Having had a good nights sleep, after much drinking and partying at the Mansion, enjoying a wonderful lunch at the Ivy restaurant on an absolutely beautiful day here in LA, after reading your comments to my post on the Live auction results, and many other blogs, I’m ready to share my thoughts on yesterday auction.
I was pretty active in the auctions, selling 1 name in the live, 1 in the silent and buying 2 names in the silent and 5 in the live, so my perspective is both as an observer and as a participant.
In bad economic times, people spend less, and buy less.
Simple
As a buyer, your only going to buy if you see value, or something that really fits in well into something you already own.
This is what you saw yesterday.
In such economic times, the less proven, more risky, investments are a tough, tough sell.
So when your looking at 10 of the 200 domains in the auction, being either .me or .travel domains the times really take a toll.
.me domains, which were flying off the shelves, at big prices in NY just a few months ago, is a very high risk, unproven extension (I say this even having bought some of those high fliers).
.travel which has never taken off, is a even more of a risk and unproven extension, so no one expected any big numbers from them.
Such domains are the first to suffer in a bad economy.
Those 2 extensions accounted for 5% of the live auction domains.
The next domains as a class to suffer the most, are those priced above $100K.
So out of the 200 domains, the 21 with a reserve price of over $100K, none of them sold (not counting rodeodrive.com which had a stated reserve of over 100K but sold for $60K).
That accounts for another 10% of the auction.
In all 30% of the domains sold.
So we have now accounted for 45% of the domains up for auction.
So what about the rest?
Many were overpriced.
adblocker.com for example, a nice name but no better than trafficanalyzer.com which sold for $5K, had a reserve of $10k-$25K.
privatepractice.com another nice name had a reserve of over $25K, but was certainly no better than lawreview.com which sold for $8K.
goods.com had a reserve of $50K+, but was that a much better domain, than 2 domains that sold; errors.com which had a $5k-$10K reserve or range.com which had a $15K reserve?
You get the idea.
Finally a lot of these domains that did not sell, we have seen before in recent TRAFFIC auctions:
autoclassifieds.com
comptroller.com
babyfood.com
bachelor.com
dealerships.com
discounttravel.com
zimbabwe.com
Just to name a few.
Sure the prices of these domains were reduced from previous auctions, where they failed to sell, but prices of everything are down. People aren’t jumping all over shares of Bank of America at $7, even though they are basically “on sale” trading at $15 just a couple of months ago.
Seeing the same names again and again, takes the excitement out of the auction.
Of all of the domains making a return appearance, only husband.com and wife.com, which had previously been offered only as a group, at a much higher price, sold separately.
Want a better auction:
Sellers are going to have to adjust their prices if they hope to sell in the wholesale market. You can not price your names at retail and then offer them to other domainers.
Moniker.com is going to have to get strict on pricing. If people don’t want to reduce their price to a wholesale level, then the domain can’t make it into the auction.
Accept no domains priced over $250K.
Any domain priced over $100K better be the quality of screensavers.com.
95% of the domains must be .com, .net or .org’s
Accept no domains that went unsold at a previous auction within the last 2 years.
80% of the domains need to have a reserve of $25K or under including commission.
Those are my suggestions.
You have to adjust to the economics of the world.
If you don’t you have a result like yesterday.
Let’s remember this is a wholesale, domainer to domainer auction.
Retail sale remain strong across MostWantedDomains.com and many other domain sites.
Fly.com just sold today for $1.76 Million.
If this domain was offered at the auction for $500K, it would have gone unsold.
This is the difference between retail and wholesale, end users and investors.
I have sitting in my e-mail waiting for me to respond over 30 offers of $2,500 or more from the last 2 days.
There are buyers out there for quality domains.
Lots of them.
Godaddy is spending $3M plus production costs to advertise domains during the SuperBowl.
As people are losing their jobs by the hundreds of thousands each week, more and more are looking to start an online business, and why not.
Did you see Amazon’s earnings yesterday?
While retail storefronts are losing their ass, online businesses are making profits.
Yes profits.
So yesterday we sold one domain, cosmetics.net for $25K, and bought lawreview.com, heatingequipment.com, trafficanalyzer.com, claypottery.com and complementary.com and still have money left over.
Interestingly, something I haven’t read anyone else comment on is the auction held a few hours later at the Playboy Mansion.
Just a couple of hours after the Live auction at DomainFest ended, another auction of art, jewelry and sports memorabilia started at the mansion.
My wife’s birthday was Tuesday and she always wanted a string of pearl. Personally I hate white pearls but kind of like the black Tahitian pearls.
Well among the over 100 items for sale at the mansion last night was a beatuful set of black Tahitian pearls valued at $25K. I placed the one and only bid on them at $4K and got them for her.
There were plenty of other bargains, most bought on the first and only bid.
Many items went unsold.
Bottom line, domains were not the only items yesterday that failed to sell, and yes, that blue topaz diamond ring worth $35K went unsold for $5K.
and some good domains went unsold that should have sold.
