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Domain Auctions – The Good, The Bad and the Ugly

Domain auctions are something the great majority of domainers participate in frequently. Many domain names that are expiring can be back ordered and won at subsequent auctions at places like Namejet, Snapnames and others. There are domain name auctions ending almost every minute at auction houses like GoDaddy, Sedo, Bido, Flippa, EBAY and many others. There are exciting domain name auctions that take place live at domain conferences like T.R.A.F.F.I.C. Some people like the thrill of being in an auction, whether it be live or just on-line, constantly refreshing the screen as the auction winds down to determine if they are the winner. Many domainers get involved in auctions, but some really have no intention on winning the name. They just want to participate, perhaps to have some insight into the final result. Lately, there are many great names that appear in domain auctions all of the time, making it a real exciting part of being in the domain name business at this time. However, like anything, there are some good things, some bad things and some down right ugly things associated with domain name auctions, depending on whether your a buyer or seller, and they are discussed here from my point of view.

domain auctions

Domain Auctions – The Good, The Bad and the Ugly

GoDaddy recently changed their auction rules by extending the time added to the ending of each auction, anytime there is a bidder in the last 5 minutes of the auction. They have been operating for quite some time with just a two minute time extension and then recently changed it to 10 minutes. Within 24 hours of making that change, due to an outpouring of complaints, they changed it to 5 minutes, where is currently stands now. Many auction houses do this, in hopes of driving up the bidding and perhaps e-mailing those that have been outbid with a warning so that they can revisit and perhaps provide a higher bid. Flippa adds an entire hour each time there is a bid within the last hour. Most buyers hate the time extensions for several reasons. Some domainers like to “snipe” names, providing a last second bid in hopes of winning the name, while not drawing attention to the name. Time extensions really don’t allow for “sniping” in its purest form. Domain buyers are also busy people and time extensions only eat more time that a domainer could be spending on many other things. If they like the name, they need to be active in the auction and if someone else likes it too, you can have a bidding war that can go on for hours. I find it crazy when those that know how the extensions work still wait until the trickling seconds to provide another bid, only wasting valuable time! Like most, as a buyer of domain names, I hate the time extensions for domain name auction bidding. On the other hand, as a seller of domain names, time extensions are awesome, especially when there is a bidding war for your name. Time extensions allow you some time to really hype up the ongoing bidding war by using social media, like Facebook or Twitter. Like I said earlier, many like the thrill of an auction and bidding wars provide the perception of demand, although it’s not really a perception, it’s realty at that point.

Not every auction platform has time extensions. A great example is EBAY. I have sniped many items from EBAY sellers by bidding at the last seconds, but also lost many items to somebody else doing the same thing. The majority of auction houses do have incremental bidding, which means that each bid are provided in certain pre-defined increments, so that someone is not constantly outbid by a penny. If they really want the item, they need to be willing to up the bid to at least next increment, which is always set before the auction begins. My favorite domain name auction feature is proxy bidding, which allows you to place the maximum amount you are willing to bid for a given domain name. The auction platform will then enter a bid on your behalf against other bidders in the smallest required increment and up to your set maximum amount. It is a great feature, especially for a part time domainer like me, because it let’s me do my day job and not have to closely follow the domain auctions as they are happening. I know what I’m willing to pay and I set that amount. If I get the name, I know I got a deal and know I can sell the name for a higher price. While its my favorite feature, I kick myself often, as I’ve lost many domain names by somebody winning the name for one bidding increment above my maximum bid. I always seem to grind my teeth when it happens, but one should always set limits and stick with your guns in the end. I don’t know about you, but I’m in this to make some money. If you watch any of the auction hunter shows out there, they all operate the same way. That’s why they are successful and have their own show! I wonder who will have the first reality domaining show?

domain auctions

A controversial point among domainers with domain name marketplaces like SEDO, 4.cn and others is that once a seller receives an offer on their domain name, they have the option to kick it into public domain auctions, where the bidders offered price is utilized as the reserve price for the domain auctions. After reading several threads on the subject within domain forums, it is apparent that some domainers really despise this practice. On the other hand, there are many sellers who love the idea, as it provides a chance to get the name into a public auction, where there are many more eyes and possibilities for a higher priced sale. A seller does need to be comfortable with the initial offer, however, because the auction results in a sale for at least that initially offered amount.

Another good and bad point about auctions, depending on if you are a buyer or a seller, are the reserves, which we’ve touched upon already. A seller can set a reserve price for their name at most auction houses, thereby insuring that they will get what they want for the domain name (at a minimum), assuming there are bidders for the name. Most auction houses charge an additional fee for setting a reserve and sometimes the fee is dependent on the reserve amount set.

