consequently, people look for less expensive alternatives in the expiry market.

4) GoDaddy adding its appraisal tool output on domain auction pages and better expiry analysis tools available to more people.

5) Domain investment businesses growing their portfolios much larger than before due to:
*** Take advantage of operating at scale.
*** Potential for a large buyout.

6) More competition from end user buyers who recognize the expiry market is a good place to find domain names.

I am sure there are other factors I overlooked, and I am interested in learning what other investors believe has driven up expiry auction prices. Feel free to share your own hypothesis below in the comment section.

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 sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.

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13 COMMENTS

  1. More awareness from people all over the world /universe that domains are becoming a valuable asset and easy to understand compare that BS nft shit- nftbullshit.com or eth shit ethbullshit.com or coin shit coinbullshit.com
    shitcoin dot com

    Q: who dictates the value?
    Q: who controls the money in the eth/coin/ntf?
    q: what happens if everyone withdraws all the money at once?
    q-it there a customer service # to call ?
    q: can be use for criminal illegal activities?

    Simple Qs that most people don’t understand how they work except for the same room of people jerking up the game…..compare to the easy to understand domains.
    /
    Do you see any companies advertising coin/nft/eth on TVs/Radio compare to Godaddy/Wix about domains?

  2. More helicopter money combined with staying home and figuring how to make something out of nothing would be my educated guess here.

    We’re definitely paying tomorrow’s price today though. I believe we’ll see a longer inflationary period where everything will be priced as is, so it’s something that we have to get used to, as well as price in.

    • I think the inflated expiry domain auction market has been happening considerably longer than the US government has been supplying helicopter money.

      • Definitely. I rarely participate in auctions since about 2019, maybe 2018 because I think there are a lot of “new” people foolishly bidding too high.

  3. The pandemic seems to have massively accelerated the world’s move to digital. More online enterprises means more demand for domain names.

    Figures from the US Census Bureau indicate that new business registrations leapt by close to 50 percent around April last year and this elevated level has held up well ever since.

    It seems likely that the same pressure is driving online growth around the world.

    https://www.census.gov/econ/bfs/index.html

    You can click on the Time Series/Trend Charts link to generate custom charts. Running a bar chart from 2018-2021 for example shows the sustained jump with great clarity.

  4. Domains -you can create a site to buy/sell and interact with people all the world ….the cheapest way of communication, the cheapest and fastest way to build a business- it all starts with a domain name.

    That bored APE art crap, only the rich people buy them and then pinned on the toilet wall and they look at it while they shit ….so pathetic

  5. I witnessed this just few days back and we all have bots to blame for the unnecessary hike domain auction prices. I bided for a “pigeon shit” domain only for it to sell at $500+. I checked Archive and all…

    • If it is pigeon shit why did you bid? A lot of people are bs’ing on this kind of stuff, complaining that prices are too high when they buy, then when they sell they say prices are too low.

  6. Between the rise of the price of domain renewals and the inflated auction prices, I am not really buying and expanding inventory unless a great opportunity presents itself. Focusing capital into fewer higher priced buys to upgrade existing inventory that sells.

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