Domain auction process is fatally flawed and simply will not work well

[David G]

Some time ago I did a lengthy post regarding the fact my experience has been that auctions simply do not work for domains or websites. At that time I mentioned I had an excellent active website (this was several yrs ago when domains were in their heyday).

It had some great and costly Cold Fusion data based programming, it was up and running approx 2-1/2 yrs., had good traffic with about 35,000 (over 2 plus yrs) hits, was ranked well in the SE's, we even had more that 1,000 PAID MEMBERS who paid a $67-yr fee to participate and got some other benefits too, not directly related to the auction site,

Out of the 1,000 or so domains (some with developed sites) listed for sale (many good names), we had ZERO sales and few bids, that's right - no sales at all. Granted, the average asking price was more than the ridiculously low prices at DNF auctions, but I feel were still reasonable based on the overall quality of the domains.

The prices were NOT the problem except in only 1 case I was aware of. The fact is almost no one wanted to bid. Lots of traffic but little activity. We also sold finacial books on the same site and they always sold good. In fact, the books sold so well we ran out of inventory and stopped selling books.

After much thought and discussion and hearing from other domainers we came to the conclusion the domain auction process is totally flawed and fudamentally unsound. Few if any buyers want to engage in a bidding process on domains. I finally closed the website in disgust, after losing lots of money on it and untold thousands of hrs of time too over 2 plus yrs.

Why would buyers want to compete with others and drive up the price or deal with unknown buy prices beyond the reserve when there are zillions of names for sale? It is so much better to simply check Whois and send an email or PM and make an offer with no competition from others as in an auction environment.

It is a buyers market, not a sellers market, and auctions are often best used on something which is conceived as or is in short supply or a unique product and service, and in mostly a buyers market. Most of the domains are not that good and as such are far from being unique and in short supply as there are so many other options including similar names which are unreg'd.

These are reasons I have not been concerned about my total inability to even visit the live auctions since day one due to my computer setup not being compatable with the auctions Javascript. I would never use the live auctions as a seller or buyer, even if my Java worked so I did not worry about it.

P.S. I should make it clear my site was not a live auction site like dnf. It was an auction site but did not have bids only at certain times but 24X7, similar to Afternic. I really don't think that matters much, in fact I feel a live auction site may even be less successful overall, it simply is a flawed concept overall.

Just my opinion. Any thoughts from others, perhaps other domainers who had auction sites, I know there are several of them here (and understand they were also unsuccesful).

 

[Cash Is King]

Originally posted by CoachRock
Someone could just list their crappy name for $15.00 as opposed to $1.00 ! ! !

Each name should be submitted to a process that assigned a minimium appraised value.

If the name met certain criteria then it would be listed in the next live auction.

You could post each name as a poll and each member could vote for a range say:

$1 - 10

$11 - 20

The above Names would end up in the Value Auction (public invited)


$21 - $30

$31 - $40

$41 - $50

$51 - +

The above Names would end up in the Platinum Auction (members only)


Just an idea not sure if it's good or bad or just needs developed.

I know I sure missed not being able to post and communicate with members here as I did not have a membership. I think there are ways of making the forum a market for dominers and retail clients. Just keep expressing ideas here and something good will come along.

Thanks,

CoachRock

Good Points Coach. How do you keep resellers from giving wholesale or less than wholesale appraisals? Value is in the eye of the beholder. Just like Duke, I recently sold cdzilla.com for $350, developmentoptions.com for $350 and offpriceclothing.com for $275. Appraisals by the resellers for those names would amount to reg fee to maybe $25. There is no exact science. We need to open this up to the public, raise the minimum, and start making some money.

 

[bidawinner]

$15 min is way to high..

I could see a $4 -$5 min just enough to still encourage bidding but not scare everyone off and REALLY make the auctions look dead.. which is what $15 min would do IMO.

 

[Cash Is King]

Originally posted by bidawinner
$15 min is way to high..

I could see a $4 -$5 min just enough to still encourage bidding but not scare everyone off and REALLY make the auctions look dead.. which is what $15 min would do IMO.

Bid

Maybe we need an NBA Championship pool to divert our emotions. If $15 scares people off maybe they should not be in this business. We as resellers are here to make money. Most of us pay between 7 and 9 for a reg. a %50 markup is not unreasonable. We need to reg better names.

 

[bidawinner]

Originally posted by WebHold


Bid

Maybe we need an NBA Championship pool to divert our emotions. If $15 scares people off maybe they should not be in this business. We as resellers are here to make money. Most of us pay between 7 and 9 for a reg. a %50 markup is not unreasonable. We need to reg better names.

