Suppose the major marketplaces stopped showing sales results. How would that affect the domain industry? Keep reading …
The most conspicuous feature of expired domain sales for the past week is the complete absence of GoDaddy data. After downloading information for roughly a thousand auctions, I was surprised to see only mid-auction snapshots for upcoming items – meaning that there was not a single actual past auction result.
At first, I thought this might be due to a snag in my code; but it isn’t. Currently, the “Watching” tab at GoDaddy shows only listings that end in the future. Once the auctions have ended, it seems their records will vanish. Until now, data on past auctions was visible for a full week. (Raymond Hackney noticed this problem yesterday, as it turns out, although I didn’t notice that he’d noticed it until I began looking for confirmation.)
At this stage, I don’t know whether this represents a GoDaddy glitch or a systematic policy change. We’ll find out in a few days, once employees return from Christmas vacation. It would be unfair to leap to conclusions; so technical difficulties are the prudent assumption.
However, this raises an important question: How would we react were GoDaddy to turn off the lights on auction results? Compared to other expired domain market places, GoDaddy has been more transparent, allowing even non-bidders to track an auction. NameJet and DropCatch require a bid to view the outcomes. Meanwhile, other sites such as SnapNames and Pheenix keep auction results private. Even those bidding must be present in the final moments of an auction in order to learn its closing price.
We’re accustomed to seeing large retail sales reported by DNJournal and others. Yet it’s only below that $2,000 .COM reporting threshold that we’ll find most of the domain market’s wholesale activity. All of us rely on GoDaddy Auctions for evidence of what’s going on in today’s market, both because of the platform’s size and its transparency. That could go away.
Moreover, in the dark it’s easier to get away with murder. Ours is a largely unregulated industry. One of the few deterrents against fraud of various kinds is bright lighting. When auction results are published, they can be interrogated. So, for all these reasons, I hope GoDaddy will reverse its glitch / policy decision, as the case may be. If you feel likewise (or otherwise), please leave a comment.
This week, there’s nothing from GoDaddy. Nevertheless, we still have highlights from NameJet. These 15 sales are drawn from just a 5-day period since my last article:
|Domain Name||End $||Domain Name||End $|
I knew that VVVV.com ($22.1k) would be large sale, having previously sold LLLL.com myself. What can i say? V-V-V-Voom! Gambling domains frequently sell above what comparable names would fetch in other niches. RealCasino.com ($4.5k) is a case in point.
ChuanShen.com ($3k) is a common first and last name, although I’m not aware of any particularly famous Chuan Shen. MRCM.com ($1.2k) matches a .CA and an .EU site. Personally, I think HugeSaving.com ($517) sounds awkward without a final “s”. But I quite like the brand names Payola.com ($3.2k) and SkyRiver.com ($3.6k).
Speaking of market transparency and reported sales, Ron Jackson over at DNJournal acquired DomainNameJournal.com ($250).
I can tell you I had a sale via escrow in mid 5 figures, that if had been reported would have been sedo’s 1 sale this week, but I stopped using Sedo 3 years ago. Yes it was a .com. My guess company had excess in marketing budget, and I didn’t even bother to counter as it was that good.
Many sales you never know even occur. The industry is more robust than you think, but it is keen on quality, and not crap.
My only observation for 2014 is aftermarket prices are coming close to end users, you need to bid carefully, and know when to walk especially with schill bidders present at some exchanges.
Also end users are still shunning gtlds in favor of .com, not sure if that changes in 2015. When they come for options, I pitch them a gtld, and they reply we don’t want that, what do you have in .com.
GoDaddy has a BIG unaddressed shill bidding problem.
They have no bidder authentication process in place to stop scamming. It is so out of control I have pulled most of my money out of the platform.
There will always be shill bidding but to not be more aggressive than GoDaddy has only hurts bidders and lines GoDaddy’s pockets with gold.
They have been made aware of it for a very long time now, probably a year or more.
I did not make my main point. If they remove the auction results from the watchlist then we can’t keep good tabs on the fraud going on.
This is just another step in the wrong direction for GoDaddy.
Joseph Peterson says
Tankond you are right, I saw a domain sell for $1,000,000 last week to be pulled back to $1xx after they cleared out the schill bidders, even if everyone was assigned a random user # that stuck with them, these patterns could show who is legit, and who is playing with real money. I figure I have probably been bid up by many people who did not have the means to pay, actually I know I have by the amount of 2nd chance offers I have been presented when top bidder didn’t pay.