Having participated in many many auctions over the years for a variety of different things, it is very apparent that the most ugly side of auctions is the non-paying high bidder. Nothing is more annoying that a high bidder backing out of the deal and not paying for what they have won, other than a seller not sending the merchandise because they feel the auction did not command enough money from the winning bidder. I’ve experienced both and neither will get you in a good mood. It is a real waste of time for the seller and/or buyer and is always a real loser for the auction house. The domaining industry is a small world and what comes around goes around. As such, think twice before backing out of a deal, whether a buyer or a seller, as your reputation will be tarnished and you’ll have a harder time getting deals done. Many domain forums and blogs have name and Shame posts, whether deadbeat buyers and sellers are called out and identified. You’ll never see me on these lists and I better not see yu either!

Thanks for checking out some of the good, the bad and the ugly associated with domain name auctions!

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domain auctions

Domain Auctions – The Good, The Bad and the Ugly

Domain Auctions – The Good, The Bad and the Ugly
Domain Auctions | Domain Auctions | domain Auctions | domain Auctions | Domain Auctions | Domain Auctions

Domain Name Appraisal Scam

Domain Name Appraisal Scam – Last year, after a month into domaining, I posted the following paragraphs at DNForum. The post has had over 2,000 views and I thought I should repost it here, as they guys are still at it and probably always will be!

Domain Name Appraisal Scam

Domain Name Appraisal Scam | Domain Name Appraisal Scam | Domain Name Appraisal Scam | Domain Name Appraisal Scam

Newbies – learn this first! – dont get taken by this old appraisal scam!!
NEWBIES PLEASE READ AND BEWARE – old timers have probably already seen this somewhere here before, but if not, here’s a chain of recent e-mails, going back, with the first here at the top.

begin

RE: SOULSACRAFICE.COM

Hello,

We noticed that you currently sell this domain (correct?).

We are interested in purchasing it. What is your desired price?

If you have other names for sale please email me your domains with prices, especially if you have financial, adult, Hosting and TV related names.

We are looking forward to doing business with you.

Regards,

Mark Reitman

CEO
Website Domain Hosting Inc

end

Domain Name Appraisal Scam

I responded with the following:

Hello there. Thank you for your inquiry regarding the above referenced
website. Unfortunately, this is one of several sites that I own that I’m
looking to develop.
I suppose I’d consider an offer if you are really interested.

I also have some adult and financial websites that I would entertain offers
for such as…
end

Domain Name Appraisal Scam | Domain Name Appraisal Scam | Domain Name Appraisal Scam | Domain Name Appraisal Scam

The next day, I got this response:

Vincent,

What do you think about 14,000 USD for your domain name?

Have you had your domain names evaluated in the past? I mean domain
appraisals. Without valuation we cannot be sure in the sale price. It’s very
important for me in terms of reselling too. But we must engage a valuation
company with REAL manual service. So I will only accept valuations from
independent sources I and my partners trust.

To avoid mistakes I asked domain experts about reputable appraisal
companies. Please check this blog with suggestions from other sellers and
buyers:
http://www.forum-windows-club.com/Archive/593842731.htm (note that the link no longer works)

Do you sell domain with a web site or just the name?

Domain without content is ok with me. Web site is not necessary.

If, for example, the valuation comes higher you can adjust your asking price
accordingly. It will be fair. I also hope you can give me 12% – 15%
discount.

After you send me the valuation via email (usually it takes 1-2 days to
obtain it) we’ll continue our negotiations.

What is your preferred payment method: Escrow.com, International wire
transfer, PayPal.com or something else?

Hope we can come to an agreement fast.

Looking forward to your reply.

end

Domain Name Appraisal Scam | Domain Name Appraisal Scam | Domain Name Appraisal Scam | Domain Name Appraisal Scam

That’s their scam – they entice you as a greedy domainer with a high $$$ offer, in hope that you’ll order the appraisal, for which he gets a commission or perhaps the whole thing. The scam blog he references points you in the direction of two appraisal companys, both scams themselves.

I responded back the following:
Hello again, I have not had the domain evaluated in the past via appraisal, although based on my experience, I no longer utilize or depend on appraisals, as I have sold domain names in the past for 50X what an appraisal had said, and I have also sold domain names that were sold for a very small fraction of what they were appraised at. A friend also recently order appraisals from two independent agencies and the difference was greater than $10,000.
At the end of the day, the domain is worth what somebody pays for it.
The domain does not currently have a website and exists as just the name at this time, parked at Sedo. As such, there is very little traffic to the site at this point, as it requires development and SEO.
With all that being said, I would accept $15,000 USD for the referenced domain name and would begin the transfer process as soon as funds have been cleared via my preferred payment method, Escrow.com. I’d also be agreeable to a potential discount/commission for you, if you secure the $15,000 price and assure that the deal is done in a timely and professional manner. Obviously you’d be paid when the transaction is finalized. Let me know if you accept and I will forward you my paypal information.

