First, let me say that I was all too pleased that a live domain auction came to my little town of Seattle, where Microsoft has just recently dipped their toe into the registration industry through their Office Live offering.
I attended the auction live for the first 3 or 4 hours (I believe they were nearly to the 200th domain on the list) , and then caught the remaining bidding online.
Jay has seen a lot of blog press recently, and I wanted to summarize here some of that feedback as well as my own thoughts on how it could have been made just a tad more profitable.
1. Attract rich people.
Although Invention.com ($500k) , and Rebates.com ($1 million) sales were exciting to watch, there appeared to be only 2 bidders (from where I was sitting) that came to the auction specifically for those domains. Why is an auction necessary if you can’t generate enough public interest to make the hassle of a public auction worth it for the seller?
2. Talk Revenue.
Don’t ignore the revenue and business models of the domain’s site. There was only casual mention of a handful of sites’ revenues, and even those mentions were made as an after thought after the bidding had begun.
3. Don’t spend more on catering than on the auctioneer.
To add some additional clarity to that rather harsh statement, don’t hire one who is apparently more accustomed to auctioning used cars than domains. Promoting domain metrics with phrases such as “look at the google on that one’ doesn’t give a seller much of a comfort level that there was due diligence paid to the promotion of their precious domain.
4. Don’t take your online bidders for granted.
Do a dry run of the live auction system, and give those poor people some time to actually bid. There just may be some online bidders that are trying to bid up the house, and calling the auction based on house interest is going to guarantee that you just reduced your net. There was much positive feedback about the online auction, but I saw it from both ends and from my perspective, the online bidders were at a disadvantage. I don’t have the stats, but although there were 4 times the number of people bidding online than those in the house, the house appeared to me to have won most of the bidding wars.
5. Don’t attach a lot of importance to Sedo’s ‘most wanted domain’ list, and ‘approval ratings’ gained from surfers’ assessment of a domain’s worth.
LoveStories.com supposedly got a 85% approval rating, and was ‘#19 on Sedo’s Most Wanted Domain list’ , yet it received not a single bid. The only thing that matters is bidders. The number and quality of bidders. Thats it. If you can’t get someone to raise a paddle or type in a bid and press ’submit’, the name is worthless.
6. Make the live chat open to active bidders and sellers only.
7. Limit the number of domains that one person can submit.
Are (6) domains similar to ‘<your_city_name_here>Housing.com really needed? You mean there were nothing else that qualified that would have brought in more than the 7K+ (combined) that these did?
8. Be cautious about encouraging low reserves.
Instead, place those efforts into recruiting higher quality domains and more sophisticated sellers that are grounded in the realities of the market.
Nearly half of the 157 sold domains sold for reserve, meaning they had one bidder who submitted the minimum price. Besides an indication of either low quality domains or low public interest, or both, a seller who cut their reserve has no reason to do so in the future, and little reason to stay with the same auction house.
9. Provide venue and category specific offerings.
ManhattanPersonals.com, CanadaBeer.com, and HollywoodHousing.com are not only geographically diverse, but are category diverse and are unlikely to draw enough interest to drive any one of these much more than reserve. In the cases of these 3, none of them sold.
10 . Increase bid increments.
$50 increments can mean lots of bidding, lots of wasted time, smaller result. Jay is talking $100 increments next time. I’d like to see $500 increments.
For Jay Westerdal official auction results, see his blog
