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.)