10|10|2012 06:27 pm EDT
Keep Playing the Music . . . Really, The Ship’s Not Sinking, Part 2
Over 4 years ago, I wrote a post about the results of the 2008 TRAFFIC auction. That auction did over $4.3 million in sales. Can you imagine ? Back then the entire industry was looking for a barometer of the state of the business during a tough time, and the results were considered dismal with a total sale volume of ONLY $4.3 million. Times sure have changed!
If TRAFFIC auctions were a barometer of the market conditions, what are they today ? I think they may have sold under $150,000 in names. Rick just posted on his blog “The market is a snapshot of things and the picture it took was not very good. While many attendees are doing well, the average domainer is not.”
We don’t have the official results from TRAFFIC yet but a lot of domains didn’t sell and a those that sold didn’t fetch big prices. That’s the snapshot. The results DNN posted live were terrible, but I think they can be expected based on the names. Rick promised this to be a list of domains that would put a buyer in the top of the pack of all domainers. There were some good ones (I even bought one) but I’m not sure the list could completely deliver on that promise. Rick just said “I can only choose domains that folks want to sell and look at it through the eyes of a domainer.” I know that’s a hard task. I’ve done it before and everyone is a “keyboard critic”. You do have to work with what’s been submitted and sometimes you go with what you have been handed. I don’t think that price to quality ratio were at a level that domain/investors would bite right now (more on that later).
Andrew Alleman wrote in his piece that this TRAFFIC auction was the most exciting in years. I wasn’t at the auction so I can’t comment on the buzz or on how exciting the room was, but I think even though Andrew is taking a beating about his post, the buzz and excitement is a good sign. It shows what I believe to be true too, it’s a buyer’s market and there really are buyers wanting to put money in to domains still. Rick even mentions the names of buyers who did buy at this auction. They’re domainer/investors. Guys whose names you know from other blog posts : Mike Berkens, Sean Sullivan, Morgan Linton, Darren Cleveland, Gregg, McNair, Russ Goodwin, Bill Sweetman, Brain Benko (who bid/bought on my behalf).
Raymond over at Hybrid Domainer asked if the time for live auctions had passed. I commented in length about my experience and thoughts on auctions over there, but to summarize, I believe live auction events need to be aggressive and open. They need to do aggressive marketing and be aggressive about getting great names at great prices. This is nothing new really though, but the domainer/investor buyers are much more savvy and much more choosy today. They’ve got a lot of inventory that they can choose from just buying a name over at DomainNameSales.com or finding on a drop list.
A live auction should be open and never turn away a bidder and provide a technology that allows bidding online. The phone bidding at TRAFFIC required prior registration which I didn’t know about so I called a friend. I know first-hand how tough the technology side is to pull off. I helped put together an auction on a shoe-string budget from a Vegas hotel room (not a conference room) and we did $150,000 on our first attempt. It wasn’t easy. I’ve also been involved in several auctions that melted down because of technology limitations at the hotel. It can be done though and it has been done. Let’s not bother if we’re not doing it live and online though. As DomainShane said “It baffles me that in 2012 we still have this limitation”.
Every day domainer/investors spend thousands of dollars at NameJet and SnapNames auctions bidding live online from the comfort of their homes, so there are buyers still out there. They don’t even need audio/video on those systems . It’s something we’ve all come to expect at the live events but it’s not necessary. Being in a room with a bunch of domainer/investors doesn’t do anything but allow you to show-off your bidding really.
As for the “end-user”, it’s my opinion that they generally don’t care about live auctions. I’ve marketed domains from our auction to this sort of buyer. Unless the deal is out of this world and they must have the name, they’ll buy your domain when they’re ready. We’ve seen end-user buyers bidding at live auction events and they’ve bought some big dogs. We have to hand it to the remarkable marketing of these live auction companies that pull in these bidders. That’s not an easy task. I’d venture to guess they put a lot of effort in to getting those names and those buyers all lined up months ahead of the event.
The “Titanic” of live domain auctions may have sunk (again?), and as Rick said, there’ll be people dancing on the grave. I don’t think the grave is the domain aftermarket though. The good news for domain investors is that there are still buyers out there. I can attest to this, I had one of the best quarters ever this year selling, and I’m still buying as well. I made more on sales this year than ever and I’m not really a seller. Buyers are picky though, especially domainer/investor buyers. They’re looking for good domains, cheap. They know everyone is selling and the buyer pool has become smarter and savvier. If you want to continue to sell names at live auctions targeted at domainer/investors, give ‘em what they want.
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