Paul Nicks says
Joseph, this is not a bug. We have been fielding complaints from auctions bidders that their sales data is being indexed and made readily available through the blogs. As GD Auctions is primarily a wholesale marketplace for expired inventory, having the final sales price available to everyone has a potential negative impact on resale value for the domain.
Above all else I need to pay attention to customer feedback and the feedback I’ve received lately has been overwhelmingly negative towards the practice of publishing wholesale sales data. So, we made the change to protect winning bid amounts.
Happy to field feedback on this or any other Auctions issues.
Joseph Peterson says
There are always competing factors to balance. In this case, I think GoDaddy is putting too much weight on a few people who complain and neglecting both the silent majority and the larger, long-term indirect benefits to the industry as a whole — which aren’t based on the misplaced anxieties of a few customers.
That’s a matter of opinion, but I hope it will be debated. Did GoDaddy undertake any industry surveys before deciding to change its policy unilaterally?
From my vantage point, this is the wrong decision for the industry and for domain resellers as a group, despite what a loud minority of them may think.
Whether it’s the right decision for GoDaddy, I can’t say for certain. But even if GoDaddy keeps some customers happy in the short term, it doesn’t follow that this is the right choice for GoDaddy’s interests or the customers’. Perhaps keeping sales data secret will inhibit the growth of the domain industry overall, making it appear less legitimate. And perhaps the absence of sales reports in the blogs will diminish buyer interest in the GoDaddy Auctions platform.
I understand a domain reseller’s worry, but as a domain investor myself I believe it’s mainly misplaced.
Merely because a domain is purchased for $100 or $1,000 in a short-term, wholesale environment is no argument against its long-term retail value being higher. Every domain is a unique commodity or asset, and its value depends only on its potential usage, its ultimate sales prospects, and the motivation of buyer and seller to do business with one another. What the previous owner paid for his property is utterly irrelevant.
We don’t go into a retail outlet and cry foul if the store has marked up the price of a shirt or a refrigerator or a painting. That’s the standard. Nobody questions it.
Any competent domainer can explain to buyers that a supply chain involves wholesale and retail components. That value is added by work performed researching acquisitions, listing / marketing wares for sale, negotiating with buyers, finalizing payments and transfers, and so forth.
Any competent domainer can explain that he buys undervalued assets and passes along savings to his retail buyer when he educates that buyer on ways to use the domain and sells the domain at a fair retail price, easily documented by referring to other sales.
Any competent domainer can point out that a painting is worth more once people begin taking more interest in it. Few Picassos were originally purchased for what they now sell for. The same applies to vintage automobiles.
Any competent domainer can explain that keeping domains in stock for resale is like maintaining a produce section at a grocery store. The cost of a carrot is higher because of the cost of replenishing carrots that go unpurchased. When I buy a carrot, I’m also buying the rotten carrot they threw away; and I’m buying gasoline for the truck that delivered it, electricity and rent for the building, minutes of labor from employees who put the carrot in front of me and ring me up at checkout, as well as bits of whatever advertising drew me in to the grocery store in the first place.
Any sensible human being who might buy a domain is familiar with this stuff. Sometimes they need to be reminded that it applies to the domain industry because they regard th domain market as alien or illegitimate. And we ought to remind them that domain prices are normal and fair and variable, just like everything else they buy. We ought to show them.
As long as domainers hide or demand secrecy, domainers and their industry will be regarded as sneaky cybersquatters. As long as end users are unaware of just how active the domain market is, they will undervalue ALL domains.
Why are some domainers afraid of explaining this difference between their wholesale cost and their retail asking price? Can they not justify themselves? Unless they secretly believe they’re cheating their buyers, they should have no hesitation to explain market realities in the clear light of day. This is a legitimate industry. Insofar as it is hidden, it appears illegitimate.
Invariably, I find myself complaining that the domain industry is stuck in adolescence. By now, it’s time for everybody in the domain industry to grow up and treat the market like any other market — with as much transparency as possible. That is the only way to attract end users. That is the only way to improve wholesale liquidity, by attracting more informed wholesale buyers. Mainstream businesses are accustomed to seeing what goods sell for in both a retail and wholesale setting. What established, legitimate industry would hide market prices? Does the auto industry? No. Does the housing industry? No. Is an antique gallery ashamed of marking up prices? No.
