When you receive an offer on Sedo, should you send the domain to auction?
When Sedo launched its auction platform, domain sellers rejoiced. Prior to launching the auction format, sellers could only negotiate one-on-one with potential buyers. There was no way to trigger a reserve price and get added exposure similar to Afternic’s model.
When you receive an offer on Sedo, should you negotiate or send the domain directly to auction?
The answer: it depends on the name.
For example, say you receive an offer on a generic domain that should be interesting to multiple domain investors. An example would be Support.ws, which I sold* on Sedo. I received a low offer, but the name was generic. I knew that the added exposure on Sedo auctions would push the price up, which it did. For example, here are a few current auctions on Sedo that are attracting many bidders:
b9.eu – 23 bids
0zq.com – 18 bids
fazo.com – 19 bids
ekk.biz – 8 bids
I could have tried to negotiate the price of support.ws prior to putting it in auction, but having a low starting price engages more bidders and ultimately results in a higher sales price.
However, you’ll notice that most Sedo auctions end with only one bid. This is typical of domains with limited end user appeal (such as a small niche). I recently received an $800 offer for ITBackup. I was willing to sell for this price, but wanted to squeeze out a few hundred more. This domain only appeals to a small set of buyers, not the general auction populace at Sedo. I should have negotiated directly with the buyer to get the price up to $1,000 before sending it to auction to see if anyone else was interested.
The bottom line: if you have a generic domain that will be interesting to multiple domain investors, you are better of sending the domain directly to auction rather than negotiating. If you have a niche domain with limited interest, you should negotiate a favorable price first, as that will likely be your only bidder.
*For the record, the buyer didn’t end up paying for the domain and I still own it.
TheMadHat says
Good info! I’ve been stuck in that quandary several times. I’ve also pissed off potential buyers at times sending it to auction right after I get an offer.
Craig says
I have had a similar experience. I was dismayed by the lack of traffic on the auction platform. My auction closed with no additional bids. The public auction doesn’t seem to have much momentum.
Based on my experience, I recommend first negotiating close to your sales price before submitting to pubic auction.
Mark Fleming says
You made a note at the end of the article that the buyer didn’t end up buying the name. I have found this to be a problem in perhaps 20% of my auctions. My guess is that a) the buyer gets pissed because he didn’t know there was an auction and refuses to pay, b) see no one else bid on the name and believes he would be paying to high a pirce and goes away, or c) has too much time to get “buyers remorse” and goes away.
I always keep this in mind now.
Andrew says
Mark, your analysis for reasons is true. This is the first time I’ve had this happen at Sedo, but I’ve had it happen at Afternic. Worse is when I buy a domain, and it turns out the listing isn’t valid.
In this case, I’m not sure what happened. There were multiple bids and the person knew it was an auction. We’re not talking about much money either — under $500.
After a long delay, I received a call from Sedo saying that a cancelation notice they sent to the buyer got their attention and that they still wanted the domain. But then they still didn’t end up paying.
DomainerPro says
Thanks for pointing this out. There have been a few occasions when I’ve received very low offers through Sedo for generic domains, and I’ve simply turned them down. Next time I may try sending it to auction and see what happens. Let me point out also that once you do send a domain name to auction, it helps to publicize the auction by mentioning it on your blog, posting on domain name forums, and emailing potential end-users.
Simon says
I have someone that has accepted to pay a xx,xxx sum for a domain name but has not yet paid despite 3 sedo reminders. My question is, is it legally binding via SEDO? Reading the above, I should have put the domain name to auction before confirming! How long do I have to wait before the domain can go back on general sale?
Pawan Kumar (@PawanKuYadav) says
I face the simillar case, as buyer didn’t pay… I ask Sedo about what to do..
Sedo said that you would get access of buyer contacts and you can take legal action… We can’t do anything for this now.