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Bido Reinstates Reserve Pricing (with a Catch)

Auction platform allows reserve priced domain listings, but there’s a fee if they don’t sell.

In an effort to establish confidence with sellers and bring more premium inventory to its platform, Bido is allowing sellers to set reserve prices on their domain names.

Part of my prediction was correct – you’ll pay a fee if you list a domain with a reserve that doesn’t sell.

If Bido selects a domain you submit with a reserve, you’ll pay a listing fee of 3% of the reserve price. If the domain sells, this fee is refunded. If the domain doesn’t sell, Bido keeps the fee.

I like this idea, and hope other auction houses consider some variant of financial incentives to limit submissions.

It will be interesting to see how the Bido buyer community responds to reserve auctions. When Bido launched the first time it didn’t have reserve prices, but Bido made a “guarantee” to the seller that the domain would sell for a certain price. This effectively set a reserve price because Bido was able to make one bid if the domain wasn’t close to the guarantee price.

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Comments

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  1. Sahar Sarid

    Thanks guys. The paint isn’t dry yet and we are already working on the next major release, a new offering that again pushes the boundaries further. In addition to this and the next offering, we do plan on opening the platform to the masses, hopefully this year.

    Cheers

    Sahar

  2. David J Castello

    There should be a cap on the listing fee.

    For one, Bido is only going to auction names with a reserve that they believe can sell at that reserve. There are plenty of viable 100K names out there, but the market may not be there on that particular day and getting hit with a $3,000 fee would be rough.

  3. Lda

    It’s not enough for an auction house to simply set up a selling vehicle and then take in fees.

    Sahar has an outrageous penchant for blaming the seller for failures to sell, when in fact his auction house doesn’t seem to understand marketing fundamentals or its obligations to effectively market their inventory widely.

    He constantly misses the point that an auction house must provide sellers with a rich environment of willing buyers. He seems to think that the sellers are responsible for this.

    If an auction house cannot attract buyers for any reason, including their own inexperience in marketing, then they should not be surprised when sellers avoid them.

    I’ve previously noted that it’s only a matter of time before heavy hitters (like Murdoch et. al.) see the synergy between their established media coverage and other money streams such as auctions.

    With their saturation marketing potential at low or zero internal costs, if they do it effectively, all previous players would probably wither, even perhaps eBay.

  4. M. Menius

    Allowing a reserve is a positive and necessary step in order to attract good quality domains. And good quality domains are the ONLY thing which allow Bido’s unique concept to expand outward. To the larger business community, higher tiers, bigger buyers.

  5. Steve M

    I like David’s fee cap idea; I’d think a $500 max or so should be enough to bring in some worthwhile inventory from serious sellers.

  6. Sahar Sarid

    Thanks for the suggestion, we will explore this further later. For now, we’re focusing on making it work and initial response seems to be positive. I suggest if you have an issue with higher reserve amounts just submit to where you are comfortable, say up to 15K reserve range.

    Cheers

    Sahar

  7. Anil

    When a featured domain name is not sold on an auction house, there could be one of following two reasons.

    1. There are no buyers OR good buyers at the auction house.
    2. Reserve price is too high.

    Which one comes first. Obviously 1 above as for an auction with no reserve wouldn’t get a buyer if auction house has not marketed themselves enough that on that particular day there is no buyer watching an auction.

    Therefore penalizing sellers with reserve price is just like pushing your responsibility on to the seller.

    -Anil

  8. Sahar Sarid

    Anil,

    We do believe the responsibility to market falls on both the seller and us. I wrote more about it here under “best practices”:

    http://www.conceptualist.com/2009/03/17/best-practices-your-domain-is-now-on-bido-now-what/

    When we listed three letter .com domains with no reserve (we still do, one of them is today) the market, every single time I might add, came forward and paid what is *acceptable market prices* for those domains, in comparison to what they go on other auction houses and message boards. That tells us the market comes through when domains are priced accurately. I wrote a series of articles about accurate pricing on my blog, http://www.conceptualist.com/2009/03/11/the-importance-of-accurate-pricing-part-viii-guest-post-by-darren-cleveland-rmg-ceo/

    Comments, feedback most welcome, as always.

    Cheers

    Sahar

  9. nr

    No offense but IMO I think this is a bad idea. Bido.com was different from any other auction places out there including ebay because they had no reserves. Now they will be just like all the rest and not something unique.

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