We need better informed buyers. In addition to selling domains and fielding the usual variety of naïve inquiries as a domain owner, I also work with clients who are seeking domains or entering into negotiations already for a particular domain. I know how buyers really think.
An ignorant buyer supposes that every domain is worth $10 or $100 at most. Showing this person that even wholesale prices constantly rise into the high hundreds, thousands, or even higher amounts can only HELP educate those uninformed buyers.
More experienced end-user buyers not only realize that domains can be worth significant amount of money. They also understand that they’ll usually face asking prices above what the owner paid. This makes sense to everybody, and there’s no real reason for domainer anxiety about it.
Either a buyer is contacting someone out of the blue and asking that owner to relinquish his property, in which case mere courtesy dictates that a premium ought to be paid. We don’t knock on someone’s door and ask them to sell us their furniture at cost!
Or else the buyer has been contacted by the domain owner who is offering to sell something. In that case, any potential buyer should understand that extra time, labor, and risk has gone into the process, which must justifiably be added to the asking price.
A domainer risks money by tying it up in an asset that may not sell. He spends time researching, contacting, educating, and helping not only this single potential buyer … but multiple other potential buyers for that domain … and even more people for unrelated domains that turn out not to sell. Often subscription services add to a domainr’s business cost as well. This time, effort, cost, and risk deserve to be recompensed.
So what if a domainer purchased the domain for $250 and is asking $2,500? If his price is too high, then he will be unable to sell and will eventually reduce that number to meet the actual market demand. Plus, he probably purchased 10 domains for a total cost of $2,500. Half at least won’t sell at all; they’ll be a total loss. He will have spent hours or days or weeks researching and interacting with potential buyers. If the buyer objects to the price, then let the buyer educate the domain reseller about the real-world value of the domain to his business. Negotiations are nothing new.
I’m writing about this at some length not to protect my little series of articles at DomainNameWire.com. Overall, I lose money by writing them. But I have been writing these articles about GoDaddy sales because I believe in bringing greater awareness about the domain industry to a mainstream audience. (That’s assuming somebody once in awhile stumbles across this or any other domain-related website.)
Having buyers who know what domain owners know is IDEAL. Reporting wholesale transactions is a step in the right direction – that direction being toward transparency, toward mainstream acceptance of the domain market and domain resellers / investors. Wouldn’t we all prefer it if every buyer was also a part-time domain investor? Of course we would! But we won’t arrive at that point by concealing information.
This change in GoDaddy policy is, in my view, an appalling step backwards. We’d be rewinding progress and going back to a time when domain sales were poorly documented and mainstream suspicion even higher.
Domain industry suspicion would likely increase as well. Without sales data publicly available, it will be that much easier for unscrupulous sellers to take advantage of GoDaddy buyers, since there would be less chance of discovery and more difficulty corroborating events. In my article above, I praised GoDaddy as the most transparent among expired auction platforms. Since GoDaddy is a large target, it will always be subject to resentment from some customers. That tendency will likely be compounded if GoDaddy sales are hidden from view. So this may be a bad move for PR, depending on how domainers interpret it.
Paul, regardless of the outcome, I think GoDaddy would do well to re-evaluate this policy change. It has long-term repercussions for the GoDaddy Auctions platform. It will postpone mainstream acceptance of the domain industry as a whole. And it may reduce domain values. After all, without a healthy sense of the wholesale market, end users will scoff at retail prices even more.
My opinion – verbose as it is – is no more than my own opinion. Hopefully others will chime in!
Policy is ok, right of the person who buys the name to see of they want to disclose it. If you want to ride the train you have to pay to buy a ticket.
Joseph Peterson says
Then you’d be in favor of allowing end-user buyers the same option to suppress their purchase prices at Sedo, Afternic, NameJet, and everywhere else, right?
That would be consistent. Imagine how slim the DNJournal reports would be if every buyer was given the option to conceal his price!
With fewer documented sales to point to, all domain values will decline. That’s true even of the wholesale market.
As long as end users mistakenly assume that every domain owner has paid only the minimal $10 for what they covet, then their offers will be minuscule — less even than what the domainer paid. After all, there will be no data to show them the facts about how competitive the wholesale market really is and how rare low prices for good domains truly are!
When retail buyers can see the relatively high cost of wholesale purchases overall, they’ll be more likely to begin with realistic, higher valuations. If we want a buyer to offer us $50 for something we paid $500 for, then – by all means –
destroy all evidence of $500 wholesale purchases!
Hiding wholesale data makes the task of justifying retail prices harder, not easier. It’s bad for business.