No you dont understand, most of the $1 names are names that people no longer plan on developing or could NOT sell at the higher prices already.

And EVERYONE already understands that.. so these are names that peopel are just trying to recoup a few bucks ...and in the meantime others will pick up for a dollars ..

$15 will do nothing...proff.. go back through the auction and count how many names went for $15 or more...

Think of it like a casino... it's all the quarter slots all that noisy action that gives that special quality that says...hey , things are happening in here... it's what gives the casinos that vibrancy.. raise all slot machines to $15 a pull and what do think is going to happen ?

 

[Edwin]

That's part of the problem... instead of seeing the auction as a place to dump junk names that cannot be sold, it should be seen purely as a place to sell names that are at least "sellable" at a modest markup to reg fee (e.g. $15).

That would hopefully (over time) help focus peoples' minds so that they gradually improve the average quality of the names they're regging.

Basically, outside DNF, if you reg a worthless domain, you lose ALL your money. As it stands right now, you will most often get $1-2 back from somebody willing to pay that much to take a chance and play with the name for the remainder of the registration period.

This makes the "risk" of ownership feel less, and at the same time contributes psychologically to a feeling of "Hey, I can pick domains that sell... they're just not YET selling for a decent amount of money".

Put another way, at $1 minimum bid some domain owners may close 4-5 "sales" every week. At $15 minimum bid, they may NEVER close a sale. Which situation (however painful to accept at first) provides them with a more representative view of the value of their domains and the advisability (or lack of advisability) of registering more names?

Wool needs to be pulled from eyes, folks! If a name is junk (and I mean a true no-hoper) the auction shouldn't be seen as the last change to salvage $0.10 on the dollar. That's one of the main reasons the current setup is failing so bad.

 

[Cash Is King]

Originally posted by Edwin
That's part of the problem... instead of seeing the auction as a place to dump junk names that cannot be sold, it should be seen purely as a place to sell names that are at least "sellable" at a modest markup to reg fee (e.g. $15).

That would hopefully (over time) help focus peoples' minds so that they gradually improve the average quality of the names they're regging.

Basically, outside DNF, if you reg a worthless domain, you lose ALL your money. As it stands right now, you will most often get $1-2 back from somebody willing to pay that much to take a chance and play with the name for the remainder of the registration period.

This makes the "risk" of ownership feel less, and at the same time contributes psychologically to a feeling of "Hey, I can pick domains that sell... they're just not YET selling for a decent amount of money".

Put another way, at $1 minimum bid some domain owners may close 4-5 "sales" every week. At $15 minimum bid, they may NEVER close a sale. Which situation (however painful to accept at first) provides them with a more representative view of the value of their domains and the advisability (or lack of advisability) of registering more names?

Wool needs to be pulled from eyes, folks! If a name is junk (and I mean a true no-hoper) the auction shouldn't be seen as the last change to salvage $0.10 on the dollar. That's one of the main reasons the current setup is failing so bad.

Edwin

Well stated. Hopefully DCG will see the value of our recommendations and implement changes for this weeks auction.

I previously mentioned in this thread that proxy bidding should be eliminated for atleast a week or two. Live means live and any additonal people at the auction will be a benefit. We have a system that allows you to play arm chair quarterback and check it on Monday morning.

Weekly reminder e-mails or pms to all 2000 members would help as well.

 

[A D]

I am here watching and reading like everyone else and it is becoming clearer that this is like any other industry.

You have those that like to complain and you have those that offer solutions. The latter is clearly appreaciated and we will make changes that will help the latter group.

It is also clear that those selling domain names for $1 just like to see there name in lights and do not have any plans on making money in this industry.

If I had a domain that was worth $1, I would rather eat it that post it for sale.

It is clear that we need to change the forum to be better targeted towards business clients looking to spend rather than kmart shoppers. We need a good mix of both.

comments please!

-=DCG=-

 

[bidawinner]

Well I disagree,

You guys are stubborn but I'll try one more time...you need VOLUME.. you need a lot of people participating to gemnrate the "excitement" and flow of a good auction.. the FACTS are you MOST names are junk in the sense that someone can jjust reg something else equally as good for $89.. you raise min to $15 and you wont have anyone at the auctions..

Those are facts .. NOTHING is stopping people from listing thier top tier names the way the auction is set up now.. nothing is stopping you or anyone else from starting your domains ar $15.. are they ..just more facts people..

And some people do.. and when Gregr and everyone lists their top names then the auction results reflects that.. the so so names are going to be thier no matter what price you start them at..just means fewer will be sold... less action no matter if it's only a buck otr 2 means less people will participate meaning even more boring auctions...and less money transacted...


