Domain Name Auction Trading Guide
A Guide to the Dos and don'ts, the ins and outs, scams and bargains, pitfalls and windfalls that you can be faced with when you engage in buying and selling domain names at online auction.
Beware:
Names tied into hosting contracts. This is a common script and hosting sales technique and only really applies to new name registrations.
Sellers and buyers with zero, low or substantially negative feedback, in other words - no history of reliability. You want to make sure that the seller isn't going to disappear into the ether along with any money. Sellers want to make sure that bidders aren't just idiots who won't complete a trade.
Shill bidders. Have a look for strange bidding patterns, perhaps an inexperienced buyer being continuously ramped or last minute bid retractions from previously very active bidders, both possible warning signs that a seller may be trying to manipulate an auction. Equally, not all independent bidders may be angels either!
Obscure names in expensive forms that are about to expire. If the renewal is going to be $99 you had better be sure that strange offshore colony's extension is a real killer name.
Names registered with places that charge a release fee. Though this is nowhere near as common now as it used to be, some places still do make charges for changes to name records and transfer out of domain names. Domain trading and maximising the return on any surplus name requires flexibility and the ability to change name records swiftly. Each person has their favourites and dislikes. If it will cost you $x plus the name renewal to transfer it across in addition to the purchase price is the name still worth the bid?
Names including other company's trademark where you have no legitimate claim. So you buy the-new-all-singing-ebay.com and build your dream auction site around it. And you really didn't expect the lawyer's letter to arrive? Of course they are useless in the name market because they have no legitimate end use or potential.
Gold to be found:
Names with good history, long time to run, easily managed registrar or agent's interface, quality backlinks out there, good generic name with frequent searches, niche, underresourced market and easily promoted.
Not worth a cent:
Names expiring in a few days. That's usually why they are being sold. The names are unwanted and due for renewal. Other attempts to sell have usually failed and that is why, at the last minute, they go to auction. Convoluted names without any good history or names that include trademarks are not worth the cost of renewing, let alone paying a premium for.
Valuing a lot:
Ignore ego-massaging, imaginary-wealth creating valuation software. A domain
really is only worth what someone else is prepared to pay for it in its
given state, be that name only or fully fledged business. A decent domain
name lot at auction will include one or more names that should be marketable.
Always valuable will be 3 letter and single words in the .com and then .net
form and lesser so the .org and .info. with domains such as .biz at the
base of the pile. Regionals are dependent on language but meaningful one
or two word generic names will be popular in their home country's top level
domain. Value may be added to any name by exisitng quality backlinks, a
good archive history, long period since registration, highly searched word
and brandability. Is the name purely to be monetised using third party sales
pages or are you considering development? If you would develop then does
it enhance other domain names you own? What is the return in the sector
where you anticipate its future use to be? What work would be needed for
good SERP appearances in such a sector and if not achievable what would
be the cost of PPC promotion on such a site. If you are buying generic combinations
in quantity, do sufficient numbers have a lengthy period of time to run,
in which to monetise and profit from the aquisition, before the expense
of renewals comes along?
Seller's Checklist:
Have you got all the details of the domain to hand and are they up to date? Check your WHOIS email address is still valid. Amend if not.
Decide which regions and what payment methods you will accept. Special cases can be made of course in the event of very high feedback and understanding of verified, cleared payment from interested bidders. Consider an escrow service for high value names.
Set a realistic starting price. You may prefer a hidden reserve. Domain auctions are designed to dispose of names fast. Buyers need time and resources to realise a name's potential and you need to get rid of it fast. If you start at $5000 you need a reason.
Buyer's Checklist:
Have you checked the WHOIS details? If you intend to purchase a name you need to know how long it has to run and how hard it will be to transfer. WHOIS results tell you a lot about any name that you are interested in. Also; if you are in any doubt about the seller's legitimacy to sell a domain name you should be able to verify this via the recorded WHOIS email contact.
Have you done some homework on the name? Has it been abused or is it a goldmine for quality backlinks that you can build on?
Does the name, if not generic, infringe on anyone else's trademark or intellectual property. If you're not sure and wary then names aren't worth spending time and money in developing.
How do you intend to pay for the name and effect transfer? Do you have an account with the current registrar or agent into which it can be pushed? What paperwork and electronic communications will be necessary for the transfer?
============Mar2006=============
All advice in this guide should be regarded with reference to any site's recommendations and terms of use when buying or selling at online auction.
The author is an ebaY Trading Assistant who has bought numerous names on ebaY and has been registering domains since 1999.
More auction information and tips coming soon
.