Toxic.com which was auctioned off by NameJet.com on May 4th with a high bid of $56,566, is back at auction at NameJet.com after the bidder failed to pay for the domain.
The domain now is in a public auction, so even if you couldn’t participate in the first auction because you did not backorder it, now you can.
The current high bid is $34,677.
Namejet.com continues to see a bunch of unpaid domains coming back into auction, not just the large transaction domains but domains that sold for $79 even have come back in auction after the buyer defaulted.
We were notified this week that we had been entered into a public auction for the domain buildingyourwealth.com after the previous winning bidder couldn’t or simply chose not to come up with payment for his winning bid of $79.
Right now Namejet.com seems to be operating as a “free” bidding system; pay if you want or don’t.
If you want to bid on a domain, bid away, if you don’t pay for it, nothing happens to you. If you change your mind after the auction closes and don’t want the domain no problem, don’t pay for it.
Another high priced domain, Latham.com which sold for $30,300 on around April 25th went back to auction this week and sold for mere $11,100.
There are plenty of more example I can bore you with, I have one guy who writes me almost daily with domains that have not been paid for at Namejet.com, however there is no doubt that there are a lot of domains getting bids, but not getting paid for at Namejet.com
Unfortunately not paying for a domain does not stop you from bidding up other domains at the same time on auction at Namejet.com
We called for reforms to the Namejet.com platform back in March, however to date, no change of policy has been announced.
I’m sure all domainers would like to see a new system in place to protect the integrity of the auctions, especially since they seem to be auctioning off non-expring domains, like toxic.com
I read Rick Schwartz blog earlier “Business sucks for everyone except Hogan Shoes and Apple”.
It seems like Namejet is scared of putting up a “No drink allowed” sign in their shop. They would prefer to grin and bear it and use the pleasure of the successful deals to overcome the ones that fall through.
Hi Mike, Recently I received an email from Namejet telling me I could not have combined bids exceeding $2,500 until I became a certified bidder. I had been a Namejet customer for over a year and picked up a small amount of names, under 20 in that time. Never had a problem with payment or the service. I just assumed this was a new policy and all bidders needed to be certified to have combined bids exceeding $2,500. I followed the email link, signed a contract that bound me to pay even if my credit card on file refused the charge and signed my rights away to dispute any charge on my credit card with Namejet. Then I had to scan this along with a copy of my ID and send in for approval. The ID was a copy of my license and they said it was illegible, so they asked I scan the actual license which I did and sent in. The reply was the scan was too small and to increase the image size and re-submit. Did it and was certified. Was I an isolated case or do all people who bid over $2500 need to be certified?
This is a quote from this post:
“I’m sure all domainers would like to see a new system in place to protect the integrity of the auctions, especially since they seem to be auctioning off non-expiring domains, like toxic.com”
Could there be shill bidding going on? The owner of a non-expiring name sure has a lot of incentive and opportunity given the anonymous nature of on-line auctions.
I believe there are less defaults now on Namejet compared to a while back.
I think Namejet and Snapnames do a good job.
It is just easier to spot on Namejet because of the public tab.
Plus, a couple higher profile domains defaulted.
Sedo is probably the worst when it comes to no-pay bidders.
I wonder how many payment defaults occur with the domain conference auctions? (Traffic, Domainfest, Geo, Latona, Roundtable)
Considering the economy, our industry might have less payment defaults than other industries.
Alan
Interesting hearing about the requirements they placed on you.
Here is what I know.
Your suppose to put a credit card on file which they will bill each day for any purchases $4,999 or less per domain. Any domain $5k or over you must send in a wire.
However, for the $4,999 domains, it appears some people are getting billed for their purchases or being allowed to pay for them within some time period while others like me pay each day.
Now for your second comment.
Shill bidding is always a major concern when you see domains coming back into auction.
So far no one has found any evidence of this, however false bidding is almost just as bad which I classify as someone bidding on a domain which they either have no intention of buying or simply can’t afford.
