Something stirring...

[Andrew Wright]

The auction lobby at Drop now has a button for "Secondary Market Auction" with the following text...

"NEW SECONDARY MARKET AUCTION PLATFORM COMING SOON.
A big thank you to both sellers and buyers in our recent Secondary Market Auctions.
Over the next few weeks the current auction platform will be undergoing a major overhaul. We have big plans for a brand new way of selling your .au domains! Until then, watch this space…"

While this looks like the text from the old auctions from 7 years ago, it appears that something might be happening...

 

[findtim]

it feels like a long time since we have had innovation.
tim

 

[Horshack]

A secondary market auction is great when people have realistic reserves or no reserve. Unfortunately, a quick look at the prices of some of the domains on Netfleet makes me think that it will be a waste of time. I guess that's why the drops are so popular.

 

[findtim]

i was looking at what they do on acorndomains.co.uk the other day, it just frustrated me, lists upon lists of names with no price just "make an offer".
to me thats a waste of time, at least have a starting point, get rid of tyre kickers and also start to know if your price is far to high to attract any offers.
also maybe look at a time frame? a list that has been filled and sitting @ for years because of unrealistic pricing eventually stops people looking IMO.
like a house with a for sale sign for a year !
tim

 

[Horshack]

Yep, there's no point having a big list of domains with ridiculous prices. People just look at a few, decide that it's a waste of time and move on.

 

[Andrew Wright]

A secondary market auction is great when people have realistic reserves or no reserve. Unfortunately, a quick look at the prices of some of the domains on Netfleet makes me think that it will be a waste of time. I guess that's why the drops are so popular.

Secondary Market Auctions are notoriously difficult. You have to convince sellers to list their domains with no or low reserves, and you have to get buyer's bums on seats to get the kind of bidder depth that will achieve prices that sellers will be happy with. There's a reason why Drop stopped running them...

 

[johno69]

You have to convince sellers to list their domains with no or low reserves, and you have to get buyer's bums on seats to get the kind of bidder depth that will achieve prices that sellers will be happy with.

And you have to make money from it all.

 

[findtim]

i think it was explained once on her that nf as an example get X% eg 7-8% for an aftermarket sale but a good drop bid they get everything but 20 bucks, thus why drops are worth more effort.
$80 commission on a $1000 aftermarket which is where most those domains sit but the sellers don't seem to think so! versus the same money/profit for a $100 drop bid which happens daily.

thats the struggle i see, no trying to be negative just realistic. sellers need to be more realistic imo as someone that has purchased domains rather then sold many, its always been hard to get the seller to see the real worth.

the best sellers for me have been the ones that see this, ned, geo, a few other dnt's and funnily OMG who were very sensible once they got to know you weren't a tyre kicker.

tim

 

[Andrew Wright]

And you have to make money from it all.

There is that, yes.

And as Tim has pointed out the margins on Secondary Market Auctions are wafer thin, compared to the drops. And as an added bonus, Secondary Market Auctions cannibalise the drop market as you are mainly targeting the same buyers.

 

[findtim]

mainly targeting the same buyers

i don't necessarily agree with that as i was pretty much in my verticals most the time so i had a focused view, so i would say aftermarket is an " active buy" and a drop is a "reactive buy "
tim

 

[Andrew Wright]

i don't necessarily agree with that as i was pretty much in my verticals most the time so i had a focused view, so i would say aftermarket is an " active buy" and a drop is a "reactive buy "
tim

But you were still buying auction and drops in the same venue (be that NF or Drop) yes? So you, previously a drop buyer, were now moving some of your funds to Aftermarket Auctions (with thinner margins for the operator etc)...

 

[findtim]

yes, but the point being i had 2 different buying processes, opportunity and need, so when a client would come to me for a specific purpose i'd look to domainers not wait for drops, thus the money was never going to drops, and visa versa.

by the same token it was good for me to let a client know of a drop as i would end up with the dev for it.

i don't see them directly competing against each other for the same $
you know some of my purchases... they were never going to be on drops.

the margin to the operator wasn't my concern ever, i just looked at end price knowing everyone must make a profit for services to continue.

back to the original point of aftermarket, sellers need to learn 100% of nothing is nothing with ongoing holding costs, if the aftermarket operated is getting good sales volume because of realistic pricing then that service has a chance of continuing.

tim

 

[Andrew Wright]

i don't see them directly competing against each other for the same $
you know some of my purchases... they were never going to be on drops.
tim

How many domains did you buy in secondary market auctions?

