Many domain investors will pay more for expired domains than ones owned by other investors.
Over the past few days, there’s been a lot of conversation on Twitter about expired domain auctions.
I believe it started with Josh Reason asking GoDaddy to allow private sellers to include their domains in the GoDaddy expired auction stream. He proposed running them like the other auctions (no reserve) but labeling them as private party on the auction page.
The closest comparison is NameJet, which lets private sellers on its platform. I think a lot of buyers are frustrated with reserve domains on NameJet, but Josh thinks as long as the domains have no reserve people don’t care if it’s an expired auction or private party seller:
I get it, but disagree.
If you have a platform of ONLY no reserve auctions that include expired and owner listed, I’m sure that people wouldn’t favor one over the other.
Buyers are conditioned to prefer expired auctions because they ALL are no reserve…
— Josh Reason | 🌐 | (@JoshuaHReason) June 25, 2019
I disagree and I know that others do, too. There are a couple of reasons that I’d prefer to buy an expiring domain than one that another domainer is trying to sell through the platform.
First, I think there’s less chance the domain has been shopped around in recent years. Less chance it’s on Sedo or Afternic. I’ve sold expired domains within weeks of buying them when someone who was watching the domain but didn’t know how expired domains work reached out. And if you add it to Afternic for the first time, some registrar partners will email customers with similar domains and let them know the domain is available.
Second, there’s at least some psychological feeling that if another domain investor is dumping a domain, perhaps it isn’t that good.
The other challenge I see to private party listings is shill bidding. It adds incentives for people to bid up domains. This is a problem NameJet recently had.
The fact that people want to get their domains in the expired auction streams at GoDaddy and NameJet says a lot. These domains tend to sell for good amounts. More than the domains would sell for if they weren’t expiring.
An interesting middle ground would be to have a separate auction stream of no reserve, private-party listings. The lists would be provided to services like ExpiredDomains.net so people could analyze them. Having a separate stream allows investors to apply whatever premium they want to domains that are expired.