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.
We have discussed this before and even in good economic times it better be a really good domain to sell for over $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.
Posted under Domain Parking, Domain Registrars, Domain Sales, Domain Services
This post was written by Andrew on January 30, 2009
