From my perspective (as an infrequent buyer on Sedo), a seller pushing a domain name to Sedo auction after receiving a private offer is a bad idea, and it may cause the seller to leave money on the table, as I will explain below.
A couple of weeks ago, I made an offer on a domain name that I wanted to buy for somewhere in the $1,000 range. I don’t have a record of my opening offer, but it was in the ballpark of $500 and the owner’s counter offer was $1,000. Once I received the counter offer, I knew in my head that I was going to buy the domain name, but it was just a matter of how much I would spend, since the owner’s expectation and my expectation were in the same range.
I didn’t want to buy it now for $1,000, figuring that we’d meet somewhere in the middle between our two offers. I counter offered at $688, hoping the owner would either accept the offer or come down somewhere in the $800 range, where I probably would have bought it or countered at $750, with the idea being that I would get it for $200+/- less than what I wanted to pay.
Instead of doing what I expected, the seller sent the domain name to public auction, which is his right to do, although it was annoying to me. If I won the auction, I would either have to pay Sedo to keep the sale private (even more annoying), or my purchase price would be disclosed, thus taking away an advantage when I want to quickly re-sell the domain name.
As the auction came to an end, another bidder jumped in and bid $738. I opted to not outbid this price, and the domain name was sold for $738. I didn’t want to get carried away in a bidding war, and I didn’t want to allow the owner to make more money by using my private offer as leverage. As the saying goes, I cut my nose to spite my face, but there are plenty of other good deals out there.
Had the domain seller opted to initially reply that $1,000 was his final price, I would have bought it. Instead, he tried to squeeze as much money as possible out of the name by going to auction, and he lost out on $250+. Not a big deal when all is said and done, but it’s 25% left on the table. Had we been talking thousands and not hundreds, that would have been a nice chunk of change.
Pushing a domain name to auction may seem like a good idea to make as much money as possible from a domain name, but this is a real example of where it cost the seller some money.