Here’s why NameMedia sells more of its own domains than clients’ domains.
Every once in a while I feel like going on a rant. So here goes.
There’s been a lot of talk on both my blog and others about NameMedia, which operates BuyDomains and AfternicDLS.
NameMedia owns its own portfolio of domains which it sells through its platform. It also allows other domain owners (i.e., you) to sell domains via its AfternicDLS system, which then syndicates through its sales network.
Here’s the issue people raise: when NameMedia used to report its weekly sales, most of the domains that sold were NameMedia’s own domains. Why was there not a proportionate number of customer domains selling?
I’ll tell you why. Because NameMedia has a disproportionate amount of reasonably priced and categorized domains for sale on its premium distribution network.
Priced (reasonably) and categorized
When you list with Afternic you have a choice of listing a price or as “make offer”. If you list an actual price your domain is much more likely to sell to an end user.
You can also categorize your domain. Domains that are categorized are 2.8 times more likely to sell than uncategorized listings.
So if you haven’t priced your domains and categorized them, you won’t sell nearly as many as NameMedia does. And if you don’t price your domains within the end-user sweet spot of under $5k (more like $1k-$2k), it will be even harder to sell.
Promotion Levels
You have three choices when it comes to selling your domains with NameMedia through AfternicDLS.
The first is Basic Distribution. This means your domains are just listed on Afternic.
I suspect that most people who complain about lack of success with AfternicDLS choose basic distribution and don’t price their domains.
There’s absolutely no way you can sell the same percentage of your domains on AfternicDLS as NameMedia does if this is how you’re listing your domains.
The second level is Expanded Distribution, which syndicates your listings to 20 partners. This is definitely a step up from basic listings, and all things being equal your domain on Expanded is three times as likely to sell as on Basic.
But the magic is in the third listing level, Premium Distribution. These domains also show up when people search for domains at Network Solutions and Register.com. More importantly, customers are able to buy the domains directly at those registrars and instantly get the domain in their account.
Domains listed in Premium Distribution have 18x the sales velocity of domains in Basic Distribution.
So let’s assume you have actually priced all of your domains reasonably and categorized them well. Let’s also assume your domains are comparable to NameMedia’s own portfolio and you have as many domains at the company owns. But you list them on Basic. NameMedia is still going to outsell you 18-to-1.
You’re really comparing apples to oranges if you gripe about that.
Now there’s only one advantage NameMedia has to you if you actually use the Premium level and all other factors are kept constant: NameMedia’s own domains are syndicated through the GoDaddy registration path. That is not currently an option for its customers (although you can do that directly with GoDaddy).
But isn’t there a salesperson conflict of interest?
This is a fair question. Wouldn’t NameMedia’s phone sales reps have an incentive to sell the company’s own domains rather than yours?
The answer is yes, only if you don’t price your domains correctly and list them at the Premium level.
Sales reps make the same commission selling one of your names as one of NameMedia’s. But let’s put yourself in a sales rep’s shoes.
Phone rings. Person is interested in two domains, one of which is a customer domain and one is the company’s own domain. I can quote the buyer a price on the NameMedia domain and sell it to them instantly, which is a big advantage for me as a salesperson. If the AfternicDLS customer has priced the domain, I can quote the price and sell it instantly only if it is priced and listed at Premium level.
Now the customer starts to bargain. Both domains are priced at $3,000 and the seller wants to spend $2,000. For the NameMedia domain I can run down the hall to my sales manager and see if he will let it go for $2,000.
I can’t do that with the client’s domain. Or can I? Actually, yes. If the client put a floor price on his listing, I can negotiate directly with the buyer without even contacting the seller.
So, in a nut shell, here’s how to get a NameMedia sales rep to sell your domain on part with its own:
-Price it reasonably
-Add a floor price
-Choose Premium Distribution so they can sell and transfer the domain immediately to the buyer
The bottom line
Have you ever purchased a product at Amazon.com that was sold by a third party? It’s interesting. Amazon actually lists its competitors and their prices next to the product. You can either buy it from Amazon or buy it from a partner and Amazon takes a commission. They don’t discriminate; if a third party seller offers it for less they’ll actually list the competitor above Amazon.com in the purchase options.
It’s the same thing here. If you compare apples to apples, NameMedia will sell the same proportion of your domains as it does its own.
I’ll leave you with one thought: if NameMedia sells so few client domains, why does it spend so much money courting domainers to sell on its system? Surely it should just cut domainers out of the picture and concentrate on selling its own domains. That would save a lot of hassles.
Hmm. I hope the tides never change so much that NameMedia considers doing that. That would be a big loss for domainers.
Tags: Afternic, buydomains, NameMedia
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