In either case you have bids from people which aren’t really going to buy the domain driving the price up.
Either way it’s simply unacceptable
Domain
The issue isn’t just the defaults. Its the repeated defaults by the same bidder.
The problem is allowing a non-paying bidder to bid on other auctions until his outstanding auctions are paid for.
Why should you bid against someone on a domain, if they didn’t pay for their purchases from the previous week.
Why do some people get time to pay their bills and other have to pay daily?
Why are people allowed to default the second time?
These are the questions
This is a serious problem. Think of all the winning bidders whose bids were artificially driven way high by a competing bidder who had no intention, or ability, to pay in the first place, i.e. someone who would eventually default on their payment should they win.
For example, let’s say all bidders drop out at $20,000 except TWO remaining bidders (YOU & the other defaulting bidder). You eventually outbid him at $50,000. The truth is that if this insolvent bidder were not artificially driving up the price, you could have won the domain for $21,000, instead of $50,000.
Max
Exactly
yes but if you bid to 50k to get it, it was worth 50k to you…would be a good policy to think out each bid you make and say to yourself would I “pay” this much outright to purchase this domain?”
Tim
That is a whole different issue.
You should have to pay only $1 more than any other qualified bidder.
It would be nice if Namejet adopted the policy of TDNAM. If the high bidder defaults the domain is award to the second highest bidder, but at the bid no higher than would be needed to beat the third highest bidder. Here’s an example:
Bidder 3 wins at $4,000
bidder 2 lost at $3,900
bidder 1 dropped out at a bid of $700
If bidder 3 defaults, bidder 2 is offered the name at $750.
So in the case of Toxic.com here’s how it would work:
Yakazu won at $55,655
MrsJelloLLC lost at 55,555
li1o0xjlwcv01qt03qw6 dropped out at $20,600.
MrsJelloLLC should be offered the name for $20,700.
This would help curtail shill bidding and boy wouldn’t MrsJello be a happy domain owner.
I was going to throw out the there concept of failed shill bidding but it looks like I wasn’t the only one with the thought.
Alan’s concept is wrong for this reason:
let’s say FakeMe and RealMe drives a bid so high immediately after auction starts that nobody else will bid. FakeMe fails to pay, RealMe gets the domain cheap because there were nobody else bidding. So RealMe could get $10K domain for $79 because before anyone could be bidding I drove the price to $100K.
BUT if would be allowed to bid less than curent highest bid, this would work. I.e. if highest bid is $100K it still would be allowed to make $10K bid anyway – and it would solve all non-payment problems. Not necessary to repeat any auction ever again.
MB –
“The issue isn’t just the defaults. Its the repeated defaults by the same bidder.”
I don’t sell a lot of domains thru Sedo. But, I have 3 ‘pending’.
I received notice this morning 2 were cancelled –
“Transaction cancelled by Sedo
Based upon a review by our marketplace security team, we have felt it necessary to cancel this transaction”
(2 at the same time indicates it must have been the same buyer.)
Point being, there is a certain percentage of transactions that will fail.
There are 17 public auctions showing in my Namejet acct.
Toxic is the only high profile one.
Out of the 17 public auction domains, I speculate only 3 or 4 will eventually exceed $ 1,000.
Lets assume Namejet auctions off 1,500 domains a week.
I would be surprised if the default rate exceeds 2%.
It is probably less.
Normally, I would be the last person to defend Namejet but I believe they have started to put procedures in place over the past few months. Because, I notice a lot less in the public section. I remember when it was multi-page.
I agree that shill bidding increases the final cost to the legitimate bidder. But, that has been going on with all auctions for hundreds of years.
But, with Snapnames and Namejet displaying the screen name of the bidder probably reduces the percentage of shill bids.
Whereas, when you are bidding at a Traffic or Domainfest live auction, how do you know if they are legitimate bidders?
Furthermore, any bidder that defaults should have their account immediately closed whatever the venue. Legitimate bidders who pay as expected drive the entire system, and it’s a reasonable expectation that their time & investment is protected by the auction company.