He responded with this:

As a seller you should provide me with an appraisal first. This is a reasonable practice.

I’ve found not all the appraisals are accurate. So I accept real manual appraisals from trusted sources only.

I don’t trust $14-$20 services. Nobody will do a research for $14. We need a real manual service.
As to the most known brands: the more orders the company gets, the less time they can afford to spend on each appraisal.

I wanted to use Afternic.com but looks like this company has a bad reputation. Afternic’s appraisal service has a lot of bad reviews.

I was told about manual research service from http://www.DomainMart.com. It costs – $200/hour.

Many experienced sellers suggested us http://www.AuthorizedAppraisal.com/ as a trustworthy manual service. They charge about 50 euros name not per hour. We’ve read only positive comments about them. And I have my own positive experience with this company
end

Domain Name Appraisal Scam | Domain Name Appraisal Scam | Domain Name Appraisal Scam | Domain Name Appraisal Scam

I responded with this and never heard back from him again:

How can I be sure this is not an appraisal scam? In fact, quick research on “authorized appraisal” indicates that they are associated with these scams. Additionally, the domain name itself is a pigeon shit typo domain name that is worth a handreg, IMO, but yet the offer was an astronomical amount. These folks prey on newbies, knowing they are naive and looking for a quick hit.

Sorry for the length here, but good lesson to be learned!

Domain Name Appraisal Scam | Domain Name Appraisal Scam | Domain Name Appraisal Scam | Domain Name Appraisal Scam

Domain Name Appraisal Scam

Domain Name Appraisal Scam

Domainers Need Thick Skin

Domainers Need Thick Skin

Newbies Learn this First! – Don’t get taken by the old appraisal scam!!

Appraisal Scam | Appraisal Scam | Appraisal Scam | Appraisal Scam | Appraisal Scam

Appraisal Scam

NEWBIES PLEASE READ AND BEWARE – Seasoned domainers have all encountered this before, or certainly have heard of it over the ears. Having read several domain forum posts over the last year from Newbie domainers, it is very apparent that the old appraisal scam is live and well. As such, while I’m not the first, I’ve decided to write a post about the appraisal scam in hopes of saving a newbie from giving their hard earned cash to these lowlife scammers.

As a new domainer, you must realize that when you purchase your first domain name(s), there are many people watching you. There are many tools and scripts that folks utilize to find and research purchasers of domain names. It doesn’t take long for them to figure out who is a newbie in this business and it’s like a cat spotting the mouse for the first time. Let’s face it, they are preying on newbies who do not know better and who are in a vulnerable position to easily get taken, becoming the prey.

How they operate is this. After a month or two of purchasing your domain name, assuming your Whois information is public (and it should be if you are trying to sell the domain name(s)), you will receive an e-mail similar to this:

RE: DOMAINNAME.COM

Hello,

We noticed that you currently sell this domain (correct?).

We are interested in purchasing it. What is your desired price?

If you have other names for sale please email me your domains with prices, especially if you have financial, adult, Hosting and TV related names.

We are looking forward to doing business with you.

Regards,

Mark Reitman

CEO
Website Domain Hosting Inc

end

Appraisal Scam | Appraisal Scam | Appraisal Scam | Appraisal Scam | Appraisal Scam

Typically, the newbie seller will get excited at such a quick inquiry and will either respond with a price or will creatively ask for an offer, if they’ve done their homework (you always will have negotiation power if you get an offer first, but loose it immediately if you provide a price).

Within a day or two, the newbie seller will then receive an e-mail similar to this.

Seller,

What do you think about 7,000 USD for your domain name?

Have you had your domain names evaluated in the past? I mean domain
appraisals. Without valuation we cannot be sure in the sale price. It’s very
important for me in terms of reselling too. But we must engage a valuation
company with REAL manual service. So I will only accept valuations from
independent sources I and my partners trust.

To avoid mistakes I asked domain experts about reputable appraisal
companies. Please check this blog with suggestions from other sellers and
buyers:
http://www.************.***

Do you sell domain with a web site or just the name?

Domain without content is ok with me. Web site is not necessary.

If, for example, the valuation comes higher you can adjust your asking price
accordingly. It will be fair. I also hope you can give me 12% – 15%
discount.

After you send me the valuation via email (usually it takes 1-2 days to
obtain it) we’ll continue our negotiations.

What is your preferred payment method: Escrow.com, International wire
transfer, PayPal.com or something else?

Hope we can come to an agreement fast.