A couple of days ago we wrote a post entitled “Is it a Buyer’s Market for Domains”
Today the answer is clearly yes.
Mike,
Very well said – you are spot on about changing the way Moniker creates the auction list.
Accept no domains priced over $250K – AGREE
Any domain priced over $100K better be the quality of screensavers.com – AGREE
95% of the domains must be .com, .net or .org’s – – TOTALLY AGREE!!
Accept no domains that went unsold at a previous auction within the last 2 years – AGREE
80% of the domains need to have a reserve of $25K or under including commission – – AGREE
Its not about quantity – having 5,000 domains on an auction list doesn’t mean its a better auction. Show me 1,500 names using the guidelines above and sales would be 5 or 10x what they are now.
Excitement is a huge factor for live auctions – exclusivity and excitement are 2 key factors which get destroyed each time more of the same domains are shown time after time.
Of course, Monte works his ass off so kudos to a great job but your words are perfect – the wholesale market (which is what most of the buyers are) has to be reflected in Moniker’s creation of the auction list and no better way to do this then change the way the lists are created next time around.
Great assessment Mike.
The market has changed so the auctions must follow suit. Remembering that auctions are wholesale is important too. The best bet is to hold on to these names until the market improves..
At least your wife got something 🙂
So did you go in the Grotto.
Very good observations, and recommendations. Unfortunately domain auctions are somewhat destined to remain a domainer to domainer auction, because there is no marketing to endusers. Now there may be ‘some’ marketing, but it seems that almost every auction, the ‘final’ name list is not finalized until just a few days before the auction! If the final lists came out ‘at least’ two weeks before the event they’ll be in, there would be time to create buzz and efforts to let others/endusers know about it, other than other domainers!! I had only one in the No Reserve auction (it sold), and have 4 in the Extended, but if I had ‘one’ name in the Live auction, I would be making a personal effort at marketing it to and contacting endusers to make them aware of it, when/where it is, and the various ways they could bid – online, in person, phone etc., if they are interested. But just finding out for sure, 3-5 days before one is leaving to go to the show, limits one’s personal efforts to help market his name and the auction in general. If we want to produce better results at domain auctions nowdays we need enduser awareness of such, and a little more time than a ‘weekend’, for them to assess their interests and commitments to pursue a domain at an auction. JMO.
oh, and some nice names and buys!
Mike, exchanging cosmetics.net for lawreview.com, heatingequipment.com, trafficanalyzer.com, claypottery.com, complementary.com and cash is one hell of a trade.
@Mike
first I want to say you have my utmost respect on keeping this blog so much alive and informational. I have never wanted to start a blog because of the hard work it takes. Anyone spreading word as you and others like DomainNamewire, elliotsblog, dotweekly, and so many more constantly reporting the latest news to DnJournal which are contributing in spreading the word, that this is a full loaded power house industry of hard working people deserves the fullest in respect.
Remembering back a few years this industry was all underground behind the door secrets. Thanks to all pro domainers teaching, showing and adding such high quality on information this market is only a spark away of lifting off outside of the domainer world.
Domainfest? TRAFFIC? and all others have been doing a great job. Now it’s time to change and readjust. Pointing out new terms like you did would be a great start.
The most important would be sending invitations NOT TO Corps or CEO’s , no, to medium sized businesses telling them they can have domains at wholesale prices. Well, 60 k for RodeoDrive.com might not exactly be seen as wholesale for someone outside this industry, but it would give them the insight of what is happening around the world. Millions of dollars changing hands for domains on a daily bases.
I think asking $ 1500 for a ticket at TRAFFIC Amsterdam and other shows is keeping the real money outside and preventing a much higher exposure to the real market which we all are trying to educate.
Mike,
Great insights as always. Thanks for sharing!
– Richard
Mike, great summary and suggestions.
1. Reserve auctions are really not auctions, they are just marketplaces offering domains for sale at a certain starting price.
2. As a domain broker, I won’t take domains that are crap or overpriced. Why bother? For a very low chance of a sale?
This wastes my time, my buyers’ time and ultimately lowers my value to them. When I put domains in front of my buyers I try to choose very unique opportunities, great domains and/or great prices.
Moniker should be doing the same with their auction listings. On the flip side, they never know who is going to show up for the auction and if two people want the same domain then a domain can really get bid up but that appears to be a real long shot these days.
So, I wouldn’t say $660k is a bad auction though.
Kevin
You bring up an excellent point that I should have added to my post.
Putting up the auction list just days before the auction allows NO time for promotion or advertising and most domainers I talked to hadn’t even looked at the list until lunch an hour before the auction.
I had lunch with Elliot, by the way a really great guy, and we were sitting at a table with a bunch of domainers right before the auction and none of them had even had time to look at the list.
So there we were together looking it over asking each other what we thought.
In any case its a horrible way to do an auction.
The list, final and done, needs to be out at least 2 full weeks before the auction so proper promotion can do done.
Kevin D.
I checked it out, but my wife was with me, and for some strange reason she wasn’t really down with me sitting in the grotto with a bunch of naked women.
