Why I Don't Sell at Live Auctions

Unlike many domain investors, I rarely ever submit any of my domain names for live auctions anymore, and there are reasons for this. I don’t like the terms offered by the auction houses, nor do I believe it’s in the best interest for me to sell my names this way. For what it’s worth, I think the commissions are too high for what is offered, I think the exclusivity period is far too long, and the time it takes to be paid appears to be much too long.
First things first – the commission. I have no problem whatsoever paying someone a fair rate for selling my domain names. No, I don’t expect an auction house to contact every potential end user for my name. However, I don’t believe banner advertising on domain-related websites or email advertising to the same crowd is enough. Simply selling my domain names to a group of domain investors at an anticipated auction isn’t enough incentive to pay 50-100% more commission than other outlets.
If I want to sell my domain names to other domain investors, I know many buyers, and I am very happy to try and sell on my own first (no cost). There are also the forums (like Namepros or DNForum) where people are looking to buy domain names (no cost). Additionally, there are some great newsletters (like Rick Latona, Eric Rice and DomainsNewsletter.com) who reach these same potential bidders at a much lower rate (5-10% per name).
My next issue is the long period of exclusivity that’s required and the exclusivity renewal period if you don’t notify the auction house in time. Yes, I understand that they need to protect themselves so others can’t wait until the day after the auction to buy a name that didn’t receive bids. However, I don’t see auction houses (other than Jay’s blog posts before his auction) that really spend time on particular names. IMO, the auction house should get one opportunity to sell a good name at a good price. If they can’t close the deal, they shouldn’t hold exclusive rights on a domain name. If it really is priced fairly, it will sell at auction. If it isn’t, then maybe it shouldn’t have been listed by them in the first place.
As I told one person that has run domain auctions, there are ways to get around the exclusivity even if the domain is tied up (I won’t mention them because I don’t endorse this whatsoever). Although it’s unethical to do and a good reputation is the most important thing in this business, if a good customer of an auction house does this, I highly doubt the auction house will track them down over a few thousand dollars. The legal fees to take action would be high, it would be tough to prove an illegal activity occurred, and the cost of future lost business would be high.
Finally, I think the period of time it takes to be paid can be ridiculous. When I see a domain sale reported in DNJournal from an auction 2 months prior, I think that’s a bit crazy. If a person has a reputation of not paying on time, they should be prohibited from bidding. Also, something should be done to ensure payment is made ASAP. I bought Secaucus.com at the geo auction, and I am ready to pay. As soon as I receive the wire instructions, I will make payment. I wish others did this.
As Rick mentioned yesterday, there are going to be 5 auctions by 5 auction houses at TRAFFIC New York in September. I think this is going to be great for the industry. I have a couple of great domain names I would consider selling – if the terms are fair for me. Once the 5 auction houses have been selected, I will review the terms. If it’s too late to submit, well, I have no problem selling to clients I know or using the less expensive alternatives available now. I think live domain auctions have reached a saturation point and people expect more from them than is realistic, but I do think the 5 auction format is going to change things quite a bit.
I also believe that auction houses should actively seek to find domain names to list at auction. Forget about asking people to submit their names. Most of these are either repeats or just junk. While the auction houses get blamed for listing poor names sometimes, it must be difficult to sift through 100k+ domain names. I’ve learned that most people think their names are more valuable than they really are to other domain investors (I am prone to this, too), so it’s tough to find good names at fair reserves. The auction houses should go after strong domain names that might not be making money (more on this in a future post). They could hand select their names and use past auction results to entice non-domainers to sell.
For what it’s worth, I would love to see the following auction houses in New York: Moniker, Trafficz, Sedo/GreatDomains, Bido, and Afternic/BuyDomains. I think this would make a very successful show in terms of domain sales – although it’s getting very close to the show.

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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
  1. Good points. Your link to Domainnewsletter.com goes to a parked page.

    Should have been DomainsNewsletter.com – all fixed – thanks!

  2. You are kind when you say they only advertise in domains sites.
    I managed the advertising of the most popular domaining sites (DNForum, NamePros, …) for +1 year and NONE of the live auction organizators never purchased $1 of advertising to promote their auction!
    This is why you have seen me pesting the past year in some blogs…

  3. I agree with all the above… And would add that the “spread” reserves seem strange. An opening bid amount should be set by the seller and that is a binding reserve.

  4. Agree with you on all points.
    Moniker – sure but they have the most to loose and they better get better at picking better names.
    TrafficZ – Okay. Ammar Kubba and Jay W should be able to put together a good list.
    Sedo/Great domains – eh. I can live without that.
    Bido – YES. $1 starting price with no reserve? WOW! If they can round up some good names.
    Afternic – YES. Assuming they would list their own names. Maybe they could have a fire sale and/or offer some of their better names.
    Anyway, leave it to Rick to take everything to the next level… again.

  5. Very good points indeed. If they do not lower their commission rates (a fair request, but unlikely to happen soon), I think they should be doing more to find more and better buyers (outside of domainers).
    If they were to seek out there own names to auction, as you suggest, they could also spend more time seeking out potential buyers. They could come to you months in advance to ask to sell something like Oeniphiles.com, and spend the remaining time contacting wineries and wine experts around the world that would be interested in bidding.
    The more bidders the better. The price goes up, their commission goes up, it benefits everyone.
    Relying on a conference to gather the domainers to bid is at the end of its line. It made sense when domains were trading at a discount to fair value, but they are now trading at or near fair, and need to be sold to developers, not domainers. Developers exist outside of the industry (as well as inside) and will not show up on their own.

  6. Agreed here!
    That’s why I also prefer to sell on forums or privately. Long exclusivity period, many non paying bidders on sedo, and well.. low prices sometimes too.

  7. Elliot, first off love your site! Question: If you had to pick ONE platform or tool to help sell semi-premium domains, what would you choose? Which one site or method would you pick from your experience?

    Thanks for the compliment 🙂
    I would pick none (or maybe Rick Latona’s newsletter). I really prefer to deal in private.

  8. Hey Eliot:
    Congratulation on buying the Secaucus.com. Remember I told you before the you head to the conference that you would either by New Rochelle OR Secaucus. …The Home Depot do not have one their major store there for nothing – especially for its proximity to New York.
    I can tell you won’t regret that name. But it is going to keep you busy. Good luck on it

  9. Elliot,
    I can’t agree with you more! I have been harping on auction houses to earn their commissions and do even the most basic press releases and publicizing to broader markets. I actually just posted a plea to Rick Latona to do PR if he is going to enter the live auction market.
    I didn’t address exclusivity, but I couldn’t agree more. The tighter they squeeze, the fewer people will be left in their hand.
    I think, however, that having auction houses go find domains to sell is a bit unrealistic and would greatly limit the buyers and sellers. We want to grow the market, not reduce it. Auction houses simply need to do a better job of quality control and reserve pricing.
    Thanks for all the education in your posts!
    Jay Lohmann
    Geo and Keyword Domain Investor

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