Building a marketplace is hard, even in the domain name business.
It’s crazy to think that it’s been 20 years since the first auction on eBay (then AuctionWeb).
20 years!
So much has happened since then when it comes to the internet.
eBay created a market of buyers and sellers, much like the two predominant domain name marketplaces (Sedo and Afternic) did. Here are a couple take-aways from this:
1. Creating a market is hard.
A lot of people gripe about paying 20% commissions to Sedo and Afternic. I don’t*, because I know it’s extremely difficult to build a market.
You need sellers and buyers to make it worthwhile for both sides of the equation. It’s a classic chicken and egg problem.
If you think it’s easy, tell me where Amazon and Yahoo’s “eBay killer” auction platforms went?
If a company invests these resources and pulls it off, they deserve outsized margins.
* The exception is if a buyer finds out about a domain being for sale on the marketplace from a parked page.
2. People don’t have time for auctions.
eBay was all about auctions at first, but now only 20% of its sales come as a result of auctions. Who has time to check in on an auction for a $25 item? In a world of Amazon Prime shipping, you don’t want to wait seven days just to purchase an item.
The same thing is happening with domain name marketplaces. Every week, about half of Sedo’s domain name sales are “buy now” sales. Buyers not only don’t want to participate in auctions, but they also don’t want to negotiate.
The same goes for new top level domain names. Landrush auctions are a thing of the past. The smartest approach to landrush was Early Access, a model started by Donuts. Now its competitors are copying the approach.
Mike says
Let me please make a point here. I like GoDaddy to a degree, BUT I think that they have one thing MAJORLEY wrong on their website . If you do not set a BuyNow they refer to your/my domain as being in “Auction” when it is NOT . It really should say “Make Offer” . They do themslves and domainers a great disservice by referring to it as an “Auction” that SUPPOSEDLY ends in, For Example, 83 days. Now most naive newbie customers do NOT want to wait 83 days to end of auction OR even ener an auction, and it is NOT really an auction as we know, BUT GoDaddy continue to insist on calling it that. WHY ???? It would bring much better responses if they called it what it is which is an opportunity for the potential buyer to Make an Offer, NOT to bid in an auction.
Try it and have a look. Go to http://www.GoDaddya and try to Buy say bttb.com It SAYS it is auction, NOT “make offer” or “BuyNow” THAT is just dumb !!.
Andrew Allemann says
I agree. Hopefully this is on their roadmap to change.
Paul Nicks says
It absolutely IS on roadmap to fix. It’s one of my personal annoyances as well.
Damn Domains says
Glad to hear because that totally sucks that GoDaddy does that and it adds a cheese factor to the person viewing the so-called auction and adds a lot more administrative work for sellers trying to inform buyers that GoDaddy is completely wrong.
Howie says
I started with an Ebay account back in 1999 and built a marketplace I occasionally use today, but have slowed down since 2011 for the domaining biz.
The bidding used to be crazy sometimes and still is for rare items. However, there is still interest in last min bidding. But if one knows the market price why not use a BuyNow to make a quick sale. I’ve sold items within an hour of listing with BuyNow.
From a buyer perspective it’s more immediate satisfaction, where BuyNow/Offer can be preference.
Marketplaces like Flippa should have a Make Offer integrated within the BIN of their auctions.