This is part two of Domain Name Wire’s “Selling Domains” series.

Domain aftermarkets, also called domain exchanges, are very active sites for buying and selling domain names. In this article I will discuss the largest aftermarkets and strategies for selling your domains on these sites.

The two largest aftermarkets are Afternic and Sedo.

Afternic has a storied history that can be split into three parts. First, it was a startup that revolutionized the way domains were bought and sold. Then it was bought by Register.com during the dot.com glory days. In 2000 Register.com paid $45M for the company, including $35M in stock and $10M in cash. After the crash Register.com effectively closed down the service and sold the domain to an outfit that operated as “NameBuySell” in 2002. The new Afternic was born.

Sedo, an acronym for “search engine for domains”, was founded in 2001. The aftermarket boasts more than 300,000 members, 5,000,000 domains, and handles over $3M domain transactions in a typical month. The company has offices in the US and Germany and is particularly adept at selling non-english and country code domains.

Fees. Both exchanges have similar fee structures. They charge a 10% fee for selling your domains but do not charge a listing fee. They also have minimum transaction fees. Afternic has a $60 minimum whereas Sedo has a $50 minimum (on most domains). So if you sell a domain for $150 you end up paying more than 10%. Sedo doesn’t have a minimum fee if the domain was parked using its domain parking program. In addition to handling the listing and promotion of your domains both companies also provide an escrow service to protect both the buyer and seller.

Listing procedures. You can upload your domains one by one or bulk upload through a spreadsheet. If you have more than 50 domains I highly recommend using the bulk upload tools. Click here to view a complete tutorial for bulk uploading at Afternic. Sedo allows listings of all types, while Afternic does not accept listings for adult and gambling domains. Both services offer featured listings for an added fee. I’ve had success with Afternic’s featured listings service. I have not sold any domains using Sedo’s featured listings but have only listed a few featured domains there. One of the domains I listed received offers, but none that were high enough.

Sales process. Afternic listings have a minimum offer and optional reserve and asking prices. For example, consider a domain with a $500 minimum offer, $1,000 reserve, and $1,500 asking price. If a buyer is interested in the domain they must make a $500 offer. But this doesn’t mean the seller will sell the domain for $500. If the buyer offers $1,000 then the reserve will be met and the seller agrees to sell it to the highest bidder in a 7 day auction. If the buyer offers $1,500 then the sale will immediately conclude and the domain will not enter an auction.

One strategy for Afternic sellers is to offer a reasonable minimum offer price. The seller will let the domain go for this price, but would like to get more. If a buyer offers the minimum then the seller can change the reserve to that minimum. This effectively says “I’ll sell it for this price or the best offer”. The domain is then sent to auction for 7 days. Listings at auction get premium exposure. To see the value of sending a domain to auction, consider the case of ThreePieceSuits.com. The seller triggered the reserve at $75, a low price for this domain. The domain was sent to auction and, thanks to the premium exposure it received in the auction section on the Afternic home page, received 40 bids before closing for $815. (I won the auction!)

Afternic lets you choose the capitalization of your listings. I highly recommend capitalizing the initial letter of each word in your domains, but not all of the letters. For example, ThreePieceSuits.com is better than THREEPIECESUITS.COM or threepiecesuits.com.

Sedo works a bit differently than Afternic, although the company recently added an auction process to its system. Domains are listed with an expected price or “make offer”. Most sellers don’t have an asking price and just list the domains as “make offer”. In the past Sedo had an offer/counter-offer system. A buyer made an offer on a domain and the seller could either except the offer or enter a counter-offer. This could be tedious. You might go back and forth several times and still not close a sale. Sedo’s new auction system is similar to Afternic. Once the seller gets an offer that is acceptable, he can send the domain to auction where it gets premium exposure.

Sedo’s auctions are receiving rave reviews. Much like Afternic, domains sent to auction usually appreciate thanks to added exposure. For example, W2.com recently entered auction at $12,000 and sold for $31,000. Students.com entered at 3,000 EUR and sold for 17,500 EUR. I’m amazed at some of the sale prices Sedo is achieving with this new format. It’s debatable whether this is best for buyers, but it’s definitely generating results for sellers.

Other aftermarkets. There are two other aftermarkets worth mentioning. One is GoDaddy’s TDNAM (The Domain Name Aftermarket). TDNAM was set up by GoDaddy as a way to sell expiring domains, but domainers can list domains on the service. Unfortunately TDNAM seems to be used mostly by novice domainers that have unrealistic expectations. Many sub-par (and even horrible) domains have 6 figure asking prices. Hopefully this will change in the future; domain company Fabulous announced it will list domains on the service. Also, TDNAM doesn’t do a good job policing its listings. The one-word category has a number of domains that aren’t one word by any stretch of the imagination.

Another option is Moniker’s new MarketplacePro. This service launched in October and it’s too early to tell if it will become a viable contender.

Final word. It’s important to realize that most buyers on aftermarkets are domain investors. They’re looking to buy domains at wholesale or discounted prices with the hopes of earning pay-per-click revenue and flipping the domains to another buyer in the future. Hopefully more end-users — buyers that typically place a high value on great domains — will use these services in the future.

