whoapiad space available here, contact us todayad space available here, contact us today

Domain Auction Marketing

January 25, 2010

Jamie Zoch has just written an interesting post on his blog with advice and some helpful pointers on submitting domain names to auctions.

I wanted to expand on the section he wrote on auction promotion. I think Jamie is very on target with what he says here:

“Many sellers assume that your domain name submitted for auction will be promoted by the auction company to buyers. Not just any buyers, the ones who you think would be the perfect buyers, end users. This doesn’t always happen. Keep in mind that you are likely paying at least a 10% commission. Is submitting your domain and just the fact that your domain is in the auction worth the 10% sales commission if it get’s that 1 bid and sells at your reserve?

If you submit a domain to auction, plan on doing some work on your end to promote your auction! If you are doing this anyway, why not just try and sell it yourself? That’s a good question because you also hold a lot more control.”

Here is what I will add to that. I agree that I don’t think the auctions do enough (if anything) for my liking to market individual domains to potential buyer/end-users. Of course as domain owners we would all like to see the opposite. However from a stricly business standpoint I have to say I’m on the fence about whether the ideal is really viable.

I’m tempted to say that one could argue that the primary role of the auction house is to provide the platform and promtote the auction itself as a whole. This would no doubt involve showcasing some of the top inventory, but that it may not necessarily make good business sense from their standpoint to run promotions on each item of inventory on an individual basis.

As a test I decided to try to run some numbers on the domains sold through Latona’s Domain Brokerage at the T.R.A.F.F.I.C Las Vegas auction just days ago. If anyone would like to see how I ran the calculations let me know. It got a bit complex and some of the factors were fuzzy and could easily vary (rate of pay for an employee, average time spent to market each domain, number of domains that did not sell but would have given additional promotion, etc.)

But in short, in order for it to be profitable according to my rough estimations the auction house would need to be able to realize a gross increase in the average sale price per domain of at least 100% (double). I think this number is even somewhat generous, in reality it might be as high as 200% (triple).

A New Idea

However I believe there are in fact other more interesting performance based options worth considering.

What if for example the auction house offered the option to have your individual lots marketed by them to end-users in return for a larger commission, say an additional 5% – 15% (20% – 30% overall commission as opposed to the standard 15%).

I know that at first glance this will make a lot of domainers grumble since the general feeling is that promoting your domains is something the auctions should already be doing anyway. So why would you want to pay them any extra for something they should already be doing?

But if my estimations are anywhere near correct its not likely that promotion of each domain at an individual level by the auctions will ever really be feasible, unless of course it were to be incentive-based as I’m suggesting.

Now would it be worth it to me as the domain owner to pay an additional 5% – 15% commission on top to get multiple, real end-user buyers into a potential bidding war over my domain at auction? I’d say most likely yea.

Here is yet another idea: What if there were a third-party marketing company that specialized in promoting your individual domain names at auction to prospective end-users in return for a commission on the net sale price of the domain? This would be the same in principle, as the first idea, except that this company would be acting independently of (or maybe in alliance with) the auction house.

By the way, I think this really could be a great opportunity to fill an empty niche in the domain industry.

I wanted to see if there was anyone out there already who might cater to this, so I Googled ‘auction marketing’ and I went ahead to contact a few of the companys to ask whether they had any knowledge of or experience with domain auctions and whether they would bite at this type of opportunity. I emailed over the weekend and as of today (Monday) have not heard anything back yet.

So what do you think? If the domain auction houses or another third-party offered an add-on service to market your domains at auction directly to end-user buyers in return for higher commission would you be willing?.

Previous post:

Next post: