Auction sites can sometimes give sellers a huge advantage, even propelling the selling price far above the market value for a domain name. Alternatively, it can leave the seller without a single bid. While auctions can be quite unpredictable, there are a few things you can do to pull the odds in your favor.
If you’re selling a quality domain, you should use an auction site known for selling domains, not a consumer-based auction site like eBay. If it’s a good investment domain, other domainers are more likely to see a domain’s real value than the end users.
On the other hand, if you are selling a name that comes with a developed website and if the domain name itself has very little investment value, then an eBay auction might be more promising.
The starting price for an auction is instrumental in determining whether or not anyone will bid. Starting very low seems like the ideal way to start a bidding war, but a very low starting price can just as easily create a low-value perception in the minds of bidders. If you’re auctioning off a number of domain names, you want the bidders to perceive your portfolio as valuable and worth their money. If all your domains have rock-bottom starting prices, people may simply assume that the names are worthless, especially if the auction involves many inexperienced buyers.
Experienced buyers will price the domain name on its own merits, probably ignoring the starting bid or the reserve price. They’ll decide on the highest price they’re willing to pay for the name and use that as their top bid. The more experience the bidder has, the less likely they are to enter into a bidding war with other bidders, though that doesn’t mean it won’t happen.
Domain auctions, like any other auctions, can create a water-hole mentality that drives people into a bidding frenzy. When an auction has zero bids, the name is more likely to be ignored by both the experts and beginners alike. But several bids on a name can attract attention. When people see that other people are interested in something, they’re much more likely to become interested themselves. If nothing more, they’re more likely to take a moment to investigate.
This behavior pattern often tempts people to bid on their own domain names for the sake of raising interest. Not only is this a questionable technique, but it also often fails. If no one else bids on the domain name, the seller/buyer ends up paying a commission to the auction company just to keep their own domain. If there are several domains involved, and if the bids are high, this commission could add up to a sizable amount.
When selling at an auction, play it safe, play it fair, and earn yourself a reputation among the other domainers as someone who can be trusted. It might not help you make a lot of fast bucks, but it will help you build a solid domain name business and add overall value to your portfolio.
06/12/2013 at 09:31
Very interesting and quite good and realistic article, cheers.