I had someone after a domain name and they “educated” themselves as to the value, they offered 2x the base price for the GTLD, explaining to me how that covered my costs and provided me a sufficient profit margin.
They failed to take into account two factors…
1) Premium domain (about 3 or 4x the base cost they quoted)
2) I have plans to use it for my own ends therefor the domain has far more value to me than that offered (even assuming it had cost the amount they quoted)
Education is not always worth pursuing if someone gets it into their head that they need to educate you as to what is acceptable.
In the end any goods are worth exactly what someone is will to pay for AND what the other party is ready to sell for.
Genuinely well said; splendidly spelled out, if you will… 🙂
Andrew Allemann says
The issue I have with this move is that GoDaddy Auctions currently has some major improprieties. That this decision comes just shortly after a number of blogs wrote about fake million dollar bids on GoDaddy makes it suspect.
If GoDaddy Auctions were running a clean show, this wouldn’t bother me as much. There are steps GDA can take to cut down on fake bidding, but it doesn’t seem to be enough of a priority over the short term benefits of letting everyone/anyone bid up domains even if they don’t plan to buy them.
I’m sure NameJet takes a bit of heat for making everyone use a bidder handle. But it improves my confidence in the platform. When I’m in a bidding war with someone who doesn’t seem to be giving up, I google their bidder handle. I look for domains they have won to make sure the domains actually transfer, and that they aren’t always the runner up bidder.
I won’t pretend the issue is just GoDaddy, but making this change to transparency makes it as good a time as any to bring this issue to the forefront.
Scott Neuman says
Paul, Thanks for the reply. As a buyer and seller, I personally think it’s important for buyer and sellers to know what wholesale and retail is. As a user of Godaddy since the 1990’s, I’d prefer to see ending results. I have hundreds of domain names at Godaddy and this one feature is one of the reasons I continue to give Godaddy my business even though other services are cheaper. I support who I use. Honestly, I could careless what people know I pay for domain names. Get there early next time and beat my bid. It in no way matters what I sell my domain name for. Regardless of my paying $34.00 dollars or $35000, I will continue to sell my domain names at what I consider fair market value. The market will tell me if I’m wrong or not. If someone really whined to you about showing wholesale prices, I think they’ll be in the minority.
Scott Neuman / President / Recordweb Communications LLC
I spend money, and buy auctions at tdnam, support this blocking of sale price data. You are dead on with your arguments. Keep up the good work
Paul Nicks says
Thanks for the spirited debate on Christmas Eve all. I plan on being at NamesCon in a few weeks and would love to discuss this issue and any others in person, just shoot me an email and I’ll find some time to chat (paul at godaddy)
For those unable to attend please also feel free to reach out and give me a phone number to call so we can chat live. I’ll be back in the office on Monday and will certainly set aside time to discuss.
Joseph Peterson says
Enjoy the holidays! Honestly, I didn’t expect any official GoDaddy response until after Christmas.
Paul Nicks says
Thanks Joseph, same to you.
Merry Christmas all!
End users rarely see this sales data, and frankly I don’t think the bulk of them care. In fact, to an extent it could help resellers. So many end users are of the mindset of “why should I pay xyz for something that cost you $10.?” All of this notwithstanding, I see this suppression of sales data a hurtful move in the long run and a step in the wrong direction.
99.9% of the potential buyers I’ve corresponded with (that might be called “end-users”) believe that a domain costs $9.99.
Having a domain listed somewhere on a blog or dataset as something more is actually doing everyone who sells domains a favor. It’s raising “wholesale” prices which in turn elevates “retail”.
Brad Mugford says
The timing of this change seems rather suspect to me, right after the BetTrade.com debacle – an auction that ended at $1M+ on GD Auctions then was adjusted down to $117. This change I feel is just masking the real problem.
There is rampant fraud, shilling bidding, and other auction games going on there. That is what really needs to be addressed.
It is ridiculous that someone who proves they have $5 to their name can bid tens or hundreds of thousands of dollars on an auction. There needs to be some kind of bidder verification.
Also, the system itself rewards this fraud. Teams of bidders can artificially drive a price far higher than reasonable, in the process blocking any legitimate bidders from bidding. After the auction the top bidder(s) don’t pay and the auction price is adjusted down with all those bids removed. These fraudulent bidders can score some pretty sweet deals due to the poor design of GoDaddy’s Auctions.
