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I'm relatively new within the domain industry and do not pretend to authority. But I wanted to think aloud on the off chance that it starts a useful discussion or benefits any eavesdroppers. Feel free to disagree. I'm not here to complain about my luck in Sedo's auction but to evaluate it.
Here's my conclusion in advance: Sedo's auction events may harm rather than help minor sellers.
This morning was the end of Sedo's February "Great Domains" auction. It was the first such auction in which I participated as a seller--with 5 domains in this particular instance. Admittedly, my domains were not the stars of the show. A Sedo broker asked for a particular set of domains from my portfolio, and I offered a different batch instead--which they accepted on the condition that the 5 domains each have a $100 reserve.
I'm a workaholic not a wishful thinker. Clearly, starting a bidding war is the way to get the most out of an auction. So I marketed my 5 domains to end users, just as I would normally do outside of this auction format. And here are my end results:
5 domains with a $100 starting bid
1 domain did not sell
3 domain received 1 bid for $100 each
1 domain was contested by 4 bidders and went for $1150
Is this good or bad? In my opinion, BAD.
For the 4 domains that sold, here are the acquisition and renewal costs:
$8
$58
$173 (This one went for $1150)
$372
Because Sedo's minimum commission is $50, those single-bid $100 auctions really hurt. 2 of the 4 domains that sold actually lost money: An $8 loss in one case, and a $322 loss in the worst case.
Overall, I made $846 with a couple and lost $330 with the other pair--making a net gain of $516.
When you consider the time spent acquiring these domains, transferring them, and marketing them to end users during the auction, a $516 profit is disappointing or a wash at best.
Did Sedo deliver what they promise? Sedo does publicize their auctions as a whole, with an understandable focus on the big ticket items. On the other hand, for a period of at least an hour yesterday the auction page refused to load (something which I reported to Sedo); and I have no way of knowing how long that glitch persisted. Furthermore, Sedo scheduled the auction to conclude at 9 a.m in the time zone of the Western United States--which meant that people in L.A., San Francisco, and Seattle (my city) were asleep for the final 8 hours of the auction and in their cars or just walking in the door when the auctions ended. Effectively, Sedo eliminated a large population of potential bidders from participating in the critical final hours of the auction. For the employees of Google, Microsoft, and Amazon, and the entire state of California, the auction ended February 22--not February 23. Undoubtedly this translates to fewer bids overall.
Could I have done better? Possibly, if I had begun reaching out to end users a week earlier. But my purpose isn't to kick myself or Sedo. I've simply realized that Sedo's featured auction platform is a bad fit for me--and possibly for most domainers selling at the lower end of the price spectrum. Here's why:
1. Sedo brokers set my minimum price at $100. Normally, I would not risk selling at a loss of nearly 300%. But this was a precondition of participation in the auction. That's a risky choice. If I had been able to choose my own minimum price, I would either have kept my domains or else the bidder would have placed his single bid at $400 instead of at $100. Either case would have been an improvement.
2. Most of the bids I received were a result of my own marketing efforts and not Sedo publicity. How do I know this? Because I tracked individual click-throughs to the emails I sent out, and these coincided with offer views and bids. Perhaps the auction format created a sense of urgency and reliability. But it also imposed a time limit. If I had been able to wait another week for more offers to trickle in or to respond to questions--or even to pick a deadline that wasn't 9 a.m. for groggy people on the west coast with commutes and meetings to attend to--then I probably could have doubled my top auction sale.
I'm not going to advise other domainers what to do. But my advice to myself in the future is not to take unnecessary risks with low reserves and time constraints.
Fortunately, I didn't list my best domains ... or I might have lost them and lost more money in the process.
Here's my conclusion in advance: Sedo's auction events may harm rather than help minor sellers.
This morning was the end of Sedo's February "Great Domains" auction. It was the first such auction in which I participated as a seller--with 5 domains in this particular instance. Admittedly, my domains were not the stars of the show. A Sedo broker asked for a particular set of domains from my portfolio, and I offered a different batch instead--which they accepted on the condition that the 5 domains each have a $100 reserve.
I'm a workaholic not a wishful thinker. Clearly, starting a bidding war is the way to get the most out of an auction. So I marketed my 5 domains to end users, just as I would normally do outside of this auction format. And here are my end results:
5 domains with a $100 starting bid
1 domain did not sell
3 domain received 1 bid for $100 each
1 domain was contested by 4 bidders and went for $1150
Is this good or bad? In my opinion, BAD.
For the 4 domains that sold, here are the acquisition and renewal costs:
$8
$58
$173 (This one went for $1150)
$372
Because Sedo's minimum commission is $50, those single-bid $100 auctions really hurt. 2 of the 4 domains that sold actually lost money: An $8 loss in one case, and a $322 loss in the worst case.
Overall, I made $846 with a couple and lost $330 with the other pair--making a net gain of $516.
When you consider the time spent acquiring these domains, transferring them, and marketing them to end users during the auction, a $516 profit is disappointing or a wash at best.
Did Sedo deliver what they promise? Sedo does publicize their auctions as a whole, with an understandable focus on the big ticket items. On the other hand, for a period of at least an hour yesterday the auction page refused to load (something which I reported to Sedo); and I have no way of knowing how long that glitch persisted. Furthermore, Sedo scheduled the auction to conclude at 9 a.m in the time zone of the Western United States--which meant that people in L.A., San Francisco, and Seattle (my city) were asleep for the final 8 hours of the auction and in their cars or just walking in the door when the auctions ended. Effectively, Sedo eliminated a large population of potential bidders from participating in the critical final hours of the auction. For the employees of Google, Microsoft, and Amazon, and the entire state of California, the auction ended February 22--not February 23. Undoubtedly this translates to fewer bids overall.
Could I have done better? Possibly, if I had begun reaching out to end users a week earlier. But my purpose isn't to kick myself or Sedo. I've simply realized that Sedo's featured auction platform is a bad fit for me--and possibly for most domainers selling at the lower end of the price spectrum. Here's why:
1. Sedo brokers set my minimum price at $100. Normally, I would not risk selling at a loss of nearly 300%. But this was a precondition of participation in the auction. That's a risky choice. If I had been able to choose my own minimum price, I would either have kept my domains or else the bidder would have placed his single bid at $400 instead of at $100. Either case would have been an improvement.
2. Most of the bids I received were a result of my own marketing efforts and not Sedo publicity. How do I know this? Because I tracked individual click-throughs to the emails I sent out, and these coincided with offer views and bids. Perhaps the auction format created a sense of urgency and reliability. But it also imposed a time limit. If I had been able to wait another week for more offers to trickle in or to respond to questions--or even to pick a deadline that wasn't 9 a.m. for groggy people on the west coast with commutes and meetings to attend to--then I probably could have doubled my top auction sale.
I'm not going to advise other domainers what to do. But my advice to myself in the future is not to take unnecessary risks with low reserves and time constraints.
Fortunately, I didn't list my best domains ... or I might have lost them and lost more money in the process.
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