 

[snoopy]

Very difficult area, buyers want to pay market value which is often only $20 for the better than average names whilst sellers expect some sort of "good result". It is really only a a way getting some fast cash.

Once you allow reserves etc it turns to crapsville where people spend time analysing names that probably won't even sell. Worth trying again but it is really going to need a lot of thought to get a model that works. How do you get sellers in the mood to just sell at any price?

Even in .com it barely works. When I am on Namejet I mostly ignore the names owned by private sellers.

 

[findtim]

How many domains did you buy in secondary market auctions?

none, i never bothered to go into a bid war of an owned domain, i never found a "buy it now" price i liked so i'd just contact the owner and negotiate, or if i couldn't find anything i'd send out emails to people asking if they had anything that may suit, or post i was looking on dnt for PM's

if the domain was listed online i never knew.

having said that i'd say i also failed to come to an agreed value 80% + of the time.
that was a combination of buyer budget and sellers over the top price.
i did often really push my clients to go up more .

tim

 

[snoopy]

if the aftermarket operated is getting good sales volume because of realistic pricing then that service has a chance of continuing.

I think this is it, realistically nobody wants to sell for that realistic price. I suspect most buyers would value an aftermarket name lower than the same name on the drops, so are people happy to sell at price x% lower than drop prices? For example if I own trust.com.au or diy.com.au am I happy if I get 4k on a no reserve auction? If I own bnb.com.au am I ok with $1000? Most of the people who have bought their names on the aftermarket/drops over the last 10 years are probably going to be taking a loss sending it to auction.

 

[Andrew Wright]

I think this is it, realistically nobody wants to sell for that realistic price. I suspect most buyers would value an aftermarket name lower than the same name on the drops, so are people happy to sell at price x% lower than drop prices? For example if I own trust.com.au or diy.com.au am I happy if I get 4k on a no reserve auction? If I own bnb.com.au am I ok with $1000? Most of the people who have bought their names on the aftermarket/drops over the last 10 years are probably going to be taking a loss sending it to auction.

Exactly this. Weird but true. People pay more on the drops. Go figure.

 

[findtim]

didn't NF once put aftermarket mixed into drops?

 

[snoopy]

Exactly this. Weird but true. People pay more on the drops. Go figure.

In my view it is logical for several different reasons.

For example, I see a good .com.au dropping, it was registered with MelbourneIT. That is a virgin name. It is not something a domainer has held for years then decided to dump. The previous owner was likely an enduser (good sign) and they likely took no notice of people trying to buy it (good aswell), indeed it probably looked like it was not for sale. There is potentially pent up demand on a genuinely good name from people who had to register 2nd rate alternatives.

Compare that with an aftermarket name owned by a domainer, the reason why they are likely selling it because it gets low levels of inquiries and they can't sell it, it is anything but virgin.

The other issue is of course on the drops the seller doesn't muck around, the name is just going to sell, in that situation the name is worth more because the bidders aren't having to research domains that the seller won't even let go of at market value. That time wasted has a dollar value and it effects the price of the names that do actually sell. So the more names that don't sell on an auction system, the lower the average price of the names that do sell.

 

[findtim]

That time wasted has a dollar value

exactly, and i am passively looking for a domain right now for myself, i've emailed a few people and my first sentence is "hi, i'm tyre-kicking, no hurry, when you get a chance can you look if you have anything...................."
this way they know where i'm at.
otherwise i would say " i've got a client and we are buying now for a domain..........."
just got to respect peoples time.

drops the seller doesn't muck around

yes, but back to my original statement, drop is "reactive" the 2(3) systems of purchasing are completely different and have nothing to do with each other imo.
1) drop
2) aftermarket
3) find and offer

tim