A lower starting price is a bet on higher sell-through rates.
NameJet is lowering the starting bid prices on a number of direct-transfer expiring domain names. These are the domains that are registered at partner registrars and don’t go through the full pending delete cycle.
Domains from Tucows (which owns half of NameJet) will be first to have a starting price of $39 instead of $69.
Why would lower starting prices make sense for registrars and NameJet? It’s all about the sell-through rate.
Every day, domainers pass on lots of domains at NameJet because they don’t want to pay $69 for them. They’d rather acquire them in the pending delete drops at lower prices, or just pass on them.
NameJet and Tucows get nothing when that happens. $39 is better than nothing.
Plus, one backorder at $39 spurs attention from other domainers who can bid up the price.
There’s a reason that GoDaddy starts its bidding at $12. While plenty of domains sell for less than $69 (or even $39), the sell-through rate is higher and the overall revenue per expiring domain is probably higher than if the minimum bid was $69.
It will be interesting to see if Tucows selects certain domains to have the lower price or puts all of them in at the lower price. It will also be interesting to see how this price point works. If other partners jump on board, it’s safe to say that it worked.