But hey, I'd certainly lioke to see DTG raise it to $15.. then I dont have to explain..you'll see for your self by the 2 nd auction..

Bid

Originally posted by Edwin
That's part of the problem... instead of seeing the auction as a place to dump junk names that cannot be sold, it should be seen purely as a place to sell names that are at least "sellable" at a modest markup to reg fee (e.g. $15).

That would hopefully (over time) help focus peoples' minds so that they gradually improve the average quality of the names they're regging.

Basically, outside DNF, if you reg a worthless domain, you lose ALL your money. As it stands right now, you will most often get $1-2 back from somebody willing to pay that much to take a chance and play with the name for the remainder of the registration period.

This makes the "risk" of ownership feel less, and at the same time contributes psychologically to a feeling of "Hey, I can pick domains that sell... they're just not YET selling for a decent amount of money".

Put another way, at $1 minimum bid some domain owners may close 4-5 "sales" every week. At $15 minimum bid, they may NEVER close a sale. Which situation (however painful to accept at first) provides them with a more representative view of the value of their domains and the advisability (or lack of advisability) of registering more names?

Wool needs to be pulled from eyes, folks! If a name is junk (and I mean a true no-hoper) the auction shouldn't be seen as the last change to salvage $0.10 on the dollar. That's one of the main reasons the current setup is failing so bad.

 

[Edwin]

Actually, if you go with $15 and a limit of 3 or 5 names per person per auction, I believe the quality improvement - while perhaps not a whole order of magnitude better - will show on the very next auction.

Especially if you implement the "no reposts" system I suggested.

You could make things even tougher yet: $15 minimum bid, 5 names per week and a "pool" of 25 listings per member. Every domain that fails to sell reduces their pool by 1. Every domain that DOES sell adds 2 to the pool.

When the pool gets to zero, you have to wait 1 month before you can auction any more names. At the end of the month, you're given 10 free "pool" credits to try again.

That way, rather than keep posting junk at $15 that won't sell, those with weaker portfolios will be more selective and maybe only make use of one or two of their 5 sales slots each week, but offer names with a much greater chance of being sold.

 

[A D]

Good point Edwin!


Look for changes being announced to auctio before wed.

-=DCG=-

 

[CoolHost.com]

Yup, I'm one of those "complaining" I guess!
Thing is, I bought into a vibrant system ... and that system seems to have broken down. IMHO there seems to be an emphasis by management to "attain 300 Platinum", seemingly at the expense of the things that we bought in to. There are "guests" which we're told have converted to Platinum ... great ... but this has had no positive effect on crucial areas, such as the Live auction(s) or Sales thread(s). We're not told where the traffic is coming from ... or if it's targeted traffic.
The site is inactive compared to a month, or even a few weeks ago. I've seen inferences to changes being made, such as to be "better targeted towards business clients", or making the site a "retail site". To date, all I've seen is newly added categories that don't seem to be of much interest and a very severe drop-off in activity and membership enthusiasm. Previously banned members were allowed to return ... after paying for Platinum. I've been sworn at in the chat, and called names in the threads, even the (my own) Sales threads. There is little doubt people are frustrated.
There are LOTS of great comments being posted! There's some good "complaining" going on too ... which, many times, leads to even further constructive comments. It's good to hear that management is reading and listening ... but WHAT does management propose? Specifically, what changes have been made for next week's auction? WHERE is the traffic currently coming from ... and HOW do you propose to increase the amount of "retail" traffic? With all due respect to the paid membership, I'd now like to hear management's COMMENTS. Please.
Thank you.

 

[bidawinner]

The auctions were going great as long as at least a few people offered up some REALLY nice names.. there wasnt one REALLY nice name in the last auction..

Thats why it was a snoozer..

So what are you going to call this...the Sunday night sale ? because it sure wont be an auction...

 

[CoolHost.com]

Originally posted by DotComGod
Good point Edwin!

Look for changes being announced to auctio before wed.

-=DCG=-

I was typing when this was posted! Thumbs up.
THIS is what I'm talking about. Keeping US posted!
Thanks.

 

[_Yakov_]

Originally posted by DotComGod



Look for changes being announced to auctio before wed.

-=DCG=-

1) Big LOL @ "poo-pooed"

2) Definitely some changes need to be made.
As I see it, it has to be a mix of "changes in rools" + "quality domains" offered trough the auction + may be some exitmement.
A little entertaiment is always a plus. I guess something funny should be implemented in order to achieve a great progress. It must be beyond a simple understanding of "buy-&-sell", it has to be "make-business-while-making-fun"...

