New AU Domain Auction Platform Required?

[Chris.C]

I was just wondering what people's thoughts were in regards to if they think there is a gap in the market for a low cost AU secondary market domain auction platform?

I'm mainly asking because I'm potentially looking at scratching my own itch here and I was wondering if there were any people in a similar boat.

I often purchase domains that after 18 months I realise I'm not likely to take any action on (development wise) and given that they are coming up for renewal I see them as the sorts of domains that if I could get $20 - $100 to just recoup my costs I'd take it rather than outlay another $20 in renewal fees for a domain that doesn't really suit my business model.

At the same time the domains aren't of the super high quality that I would be certain they would get bids if they were placed on the Net Fleet secondary market auctions (which costs $5 just to list the domain plus commission).

So for these sorts of domains I'd need a platform where you could list them for free but would be happy paying a higher commission and I'd even be happy to have listed with no reserve.

So would anyone else use a service like regularly if it was available?

 

[snoopy]

I think sellers would like the idea but I think there would likely be minimal demand with buyers for this kind of service.

For names registered 1-2 years ago what is the value of that name going to be after $50 transfer fees are subtracted out? (plus all the paperwork involved in the transfer). It is probably $0 on 99% of names so sites like this just end out with lots of listings and no action. Even in the .com space where transfers are free and simple none of these types of venues have worked out (it has been tried many times, sometimes with significant funding, probably bido is the best example).

 

[payattention]

I think a free option would be terrible as it would only make sorting through the junk even more difficult.

 

[snoopy]

I think a free option would be terrible as it would only make sorting through the junk even more difficult.

I don't think anyone would pay to list a name thy were going to drop though.

 

[Drop.com.au]

We tried something similar with close to expiring inventory in our Secondary Market Auctions a while back and it wasn't a success.

 

[neddy]

For names registered 1-2 years ago what is the value of that name going to be after $50 transfer fees are subtracted out?

This is so right. Until COR fees come down, low value names are always going to be difficult to sell.

 

[Chris.C]

I think a free option would be terrible as it would only make sorting through the junk even more difficult.

Over 1000 domains expiry everyday and we sort through the junk - it's not that hard.

Obviously some filters would be required.

I think sellers would like the idea but I think there would likely be minimal demand with buyers for this kind of service.

For names registered 1-2 years ago what is the value of that name going to be after $50 transfer fees are subtracted out?

I guess it depends who the buyer is.

But if a domain is going to get bids at the expiry auctions (where winning a domain also comes with a registration fee of approximately $50) then I guess those who want the domain and are willing to bid on the domain at the expiry auctions will still be semi interested in buying the domain in the secondary market.

My sense is that the two main players in the expiry auctions (Net Fleet and Drop) probably have limited incentive to run such auctions because they end up auctioning the domains on their expiry auctions in the long run anyway for which they earn registration fees and bid prices (rather than the former domain owner).

Please note, I'm not having a go at them for this, I completely understand their position.

That said I look at a service like DROP with their COR and think that if they list 200 domains a week and only 5% sell, that's still $500 in COR fees plus commissions (and they may even get recurring domains renewals in the future as well).

If something like this got traction and you could automate it and increase the volume of domains auctioned weekly it may well become a bigger earner.

(plus all the paperwork involved in the transfer).

Drop's COR is pretty easy and simple (and paperless).

It is probably $0 on 99% of names so sites like this just end out with lots of listings and no action.

Yeah but the same thing happens every day on the expiry auctions.

There is nothing lost by listing domains that don't get bids.

Even in the .com space where transfers are free and simple none of these types of venues have worked out (it has been tried many times, sometimes with significant funding, probably bido is the best example).

Yeah but why don't they work?

We tried something similar with close to expiring inventory in our Secondary Market Auctions a while back and it wasn't a success.

Why didn't it work?

And what did you guys need for it to be a success?

 

[Drop.com.au]

Why didn't it work?

And what did you guys need for it to be a success?

Hi Chris,

There wasn’t a lot of take up, prices were low, as was volume – impacting any commission that could potentially be earned. To be candid, the ROI made it uneconomic to run.

Andrew

 

[Shane]

Most decent domains bought at the expiry auctions are probably not intentionally dropped, and the ones that are intentionally dropped would rarely get any bids higher than $1.

Obviously there will be exceptions, but I think that's a fair assumption.

On that basis, a system of auctioning these types of domains would probably just fill up with rubbish that's not worth looking at, and the minuscule commission on any small sales wouldn't make it economical to run anyway.

If you think a domain is worth more than $100 then stick it on the Netfleet aftermarket auction. If you think it's worth less, then you can always post it on the forums for sale or "free to good home".

 

[Drop.com.au]

Most decent domains bought at the expiry auctions are probably not intentionally dropped, and the ones that are intentionally dropped would rarely get any bids higher than $1.

Obviously there will be exceptions, but I think that's a fair assumption.

On that basis, a system of auctioning these types of domains would probably just fill up with rubbish that's not worth looking at, and the minuscule commission on any small sales wouldn't make it economical to run anyway.

You're spot on.

 

[payattention]

Over 1000 domains expiry everyday and we sort through the junk - it's not that hard.

Fine, it's time consuming which doesn't make it difficult but it's synonymous IMO.

 

[snoopy]

Over 1000 domains expiry everyday and we sort through the junk - it's not that hard.

Obviously some filters would be required.

I guess it depends who the buyer is.

But if a domain is going to get bids at the expiry auctions (where winning a domain also comes with a registration fee of approximately $50) then I guess those who want the domain and are willing to bid on the domain at the expiry auctions will still be semi interested in buying the domain in the secondary market.

My sense is that the two main players in the expiry auctions (Net Fleet and Drop) probably have limited incentive to run such auctions because they end up auctioning the domains on their expiry auctions in the long run anyway for which they earn registration fees and bid prices (rather than the former domain owner).

Please note, I'm not having a go at them for this, I completely understand their position.

That said I look at a service like DROP with their COR and think that if they list 200 domains a week and only 5% sell, that's still $500 in COR fees plus commissions (and they may even get recurring domains renewals in the future as well).

If something like this got traction and you could automate it and increase the volume of domains auctioned weekly it may well become a bigger earner.

Drop's COR is pretty easy and simple (and paperless).


Yeah but the same thing happens every day on the expiry auctions.

There is nothing lost by listing domains that don't get bids.

Yeah but why don't they work?

Why didn't it work?

And what did you guys need for it to be a success?

You've still got red tape though, the names won't all be registered at drop, in fact most won't, it is going to be more an expensive and time consuming than a drop auction.

"But if a domain is going to get bids at the expiry auctions"

How many of those names were registered a year or two ago though and deliberately dropped? The names that are worth something are old names, most likely where the expiry was an error by the owner.

As it is now the Australian drop market is not exactly a goldmine.

Here is drop's best catches for the last 7 days,

TOP 10 last 7 days (44% caught) Sold
Pitch.com.au $255
PetInfo.com.au $77
OrganicAndNatural.com.au $56
MelbourneWeddingFlowers.com.au $50
TravellersGuide.com.au $46
DateNight.com.au $21
MilKit.com.au $12
CreditCardHunter.com.au $12
PoolFencingPerth.com.au $6
Rekindle.com.au $6

Now imagine a market 5% the size of that, except with higher transactions costs and levels of red tap, that is the market we are talking about in my view. I think the amount of money to be made is literally the price of a couple of beers each day, good luck to anyone who takes that on.