It’s a question I’ve had many times and I don’t think anyone has put together the data (or even could) to answer it. Would the same domain name sell for more in an expired domain auction vs a regular domain auction? My thinking is, yes – expired domains sell for more. This afternoon, Josh Reason commented about this issue on Twitter:
In his Tweet, Josh cites a UI issue as the cause of this…and while I agree, it would be great for Go Daddy to update the UI here, I think the issue goes much deeper.
I have always felt that it goes down to the way that people (well Domainers – who are people too BTW!) think about an expired domain auction. When you see an expired domain, you know that someone has let the domain expire and the name will sell to the highest bidder. Something about that, psychologically (and maybe a little factually too) makes me feel like I have a better chance of getting a good deal.
With a regular domain auction, while the domain owner could start at $10 and go from there, I usually find a starting point that in my mind often makes it easy for auctions to go from wholesale to resale pricing quickly…or in some cases they’re just starting at a retail price.
As investors, we have to all buy at wholesale otherwise if you really need liquidity later on down the road you’ll find yourself selling at a loss. Still, going back to the psychology of expired domain auctions – I’m not sure if it’s just me that feels like there is a greater opportunity in expired auctions or if that’s something other people feel as well. I know that my buying activity has been pretty laser-focused on expired domains for years and it’s pretty rare for me to look at public domain auctions from other investors…I’ve kinda written those off.
So now is where I’d like to hear from you and I think it’s a good discussion for us to have. Do expired domains sell for more than public auctions? If so, do you agree with my theory or do you have one of your own?
I want to hear from you, comment and let your voice be heard!
I’m not sure that any domain can be assigned a “wholesale” or “retail” value, Morgan, as the amounts domains sell for depend on so many variables, including how much the seller needed cash at the time, whether the buyer was a reseller and, if an end-user, how much they wanted the domain and could afford.
When buying a domain as an investor it doesn’t really matter to me if it’s an expired domain or one being sold by a domainer, the important thing is the qualities of the domain including how many other extensions are registered, whether there are sites at those domains and if so by whom, how popular the word/phrase is, whether it’s a growing field, a high CPC field, etc. Then I decide if the reserve or minimum bid, if there is one, is too high to make the domain worth bidding on.
How many investors look more or primarily at expired domain auctions I don’t know, but I think those who do and neglect what’s being offered by domainers who may be over-invested in domains and need cash quickly are closing themselves off to possible great buys.