(note: both Afternic and Sedo are sponsors of Domain Name Wire.)

Domain registrar GoDaddy is now sending out “cancellation confirmation” notices when users transfer their domains to other registrars.

When a domain owner receives a message that one of his domains has been cancelled, he certainly takes notice. GoDaddy has sent “cancellation confirmation” e-mails for a while when users cancel a domain registration or a service associated with a domain name.

But now the company is sending out the same notice when customers transfer their domains to other registrars. The notice is as follows:

*****************************
ITEM CANCELLATION CONFIRMATION
*****************************

Dear Andrew,

Per your request, the items listed below have been cancelled from your account:

.COM Domain Name Registration – 1 Year: DOMAIN.COM

If you feel this cancellation has occurred in error or you need further assistance, our support staff is available 24 hours a day, 7 days a week via:…

I’m not sure why GoDaddy decided to start sending these messages to customers for domain transfers. Perhaps the company is trying to get confused customers to call the support line about the cancellation. Every time a customer calls the company gets a chance for GoDaddy to sell more products.

The recent acquisition of BulkRegister by eNom created headaches for some BulkRegister customers. Are more acquisitions on the horizon?

Many years ago I used an online bank called CompuBank. It was a great internet-only bank that offered free free checking and billpay. When I sent deposits in by mail they posted the next day. It was great. But then a larger bank called NetBank acquired CompuBank. NetBank was horrible and botched the integration with CompuBank. My money was locked up without access for weeks and NetBank’s fees were higher. I pulled my money out as soon as I could, but the transition was a pain.

As registrar consolidation picks up steam you might experience similar pains. You probably have a couple registrars you prefer to use. You’re comfortable with their user interfaces, policies, and prices. What would happen if tomorrow your registrar was swallowed by a registrar you disliked?

A number of BulkRegister customers were frustrated by the recent acquisition by eNom. For the record, I’m a fan of eNom and I like how it operates. But not everyone thinks so. And it is certainly different from BulkRegister. For example, one BulkRegister customer wrote to Domain Name Wire complaining about a renewal for one of her domains. When domains came up for renewal at BulkRegister the company would automatically charge her credit card. eNom, on the other hand, uses a pay-in-advance model. You fund your account with a deposit which is then debited whenever you make a purchase. Although this works for some people, it was frustrating to this customer who was used to paying for each purchase.

There will be more registrar consolidation in the future. Moniker was purchased by an online media company in August, although it isn’t merging with another registrar so customers will not be affected. But as merger and acquisitions in this space heat up you can expect a few headaches.

Domain company Marchex is testing a domain parking service for non-Marchex owned domains and it appears they are monetizing trademark typos and adult names.

Domain company Marchex (NASDAQ: MCHX), famous for buying a $160M domain portfolio, is beta testing a domain parking program for non-Marchex domains. But the company isn’t doing a good job keeping trademark typos and adult names out of its beta, writes David Kesmodel. (David is an ex-WSJ.com writer who also contributes to Domain Name Wire.)

It’s no secret that domain parking companies monetize a number of trademark typos. But Marchex is a publicly traded company, which means it needs to be more concerned about infringing on trademarks. Kesmodel discovered that Marchex currently monetizes americannairlines.com and adobeacrobet.com, two obvious trademark domains of American Airlines and Adobe. Kesmodel contacted Marchex about the domains and was told that the company would look into it, but as of Monday morning the domains still resolved to Marchex parking pages.

Marchex general counsel Ethan Caldwell told David that “None of the parking services are deploying an army of trademark attorneys or manually previewing domains prior to entering them.” This isn’t a very good excuse, and it certainly isn’t true. Dotzup manually reviews all domains prior to including them in their results. But Caldwell is correct that most parking services don’t do a good job of screening for trademark typos. And even though Dotzup screens domains, it sometimes is overzealous and screens out domains that aren’t trademarks.

The issue of typo trademarks is gaining more momentum lately as large companies bypass UDRP arbitration proceedings and are suing domain owners.

Who’s responsibility is it to filter out trademarks? Is it the domain parking companies or the advertising services including Yahoo! and Google? Expect this topic to be a focus of attention as the domain industry becomes more mainstream in the coming years.

The registry responsible for managing the .eu domain announced that it is cutting the wholesale price of its domains in half.

The launch of the .eu domain earlier this year was a success in terms of the number of domains registered. It remains to be seen if the domain itself will take off and what the effects of extensive acquisitions by domain investors will be.

But now that the initial registration rush is over EURid, the registry in charge of managing the .eu domain, announced it is reducing its annual registration charge from 10 Euro to 5 Euro effective January 1. The new price is $6.41 USD at today’s exchange rate. This is roughly the wholesale price of .com domains, $6.25.

This price reflects the fee accredited registrars of the .eu domain must pay every time they register a domain on behalf of their clients. Registrars are allowed to charge any price and do not have to pass this cost savings on to customers. When .net wholesale prices were decreased very few registrars passed the savings on to customers. But don’t be surprised to see registrars cut prices on .eu now that registrations are slowing.

GoDaddy, the world’s largest registrar, currently charges $19.99 per year for .eu registrations.