Looking forward to your reply.

end

appraisal scam
Appraisal Scam | Appraisal Scam | Appraisal Scam | Appraisal Scam | Appraisal Scam

That’s their scam – they entice and excite you as a newbie domainer with a high $$$ offer, in hope that you’ll order the appraisal, for which he gets a commission or perhaps the whole thing if the appraisal company is also a scam (and likely is). The scam blog he references, will point you to a fake blog page, where two appraisal companies are discussed and recommended.

Be very sure that this is a scam. If someone wants to purchase your name, they will not ask you for an appraisal, period! Perhaps a prospective purchaser would have their own appraisal done, although the real worth of appraisals, in general, are not really worth much (that will be the subject of a future post). Bottom line, don’t fall for the appraisal scam!

Appraisal Scam

Appraisal Scam | Appraisal Scam | Appraisal Scam | Appraisal Scam | Appraisal Scam
Appraisal Scam

Newbie Domaining 6 Months In – Continued

Newbie Domaining

Newbie Domaining

Well, I guess I’m doing okay newbie domaining, as I’m finely gaining some traction selling names and VinsDomains was actually just listed in an article published by www.anticareer.com entitled “The Top 100 Places To Buy A Domain Name” – if you want to see it, start from the bottom. Regardless of where it appears, it is quite an honor to even be listed with the others on the list, since I’ve only been newbie domaining for a little over 6 months and only started to figure something out that worked for me over the last couple.

Anyway, those who are newbie domaining were recently called out in a thread on DNForum entitled “How Much Money Have You Lost Domaining”, when someone questioned “What happened to all the newbies? Did they just run away?”…and someone else answered “Newbies have a tendency to quit before they even get started.” On that note I chimed in with the following, and I thought I’d share it here with others who are newbie domaining:

“I’ll step-up as a Newbie and answer to that one. I started in February this year and made the same mistakes as most, purchasing a lot of crap that I certainly now regret. However, I’ve been able to sell several of those names on EBay to recoop my dough and make up for some others that will drop if they don’t sell by next Spring (although you’ll see them here in the $1 auction before they expire). In any event, I’ve learned some lessons quick by spending time here and there. I’ve learned to pick better quality names on the drop with age. Names that domainers and end users alike would likely want to buy. Names that aren’t on anybody’s list, thereby being the only bidder, thereby winning the name. I’ve sold seven names since I started doing that. The least I’ve made on a sale in a three month flip was 2.54 times more than I paid for it and up to 12.32 times far my best sale I’ve had so far. I’ve got two names at Sedo right now at auction JonWayne(.)com and HiFives(.com), both with bidders, and both which will bring me similar profits. While I have still spent more than I have made so far, I’m certainly making more money than any cheesy bank will pay me to hold it, I’m making new friends and creating another business, which as many know, has many other benefits…and with inventory still to sell!

I’m not trying to brag, but simply pointing out that it can be done and pass along what I’ve learned in a very short time.

newbie domaining
Newbie Domaining | Newbie Domaining | Newbie Domaining | Newbie Domaining | Newbie Domaining

1. No need to get greedy. I found domaining is like fishing, with the buyers being fish. There are many fish and many ponds. At the end of the day, fish don’t like flashy expensive lures as much as they like free worms, or at least cheaper ones. That how I always filled my stringer.

2. Do some work to get your names out there. So far, I’ve had sales here, Sedo, EBAY, through Twitter and through my website, although I’m trying in at least a half other dozens outlets too, including brokers, newsletters and other means discussed herein this forum.

3. The daily published lists are nice, and I do occasionally bid from them passing along some affiliate revenue to each of them, but do your own mining too! That’s where the uncontested gems are. As an example, over the last week, I picked up MrGun(.)com, ZinCity(.)com and MoonAcre(.)com, all registered in the 1990s, being the only bidder and using proceeds from my recent sales to fund the purchase. I guarantee I will sell those for a much higher price than I bought them, after I let them ferment for a little while at my registrar.

4. Do some SEO homework on your site and sites you develop. There’s a lot to learn, but it isn’t rocket science. You just need to learn something new everyday, which is why I’m dying to get some more posts from Adam at DNCollege – hint-hint. Anyway, within just a couple of months, I’ve been able to rank on page 1 of Google and more often than not position 1, for domain related keyword strings like Entertainment Domain Names For Sale for Vinsdomains and analytics tells me its delivering visitors. Not bad for a new hobby.

I could keep typing, but this is not my thread and not the topic of it either. Just thought I should defend us Newbies a little bit and share the love.”

While this is my thread and I could still keep typing about newbie domaining, learning is a process, and I’m still doing it everyday forever. While I’m also trying to teach what I learn, patience is a virtue! More to come soon – thanks for reading, sharing and I hope all is well!

Newbie Domaining

Newbie Domaining | Newbie Domaining | Newbie Domaining | Newbie Domaining | Newbie Domaining
Newbie Domaining
be sure to check out the first article, Newbie Domaining 6 Months In

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