Guys
To everyone else, flying home to South Florida today, so I won’t be around to answer your comments, but your comments, just like mine are extremely valuable and the one thing I’m taking home with me from the show, besides the outstanding playboy centerfold book Oversee was nice enough to give to some of us, is that we need to keep the lines of communication wide opened.
We all learn from each other and this moves the business forward.
All my best
Mike,
Just a suggestion but I also think it would be a good idea to chat with Monte about maybe having a few people like you, I or others added to the selection committee.
Not that we would be perfect either but the point is to add some domain buyers to the selection committee instead of just employees. I really have no idea who picks the names but a large part can not be handpicked by buyers – quality simply dictates that.
Some great names and some good ones for sure — but there could be so much more and its a win/win for everyone. The sellers with good names that never made it because of the 300 hundred .me (.stupid) names and the buyers who want to spend money on quality domains.
“The list, final and done, needs to be out at least 2 full weeks before the auction so proper promotion can do done.”
Agree completely. The deadline date for submission should be honored.
I had a domain under contract but the client went to Moniker two days before the auction and Moniker took it and the domain sold.
I did not get any commission.
Rob,
“The list, final and done, needs to be out at least 2 full weeks before the auction so proper promotion can do done.”
Funny thing is you can have a list of 90% of the names 3-4 weeks before the auction. Publish it – promote it – sell it.
Then add a supplement the day before – all auctions work like this and there is no reason a full list should not be available even longer than 2 weeks before an auction.
Ironically, this seems to be the same story every time so hopefully next time …..
@MHB
{I had lunch with Elliot, by the way a really great guy, and we were sitting at a table with a bunch of domainers right before the auction and none of them had even had time to look at the list} I was the one sitting next to your wife at that lunch table. Fly safely.
Some great points about the auction have been made.
Here are my thoughts…
Even though commissions were raised to 15% and promises were made to the sellers that the domains would be widely marketed to end users and domainers alike, I think we can all agree that did not happen in the slightest fashion.
The auction catalog… Excel format? This is 2009, not 1999… let’s get with the program. I don’t know about anyone else but that thing makes my eyes bleed just trying to sift through it.
Submissions… Think you can submit names and then go back into your account and add pertinent data later, such as stats and descriptions? HaHa.. think again… think “Black Hole”… that’s right, you can’t. So you try and find a support rep to help you… I doubt I have to even comment on how fruitless that is. I had one single word generic name rejected that makes over $1100/mo with a 6yr reserve – all because I couldn’t get back in to add that info… oh well.
Now, as for the names themselves… There really were some great values there and some others that may be overpriced for wholesale domainer to domainer pricing, that is true. But what if the promised marketing had actually been done beforehand and the names had been dutifully shopped out to the various end user industries? I read one account of there being less than 100 online bidders at the auction. Doubtful many of them were not domainers, huh?
Sure, times are tight and domainers are looking for bargains. That’s reasonable.
But not making any more than the bare minimum effort to garner attention, buzz, and excitement over this event? That’s something else entirely.
Good post Toonz.
Your points about the entire process being tedious
and antiquated ring true.
I find the whole auction thing a big turn off myself and feel that selling to domainers is a dying model.
The once healthy PPC revenues are a thing of the past and so is buying based on revenue.
The end user is the future to those who are creative enough to find the right eyeballs and stand a chance at making the most $$$.
I am pretty much done with wasting my time
with these industry wholesale auctions.
As an attender/bidder,
the auctions are just too long.
4 hours? Come on!
Let’s do 30-40 really great names
at great deals, and you’ll see
sales pick up.
I sat in for an hour and left
and came back 2 hours later and it wasn’t over yet.
It’s just too long to sit through.
Aron
Domainers have enough domains and are thinking about development, scaling back or working with what they have.
Domainers are generally not in expansion/speculation mode so yes, end user prospects are the future of domain sales.
You can go to my http://SellingToEndUsers.com page and read my process for selling to end users and give it a try yourself.
(Sorry for the self promotion but it’s a great process that I use and posted for other domainers to see and use.)
I’ll keep saying this: name selection! It’s partially true about beauty being in the eye of the beholder. That being said, I’m seeing only a few really nice quality domains in these auctions. Plenty of marginal quality domains.
When you couple marginal quality domains with higher reserves, you get what you got. Factor in the economy and all is clear.
From my vantage point, many high quality name holders are waiting out the depressed market. They’re selling the lower tiers from their portfolio, if at all.
XF
The auction length isn’t a problem, I mean the auctions that netted over $5 million and over $10 million were longer
From the look of the line-up, 95% of the domains are already .com. Why not expand to other channels such as .me, .mobi, .asia, and .travel? They offer value, especially if they are specific.
Remember that the first into a trend are the ones that make it ($$$) big time. Times are tough but the opportunity with alternative domains is with those that get in early.
Aj
5 .me and 5 .travel were offered at the live auction as was 1 .asia, of which only 1 hit over $10K and some did not even meet reserve