I am sick of falling asleep in the auctions. I am sick of the hype without
the substance. Domainers bare some responsibility. Stop submitting domains with
no stats. NO STATS = NO RESERVE! If folks don't want to provide stats then folks
should understand that auctions are not the proper route. Plus no reserve does
not mean 'No value.' It just means that it is going to sell right then and there
for what the market deems is a fair price.
1. Forget what the auctioneer tells you is the proper way to handle bidding
at an auction. He is wrong and I will reveal why in a moment. Not every
commodity being auctioned off works the same. But for starters, starting at a
low but reasonable number engages more people as opposed to trying to get the
'Price' right out of the gate. Even if I were to target that domain to buy, why
would I?? Why would anyone? If not a single peer will pay the opening bid THAT
says a lot. It says you are overpaying the market value in almost all cases. Why
make an overpriced bid? May as well wait until after the auction and make a deal
at a lower price. So you don't need an auctioneer if he won't run the auction
for DOMAINS. Not houses, not art, not jewelry, not collectibles.....Domains!
2. If you have a domain and it is priced over $10k it MUST include stats of
some sort. If not, then there should be no reserve. Simple as that. Alexa
numbers are not stats. Tell me how many unique visitors it got last month and
how much it made. That isn't asking anything other than 'Is there an engine in
that car?' If you want to sell the domain stop being scared to release stats. A
domain with 100 monthly visitors may have great value to someone because you can
grow that 100. It is infinitely harder to grow from zero.
3. Start low. On a $50k domain maybe $10k. If nobody is willing to bid
$10k, move on and do it quickly. If someone does bid $10k don't waste everyone's
time looking for $10,500 or even $11k. You should go to $15k. Point is the
increments are important. It builds a foundation of bidders and THAT creates
excitement and a better chance of a sale.
When 4 people bid $10,000 on a domain it create a 'Floor.' A Value. So then
the $50k becomes less of a risk. If 4 are bidding $40k you have an idea that
others see value as well. That gives people confidence to bid it up higher
because the true value comes to the surface. Even if the domain does not sell
and the top bid is $22k, the seller can come back next auction and instead of
$50k, he may be at $25k and that may be a different outcome. If many people bid
at $40k I realize I can buy that domain at $50k and likely have customers at
$40k. Then the sale is not a $50k RISK. It becomes a $10K risk and that is a
HUGE incentive to buy. It's a huge difference. It's a confidence builder in a
world that has yet to put much confidence in domains.
4. Reserves should not be announced before the auction. Loose price
categories are fine. 'Under $10,000' '$10k-$25k', '$25k-$50k', $50k-$100k'
$100k-$250k' $250k-$500k, $500k-$1M, $1M-$2M, $2M-$5M. Does not have to look
exactly that way, but it is a better guideline.
'No reserve' domains can even open up with a minimum starting bid. That is
the way you do it if you want to start the auction at the reserve price. But
those have to be less than $5000. It does not work on the higher end domains as
was the original motivation for this post.
5. Bidders create value. They are the true valuations of the worth of a
domain assuming you have a qualified audience. Walking away with not so much as
a REAL valuation is really shortsighted. I even believe records should be
memorialized to show the high bid of each domain.
Not showing reserves will help eliminate 'Show bidding.' What is 'Show
bidding?' It is when you bid high on a domain that you know what the reserve is
but don't go to the reserve with the only motive to look like a big shot in
front of everyone. In other words, let's say you have a domain on the block with
a $10 million reserve. The bidder bids $9M knowing there is no way they would
buy it at that level and knowing there is no way the seller will sell at that
level. I know some that do this over and over again and without advertising the
reserve in advance eliminates this problem and these showoffs can take it
6. Stop telling me how great a domain is. Show me the damn stats and stop
the BS! Tell me how many visitors last month. If it is zero, then what justifies
the price to wholesalers if they can't buy and get a 2x, 5x, 10x return? Alexa
is NOT stats. Google is NOT stats. If you are not prepared to share stats, you
are not prepared to sell the domain name. We are wholesalers not end users.
7. Great domains at reasonable prices will always sell. Computer.com and
Camera.com would still sell today even in this market. Great domains are great
domains in any market.
There are so many more points to make. I probably have not done an adequate
job of articulating everything I am thinking. It is difficult to explain. It is
a big subject with many subcategories. But I hope this opens up the
conversation. I don't have all the answers but I sure as hell know when
something is not working properly. We don't have the luxury of getting it wrong
in the future. Way too much time has already been wasted on crap that won't sell
and prices that make you chuckle with disbelief. I will post Part #3 soon
Have a GREAT Day!