Alan
Regarding your suggestion as to whom the domain should go to I blogged about this in my suggestions to NJ back in March.
There are three possible scenarios
My choice is that the second highest bidder should be offered the domain upon a default which would have been Mrs Jello in this case at the $34K figure. He had the second highest bid and no additional bidding should be required.
My second choice is that the domain the should be auctioned off again, but still in a closed auction, including only those that were eligible to bid in the first auction.
The third possibility is what we have now, placing the domain in a public auction.
This is by far the most unfair of the 3 possibilities. Because of the default, the bidders in the first auction, now have additional bidders to compete against, due to no fault of their own.
Domain Guy
Again the major problem is not that they are default bidders, to some extent you can’t prevent it. But you can prevent repeat default bidders. You can prevent bidders who haven’t paid for a domain to still bid in other auctions.
I can’t speak for TRAFFIC or DomainFest but I don’t think if you default in a bid at either auction they are going to let you do it again at the next auction
Plain and simple it is something NameJet has allowed to propgate. As far as comments relating to the ecomony having an effect – well just do not bid if you do not have the money – last time I check NameJet and these default bidders are not considered “troubled assets” and do not qualify for TARP.
Brian Wick
UPDATE
Looks like Mrs Jello, who was high bidder at $34K after the domain went back into auction, may have had enough of this nonsense as well, as his bid has been withdrawn.
The current high bid is just over $20K, with bidder by the user id of:
“li1o0xjlwcv01qt03qw6”, now holding the top spot
Can someone please help me?
If someone had a bid of $3,601 and then I put a $4,999 bid in, is there even a proxy system or is it all a sham?
ME: $4,999
THEM: $3,601
If it were to show up like this, doesn’t this mean that the “proxy” bid of the person I am bidding against $3,601, and shouldn’t the current bid be $3,701? Please help if possible..thanks. I am seeing so much non-payers and problems with this proxy system.
Dennis
If the high bid is $3,601 and you put in a proxy bid of $4,999, then the current bid will go $100 over the current bidders proxy bid.
So if the current high bidder only had a bid of $3,601 and you bid $4,999 you would be the high bidder at $3,701, however you could be instantly outbid if the current bidders proxy is higher than your of $4,999.
In any event the issue here is what if the guy who had the high bid of $3,601 had not paid for a previous auction and now your bidding against the non-paying bidder
And Dennis,
As I learned the expensive way a while back with enom/namejet (at least) – pre auction bidding does not use a proxy system – so if you put a bid in at $4999 when you back ordered – that is the bid at the open of the auction – even if the next highest bidder during the backorder process was 3601. This feature is heavily skewed toward the benefit of NameJet “bidding system” – as only during the pure drops does it have any value in determining how many resources NJ might use in trying to get it off thieer subscribing registrar connections – vs. pre-drop as in the case of all the NetSol domains and 3rd party submissions – and to be diplomatic at this point – it is only because of blogs like this where NJ will make any changes – as this stuff with toxic.com and even your issue has finally hit the top burner I feel.
eNom/Namejet is a very technical business and they will fix it though – likely most through software.
Brian Wick
Cheap Yellow Pages
Thanks for the replies. I hate their bidding system especially extending the auctions 5 minutes. I backordered a domain and it made it to private auction.. the bidder under me bid 3,601 and I (unfortunately) put $4,999. When I asked NJ, they said that the bidder had a proxy bid..well if that was true, wouldn’t their bid (under mine in the bid list) show up as $4,899 and not 3,601?
I am still going to pay, but it pisses me off that I put that bid instead of bidding in increments of $100. How many times do you think Toxic.com is going to be re-auctioned off? I’m going to say quite a few more times because not many people are willing to wire $20,000 and many of the bidders probably bid for no reason and did not intend to purchase, driving up the price for the winning bidder!
UPDATE
Toxic.com sold today on NameJet.com for $40,500 to the bidder by the name of “gymmic”
Hopefully this one will go through