Rick Unleashed on Auctions….Part 3

Part 3

End users will NEVER come to the domain auction in mass. Never. They will
come one project, one need, one domain at a time. So you can't come to an
industry auction and expect end user prices. Each auction house is doing what
they can and each domainer must do what they can if they want to bring the end
user to the table. It takes legwork and it is not easy to do.

At the end of the day we are speculators and collectors and developers.
Nothing makes me happier than to buy a really prime domain name. But we have to
be real. If I want to sell candy.com to a wholesale audience I can't ask a
retail end user price. I can try and get millions for Candy.com from an end
user, but if I am going to wholesale the domain to domainers, I have to get very
realistic on the price. It's a different arena.

The domain owner that wants to sell should not assume low stats will scare
somebody off. When I bought Property.com I got the stats. Not exact. But I saw
there was life. While everyone else is worried about 2x, 3x, 10x, I bought the
domain with x in the HUNDREDS of years. Literally. No joke. Because stats are
just one element in my valuation. In time I got it down to under 100 years. Then
down to 80 years. 50 years, 25 years. 10 years. 7 years. In the future it could
be annually and perhaps less than that.

So if I see a domain making $3 a month I can still calculate a return.
Don't tell me what to factor in or how much weight to give it. That is why so
few really have a handle on valuations. I see domains selling for $100k that
should sell for $1k and I see domains for $1k that are worth $100k.

As I indicated, this is still just a number of thoughts. There are holes in
those thoughts. They are purposely there. This is the beginning of a discussion
and a massive change not the end. I reserve my right to append to this post and
amend. All I know is we can do much better and as an industry it is time to
demand it. Just like reality hit the real estate market, reality will hit the
domain market. You can own all the crap and really walk away with nothing. You
can own one great domain and build an empire.

It is not in anyone's best interest to see any auction fail or have poor
results. I don't have all the answers. I can just throw on the table as many
elements as possible and start domainers and auction houses thinking. So the
spirit of this is to share how I see it to anyone who is willing to listen.
Willing to try a different way because there is strong evidence that we are
getting off the trail. Too may elements are either missing or are just over the
top. It isn't about having a 200 domain auction. It is about having 200 domains
that are qualified to be auctioned. Better to have 125 quality domains then to
force 200 and know 75 are junkers like that 53 Chevy.

Sorry for the long series of posts. Many of you won't make it this far. But
I wanted to get this off my chest for a long time and this was the right time to
do it. The most meaningful time.
Have a GREAT Day!
Rick Schwartz

7 thoughts on “Rick Unleashed on Auctions….Part 3

  1. RegFeeNames.com

    It was great to see these three posts Today.
    Excellent – A must read for every domainer and anyone that ever plans to bid on a domain name.

  2. Joan Butler

    Great Post. 100% agree.
    I have been trying to get stats for a domain from Buy Domains for some time for my bricks and mortar business and they refuse to give me any. It is a not quite perfect domain, but the best available. I dont expect that it will have great numbers, however one sale can be worth thoasands, so let me be the judge of what 10 monthly visitors or whatever might be worth. I already own several other generics that define my business besides my trade name, this would be another to add to the fold.
    They refuse to give the numbers and now pester me regularily with calls and emails trying to get me to buy it. Just give me the numbers on a not so perfect domain and I can make an informed decision.

  3. Donna Mahony

    So will there be stats on all of the domains at the next TRAFFIC? Who will be verifying them if so?

  4. domain guy

    the domain industry is still in its infancy so an auction model is not the best selling model.in your example you could develope an end user list for candy.com.requiring end users like mars.hershey etc
    and require the auction house to contact these end users.an anology would be like using sotheys for real estate a high end auction house.as usual the domain king points out the flaws in the current industry.you clearly show how far the domain industry still needs to grow in the future.

  5. Domainlogist

    Hi Rick,
    I totally agree with you, especially regarding end users. They are really great! I sold recently one word dot fm domain name for xx,xxx USD to an end user. I doubt that someone would pay the same on the auction.
    Good luck.

  6. Cue

    I have attended a few auctions and usually walk out about half way through – I did this even though one of my names was at the end of the auction.
    One idea would be to have a domain auction focused on end users. Invite Corporate America and the Big Ad Agencies… If client is not there, at least the Agency will explain to the client the relevance of owning the industry (by owning the relevant domain).
    I personally won’t attend another auction unless drastic changes are made.
    I would love to hear how you sold ireport.com? How did CNN approach you?
    I apologize in advance if you have already posted the response, but I have not heard any details.


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