Dutch auction will start at higher prices to deter closeout sniping.
GoDaddy is changing its closeout auction pricing structure in a move that will upset some domain investors and make others happy.
When a domain name on GoDaddy’s expired auction platform doesn’t sell by the end date, it moves to closeouts. Closeouts follow a Dutch auction format in which the domain is $11 (plus renewal) on the first day and decreases by one dollar per day to $5. The domain proceeds to deletion if no one buys it by the final day.
As expired domain auctions have become more popular, bidders have refrained from bidding on domains with no other bids at GoDaddy Auctions and hoped to snap them up the moment they went into closeout. This resulted in a sort of closeout drop catching process similar to when drop catching services ping the registry when domains delete.
People with access to GoDaddy’s legacy API have been able to take advantage of this opportunity, but bidders without API access and computing power/development resources have been left out. Smaller domain investors, in particular, have felt disadvantaged.
The new pricing structure should give domain investors without special access a better opportunity to get domains in closeouts. The new pricing (effective February 1) will be:
Day 1: $50
Day 2: $40
Day 3: $30
Day 4: $11
Day 5: $5
It may seem counterintuitive that the closeouts start at more than the starting bid price of regular auctions, but the reality is that if you place an $11 bid on GoDaddy Auctions, you’re likely to see the price quickly soar above $50.
It will be interesting to see how this changes behavior.