BTW, po-pooed.com is available

 

[bidawinner]

4 Names sold for more than ! $15 :laugh: you really think anyone is going to stic around for that ?

over 150 names had a MINIMUM of $15 which you all so brilliantly think will solve the problem, (sarcasm) .. yet only 2 of those went over $15 ..

meanwhile there where only 50 $1 names listed on ALSO 2 of them went over $15 and only 8 of those didnt recieve any bids at all compared to 148 with a $15 MINIMUM that recieved absolutely no bids !

And thats how you are going to fix thew auctions? by raising the bid to $15 so we can watch 200 names pass by with 4 or 5 sales ?

My only question is..Who does that benefit ?

You need Participation..and you think your going to get it by excluding all but 2-3 peopel ?

I think you need to re-think this..


I can understand a $4 min.. something reasonable .. half a normal registration..

AND DTG need to market to the high rollers, get 4 or 5 people in here like Gregr had that will buy and sell decent names..that will attract even more people ..attracting a nice flow of really ggod names and increasing the the bids on the better "$1 domains"

 

[DomainOgre]

I agree with all of Edwin's ideas except the $15 min. The pooling of names for each seller, in particular, is an excellent idea.

I don't see why it would not work with $1 names. If each seller has only so many chances, that might discourage some of the $1 names already.

As far as the $15 min bid goes, you already have something similar on eBay with its usual $15 transfer fee per domain name. Are those high quality names being sold? No, because most are worst than the ones sold here for $1.

 

[bidawinner]

Originally posted by Edwin
Actually, if you go with $15 and a limit of 3 or 5 names per person per auction, I believe the quality improvement - while perhaps not a whole order of magnitude better - will show on the very next auction.

Especially if you implement the "no reposts" system I suggested.

You could make things even tougher yet: $15 minimum bid, 5 names per week and a "pool" of 25 listings per member. Every domain that fails to sell reduces their pool by 1. Every domain that DOES sell adds 2 to the pool.

When the pool gets to zero, you have to wait 1 month before you can auction any more names. At the end of the month, you're given 10 free "pool" credits to try again.

That way, rather than keep posting junk at $15 that won't sell, those with weaker portfolios will be more selective and maybe only make use of one or two of their 5 sales slots each week, but offer names with a much greater chance of being sold.

Pool wouldnt be a bad Idea Ed, except people need to be able to pull names out of their "pool" at any time before that weeks auction.

I think we all have names we have listed elsewhere and we dont want that name "locked" in some pool only to have an outside offer come up..

 

[chatcher]

Originally posted by DotComGod
If I had a domain that was worth $1

Don't be so modest, DCG. You have several names that are only worth $1!

I don't think proxy bidding is the problem - without it even fewer names would have sold last Sunday. I bought two with proxy bids for the starting bid price. (I was late for the auction, but was there in spirit.)

 

[chatcher]

What it will take to generate more interest is some desirable names at low starting bids. Gregr used to put those in, and it had a marked effect on turnout, which boosted all bids. Call it "seeding" the auction. The problem is that it takes guts to risk good names at $1 opening bid, especially with auction participation down.

There are enough of us interested in seeing the auction improve to make it happen. I will commit to starting a three-letter .com for $1 as soon as 9 other members will make a similar commitment. I am sure there will be a noticeable effect on participation.

My suggestions would be, keep the proxy, keep the $1 minimum, possibly limit the number of listings per member, possibly disallow relistings of unsold domain names, possibly create some kind of penalty/reward system for sales volume by number of names or dollars that allow more listings per auction for successful sellers, or less for unsuccessful sellers.

 

[Cash Is King]

Originally posted by Edwin
Actually, if you go with $15 and a limit of 3 or 5 names per person per auction, I believe the quality improvement - while perhaps not a whole order of magnitude better - will show on the very next auction.

Especially if you implement the "no reposts" system I suggested.

You could make things even tougher yet: $15 minimum bid, 5 names per week and a "pool" of 25 listings per member. Every domain that fails to sell reduces their pool by 1. Every domain that DOES sell adds 2 to the pool.

When the pool gets to zero, you have to wait 1 month before you can auction any more names. At the end of the month, you're given 10 free "pool" credits to try again.

That way, rather than keep posting junk at $15 that won't sell, those with weaker portfolios will be more selective and maybe only make use of one or two of their 5 sales slots each week, but offer names with a much greater chance of being sold.

Edwin

I like your style. You are an out of the box thinker. Smell the freshness everybody.