I have been using GD Auctions a lot less than in the past because of the games going on there. I hope the integrity of the venue is as much of a priority to GoDaddy as blocking sales data is.
ChuanShen.com. According to Baidu, Chuan Shen can refer to a common term 传神 (meaning ‘vivid’), and is also the title of a role playing game on 37.com.
Wait a second, Godaddy auctions are just wholesale buyers and wholesale prices? AND at the same time Godaddy wants us to sell domains there? Oh heavens no! Why would anyone want to list their domains and NOT get top retail dollar. 🙂
The venue has both types of buyers does it not ? Who is determining when the price/buyer is wholesale or retail ? It doesn’t matter who the buyer is or what the purpose of the purchase was, the sale transacted and the sale price determines that names value at that particular time and place to that particular buyer. That’s it.
I’ve bought names at afternic . . . I run a company on at least one of them.
Am I a wholesale buyer or retail buyer. . . . Was the price retail or wholesale ?
Paul, in all the years I’ve run NameBio, where we put out all the data we can gather, I’ve gotten maybe 2 complaints. I believe I’ve been running the site longer than godaddy has been auctioning names.
I venture to guess this is competitive data that GD simply doesn’t want in the marketplace. Afternic, pre-GD purchase, cut out reporting sales for a period of time and then changed their outlook. Are you going to pull those reported sales too ?
Aaron Strong says
Well that made for a good read!!!!….I hope GoDaddy, over this joyous season, understands, learns and recognizes that “Secrets” are evil in nature..
ChuanShen.com. According to Baidu, Chuan Shen can refer to a common term
传神 (meaning ‘vivid’), and is also the title of a role-playing game on 37.com.
Senior Tycoon says
GoDaddy – leave the lights on. Reputation in a marketplace is everything.
Yeah it looks no better!
Digital Address says
GDA is the only auction platform of any type (Art, Antiques, Vehicles, Real Estate, Industrial Machinery, Domains, etc.) in the entire world that does not pass “title” to (specifically GD’s own inventory of “expired domains” that are auctioned w/o reserves) the highest bidder at the conclusion of every sale!
When I first read this and the comments a few days ago I agreed with what most people said here but then I realized this has nothing to do with it. I was going through the expired list at Godaddy a few minutes ago and it hit me.
The real reason they are removing the auction results is to prevent hundreds if not thousands of names going through the free auction process and then getting transferred out to another registrar. I can’t count the number of times I have won an auction only to have a refund given back to me a few days later.
By removing the auction results those that wait for the free appraisal and then transfer away won’t do it anymore because they have no idea what the final price the name went for in auction. This removes a massive headache that Godaddy has been dealing with and that we all have been complaining about.
Digital Address says
You are probably right!
These are my “Your auction has ended” from GD for all of 2014:
BOCAFORUM.COM – NAME
CALIFORNIATALK.COM – ENOM
CITEDIGITALE.COM – UNIREGISTRAR
DOMAINNAMESINVESTOR.COM – DYNADOT
EARTHINVESTOR.COM – ENOM
ENDOFREASON.COM – ENOM
GAMBLINGCAM.COM – NAME
HUMANECONOMY.COM – ENOM
JADENETWORK.COM – PDR
LOCALSTRATEGIES.COM – NAME
OURDESK.COM – DYNADOT
PALMBEACHFORUM.COM – NAME
PROFESSIONALAPPROACH.COM – DYNADOT
THEEARTHBLOG.COM – NSI
THEGROUP.ORG – UNIREGISTRAR
TOUCH2GO.COM – DYNADOT
TOUCHWISE.COM – NAME
TRADINGCITY.COM – NAME
USAVISITOR.COM – NSI
VACATIONDVDS.COM – NAME
WEBSITESCONTENT.COM – NAME
WORLDFOOD.ORG – NAME
WORLDFORECASTS.COM – ENOM
WORLDSKEPTICS.COM – NAME
The “gaining” registrars are shown!
Digital Address says
We are now only NINE days into 2015 and have already received three more “refund” notices:
CUSTOMERSFORUM.COM – NAME
GDA needs to change its RIDICULOUS “delivery” policy:
All domains won at auction should be placed in the new owner’s GD account immediately after payment has been received and verified.
Digital Address says
And a great one was coming up for auction on Jan. 17 at GDA:
Transferred to Name on Jan. 12!
Konstantinos Zournas says
lol @ Go Daddy
That was fun for as long as it lasted.
I will start posting all Go Daddy auction results from tomorrow.