Price Fixing at Traffic?

[adultdomain]

It seems there might be price collusion between the organizers of the upcoming Traffic auction in nyc and the major auction houses. By Rick Schwartz's own admission "Last year the New York TRAFFIC show produced a record breaking $12M in auction sales. I believe that is more than all other live domain auctions at other shows combined for both 2007 and 2008!!"

As it has been widely reported, there will be 5 seperate auction houses who will fix their prices at 15% commisions. This is an actual increase of commission for most of the auction house with Monte's Moniker facing only a 5% decline.

If there is any evidence that the organizers helped orchestrate a price-fixing scheme, I am quite certain that Feds would love to hear about it. For anyone who doesn't remember, this Time article recaps the sotheby's/christie's scandal.

http://www.time.com/time/magazine/article/0,9171,996261,00.html

According to the article, "It's perfectly legal to drop or raise your prices after a rival does; gas stations facing off across an intersection do it all the time. What's illegal is for two or more rivals to form a "cartel" by agreeing in advance to fix a price... "

FYI the FBI has established a hotline for corporate fraud.. 888-622-0117. We need this industry thrive for all domainers.

 

[Theo]

I think you need a reality check.

Raising/lowering commissions does not entail a "fix". TRAFFIC is a private event with predefined sponsors, exhibitors and participants; there is also a screening process for anything auctioned. It's not an open, all-you-can-eat buffet style bazaar.

 

[HuntingMoon]

15% fees could backfire as well. many domainers are turned off by the number.

 

[Onward]

Moniker is at 15% now...so there is no 5% decline.

 

[Theo]

The commission fee price increase was expected. But nothing too shocking. Just set a reserve price, avoid pressure and nasty surprises

 

[adultdomain]

I think you need a reality check.

Raising/lowering commissions does not entail a "fix". TRAFFIC is a private event with predefined sponsors, exhibitors and participants; there is also a screening process for anything auctioned. It's not an open, all-you-can-eat buffet style bazaar.

Unfortunately commission fixing is very illegal in the usa. The organizers of Traffic (not to mention the participating auction houses) are open to civil and federal charges if there is evidence of price collusion. In the end, it is detrimental for the industry.

If you read the Time article, they explained one of the reasons why the the FBI ultimately went after the chairmain and ceo personally.

" One of the signs that this may be happening is a close, copycat pattern of changes--and this, the Justice Department claims, is what has been happening for years between Sotheby's and Christie's. In 1992 Sotheby's raised its buyer's fee from 10% to 15% on the first $50,000 (on higher amounts the buyer paid 10%). After just seven weeks, Christie's announced an identical fee rate. Three years later, Christie's took the lead by changing its seller's fee from 10% to a sliding scale of 2% to 20%. After a few weeks, Sotheby's did the same thing.

Whether the feds' charges stick or not, the auctioneers' legal headaches have only just begun. The case has invited civil suits by disgruntled collectors alleging that the commission-fixing has defrauded them as sellers and buyers. And indeed, some 38 suits have already been launched, and last week they were consolidated into a class action. Under class-action rules, theoretically anybody who bought or sold art at Sotheby's or Christie's during the period of the alleged conspiracy could become a party to a suit. This could run into thousands of people and tens of millions of dollars in claimed damages."

 

[acronym007]

As with Real Estate, as long as they don't talk about it or agree on a fixed price then everyone can charge the same rate/price. To take this a step further, they might one day offer a clause stating that commission for each domain sale is not fixed by law and negotiable between the seller and selling agency. Then they would be safe to list at whatever allowing the client to address the commission rate.

I can see what you mean, maybe their respective legal teams have good reason for this structure because it's an online business, like ebay, ebay lists it's fees and commission rates. But it is a young maturing industry so they may change this in the future.

 

[adultdomain]

As with Real Estate, as long as they don't talk about it or agree on a fixed price then everyone can charge the same rate/price. To take this a step further, they might one day offer a clause stating that commission for each domain sale is not fixed by law and negotiable between the seller and selling agency. Then they would be safe to list at whatever allowing the client to address the commission rate.

I can see what you mean, maybe their respective legal teams have good reason for this structure because it's an online business, like ebay, ebay lists it's fees and commission rates. But it is a young maturing industry so they may change this in the future.

Absolutely, if Rick Schwatz or anyone representing Traffic did not discuss the 15% commission structure, the FBI does not have a case against him. Rather they would focus their attention on the participating auction houses (i.e. rick latona, Bido, etc.) But the fact that Rick Latona and Bido already charge 10% or lower for their services will certainly should invite some attention.

The industry is growing.. The last thing we need is an attempted cartel to defraud both buyers and sellers.

 

[Theo]

The last thing we need is unsubstantiated, anonymous "contributors" to spread rumors and allege mismanagement a few weeks before a major domain event.

All your posts bash TRAFFIC and allege shill bidding. Perhaps you should step up to the plate and identify yourself. Or, better still, stick to the GFY.com forum crowd.

But the fact that Rick Latona and Bido already charge 10% or lower for their services will certainly should invite some attention.

And Jim Bob of PrettyGoodStuffDomains.org charges 4% - what is your point exactly?

 

[acronym007]

I think it's important to not accuse. To talk about things is one thing but to accuse with no proof is wrong.

I think mentioning the FBI in every post seems like you have an agenda?

Like I said you might of opened a good point of discussion but I think Rick does everything above board. Rick's one of those guys leading this industry, in my opinion he would not intentionally do anything to harm this/his business and the industry that he has a part in planting and growing. Think about that for a moment.

 

[adultdomain]

acronym007, i don't think i was accusing, but re-reading my posts, I was out of line and apologize to Rick.

I just saw a segment on CNBC's american greed about the sotherby's scandal the other night and started thinking if this equates to price-fixing. Acroplex, shill-bidding and price-fixing is not good for any industry. I am not sure what gfy even stands for, but i assuming you are trying to attack me in some way.

But again do i have any evidence? Absolutely not. I crossed the line and was out of line. Once again, my apologies to Rick. I do not agree with his outspoken style, but nobody i know has come close to his accomplishments.

 

[Theo]

GFY.com is an adult webmasters' forum, check it out. Not attacking you more than your own onslaught against TRAFFIC.

 

[acronym007]

acronym007, i don't think i was accusing, but re-reading my posts, I was out of line and apologize to Rick.

I just saw a segment on CNBC's american greed about the sotherby's scandal the other night and started thinking if this equates to price-fixing. Acroplex, shill-bidding and price-fixing is not good for any industry. I am not sure what gfy even stands for, but i assuming you are trying to attack me in some way.

But again do i have any evidence? Absolutely not. I crossed the line and was out of line. Once again, my apologies to Rick. I do not agree with his outspoken style, but nobody i know has come close to his accomplishments.

It's all good my friend, let's move beyond this and have some other conversations.

 

[nameadvertising.com]

FBI going after domain sales commissions (fixed or otherwise). That's absurd. Seriously! When it happens, reopen this thread.

 

[George Verdugo]

thats crazy !!!!

 

[ksinclair]

Note also that BuyDomains charges 20% when they sell one of your domains, and DnCartoons is at 8%. So there are many different rates. People are searching for what models work.

To me the ideal number, symbolically, would be to charge what realtors charge: 6.5%. But that is too low to make a reasonable return, given how small the average domain sale is compared to physical real estate.

Moniker ought to charge a small upfront, fixed fee for a domainer just to submit a domain for consideration for the Live part of their auctions. If they did that then they would not get so flooded with domain applications, most of which have no chance to make it into the Live. Please don't hate me for suggesting this (its not even my idea; its from a domainer friend, so hate him not me).

Kevin