As someone who operates a domain investment industry website, I am regularly approached by people looking to sell their domain names. I hardly ever buy domain names when people approach me in an unsolicited manner, but it may not be for the reason you think. Yes, the vast majority of domain names that are sent are domain names I would not hand register, but my preference is to buy inventory types of domain names at expiry auction.
Earlier this week, I passed on a small group of average domain names sent by someone through my contact form. When I passed, the person remarked that they were similar to names he saw that I had recently bought and wondered why I wasn’t interested in making an offer. I gave him some reasons and used my reply as the base of this article.
This morning, I want to share 5 reasons why I prefer purchasing domain name at expiry auctions over buying domain names from people who send them to me:
Provenance and domain name history – With GDPR in effect for several years and California privacy regulations just coming online this year, it is more difficult to track the provenance / history of a domain name’s ownership. With an expiry auction, I can easily see the domain name expired and I purchased it through a third party platform. This provenance could be helpful when contemplating a future deal. It is easier buying an expired domain name than doing a full Whois history check in addition to standard due diligence.
Domain name wasn’t promoted to end users – Beyond the occasional front runner and possibly an auction platform’s marketing to industry wholesale buyers, an expiring domain name is not typically marketed to prospective buyers. Not only will I probably not be bidding against people who may be future prospective buyers, but I can be certain prospective end user buyers have not been informed of the auction.
Losing deals to other buyers – I have lost too many deals at the final moments because a seller has either decided not to sell the domain name, had a higher bid after an accepted offer, or the deal fell through for other reasons. With an auction (aside from GoDaddy Auctions involving third-party registrar names), I am almost certainly going to receive the domain name if I am the winning bidder and pay on time.
Transparency – In many cases, I know who I am up against in auction or at least I know how many bidders are participating and at what level. When buying in private, I do not know if the seller is engaged with many different buyers or how the negotiation is going to go. I also may not know if the seller is honest or able to follow through with the deal. Note: transparency only pertains to expiry auctions.
Contracts and deal speed – There have been too many times where I have a deal pending and the contract goes through many edits or the contract takes too long to review and approve. There are not individual purchase agreements or contracts with expiry auctions. I simply win the auction and the domain name is provisioned to my account.
When it comes to high value and one of a kind assets, I am willing to jump through some or all of these hoops to get a deal done. They are in high demand and the market to purchase these domain names is highly competitive. When it comes to the average inventory I try to pick up, the extra effort is not worth it to me.