I like social gatherings. Parties, conferences, meetings, galas. It’s part of my personality and nature, as I am eager to communicate, to reach out to others and exchange ideas and share information. Plus, the drinks, food and further “opportunities” are there, especially when one is single.
A while back, I considered attending the GeoDomains domain conference in San Diego. It’d be an interesting change from the non-themed domain conferences, such as TRAFFIC, that tend to “steal” the majority of the industry’s limelight.
Then I realized it’d be an expensive party to attend, for an East Coast guy like me. Investing time, effort and money to temporarily interact with the same industry entrepreneurs that I interact daily via email, phone and social media didn’t sound like a good idea, for the overall cost. So I decided against it, and seeing the results of the auction as it was relayed yesterday from DNN I should add that I am glad I did not submit any domains to the auction.
Exactly one year ago, I had my biggest domain sale to this date: Constantinople.com left my domain fleet as the main battleship and into the hands of a fellow Greek investor, for the sum of $38,000. Considering how the city is no longer named Constantinople but Istanbul, it was a geo-domain that in the eyes of many would have triggered little interest; in fact, initially Sedo refused to list it. It was subsequently sold outside of Sedo, using Moniker’s escrow and left me with the sensation that domainers can sell their soul, if needed. I’m just glad I didn’t sell mine to the devil.
So yesterday’s GeoDomains auction results show that 29 domains were sold, for a total of $101,089 and the biggest sale being SierraMadre.com for $15,000. That’s a shocking departure from the hype and expectations of such a well-publicized event. In fact, the total selling amount of the first 15 domains, barely matched my single geodomain sale of last year!
Why’s that, you may ask. Simple: selling ice to the Eskimos does not work. They have their own tools to cut it up from the glaciers. You need to sell them something exotic, or better still, find a market far away from the icy lands of North Pole. The domain circle of trust has become too close-knit, too overly saturated and too controlled in order to maintain a constant flow of high figure sales.The people that attend domain auctions are not the type of investors that you should be targeting, in order to maximize your ROI.
Chasing end-user sales is the key to survival in the well-understood low economy that we’re going through. That is, sales that are promoted and achieved outside of the known channels of the domain industry. Want to *buy* domains at low prices? Then by all means – based on the paltry results of recent domain auctions – use these venues to get the best domains for your buck. But if you’re looking to *sell*, start thinking like a combination of a private investigator, a used car salesman and a pimp.
It’s time to take care of your own matters, as auctions won’t take care of them for you. And that’s the single best advice I can give – without charging for my services. But hey, you can always follow me on twitter.
Good post Acroplex. I happen to agree with most everything you just said. In fact, the auctions have been domainer to domainer for a long time … no end-users in sight. Past time now to move on. It’s a big world, much larger than the domainer circle.
Unfortunately, the front-end of auctions is the bait; the action happens in the back lines. However, with so many more auction opportunities one would expect better sales results. The opposite appears to happen, and that’s due to the fact that the money is in end-user sales.
There have been many million dollar sales in the conference auctions, how many in the forums?
So the auctions still get 500 domainers in the same spot at the same time, which gets good results.
Graham, who’s talking about forums? There are no end-users in domain forums.
And if you believe that 500 domainers is “good results” when the auction nets $100k then something’s wrong with your business plan.
Great post. I’m kind of a passive participant in the community. I own a few decent domains, but nothing to get excited about at this point. I have, however, noticed that the big money is being made in both development and in targeting sales to non-domain industry players. PPC just isn’t doing it anymore, and the trademark ramifications of the PPC-serving algorithms makes the risk of PPC not worth the ROI on everything but the most generic domains.
John, it’s true that diversification is the key (old proverb of not keeping all your eggs in one basket). Those that have been attending the domain conferences over and over will find that critical mass has been reached: trading baseball cards with your buddies gets counter-productive after a while 😀
In our services we spend an great deal of time sending emails to potential end-users. We also provide advice and promotions to all the sellers whose names are entered in to the auction to attract end-users and encourage them to reach out in a similar manner.
Yes, most auctions are in front of a domainer audience but in our experience end-users are not interested in auctions or domains for the most part. The dreamy “end user” buyer is only interested when they are ready not when a domain auction is necessarily. It’s a time sensitive thing. End users simply aren’t the ones buying domains day in and day out and they aren’t educated on this. Most don’t really understand why they’d want to buy a particular domain name when we contact them. You’ve never experienced this ?
Regardless, we still make this effort and several of our auctions have had “end users” who we contacted and showed up. They usually aren’t the winners but they are bidding. You just don’t know it.
I believe a proper focus is to market to both segments as any auctioneer should. The more marketing you get the more bidders you get.
Adam – absolutely, a fair balance in targeting buyers is needed. I disagree on the elusiveness of the “end-user”, because I’ve encountered that beast many a time 😀 In fact, I think that with 1,230 domain sales under my belt I’ve learned how to tell buyers apart. There are so much trivia I could share that perhaps I need to write a book on the subject.
At this point, the sales result of the GeoDomains auction speaks for itself.
I think you are right Adam. I’ve definitely run into end users who have given the email equivalent of a wtf look. I agree that it is a big problem that a lot of people still don’t know or understand what domainers do, or, if they do, they think that all domainers are cybersquatters. It makes selling a great TLD that could match a future product or service name that much harder.
Acro are you targeting the end-users (ie going after them) or are you waiting for them to call upon you?
Hitting someone up in an email and sales pitching them is a much different position to be in then having them coming and knocking on your door. 2 entirely different animals here.
My point was the “end user” comes to buy when they need it. You can lead them to the auction, educate them on the benefits, etc etc, but in the end “you can lead the horse to the water but you can’t make him drink”.
Love to hear your trivia. I imagine we both have experiences that provide a mountain of info. Feel free to shoot me an email or DM to discuss. The topic is of genuine interest to me. A book would be great too . Why not?
Adam, I go by the saying “if Mohammad won’t go to the mountain, it goes to him” – it’s an unconventional way of thinking.
I’ve had success both with direct outgoing inquiries and cold calls / emails / end-market research, and from responding to incoming inquiries. The strategy is, to avoid the places where everyone is selling at, *if* you want to maximize your return on investment.
It appears that despite the many auction venues currently offered, the attendants are technically the same: domain investors, that won’t pay top buck for a domain (unless of course they were asked to participate in an auction as the only method of bidding on a domain).
Arco:
You make some good points, but you’re jumping to conclusions. I was at the Geo Expo and the bottom line is there weren’t any major Geodomains for sale. Believe me, if something like SanDiego.com was being auctioned it would have gone for more than a million because I would have bought it. The reality is that no one is currently selling high ticket Geos and there wasn’t one bonafide Geodomain at the Expo with a reserve above 50K. On the other hand, almost 50% of the names were sold and the vast majority were excellent low-reserve longtail Geos.
hey David,
How am I jumping to conclusions, when I’m simply quoting the results of the GeoDomains auction with further analysis on the auction trends?
And a statement of the sort “if something like SanDiego.com went on sale”, sounds like wishful thinking. It wasn’t, so why create a speculative statement?
The best domain name to sell, IMO, was SierraMadre.com and for a major geographical element, it went below value.
StAugustine.org went for $1,750 – that was another bargain – and the auctioneer struggled to sell Minneapolis.net for $6k.
So, in an nutshell: The auction results were disappointing, not just because of the failure to reach the expected dollar totals, but because it is evident now that there is an increased hype that surrounds conference auctions.
The real challenge – not just for Geo domains but for domains in general – is to sell to end-users. Recycling domains at conference auctions does not generate the intended ROI; that’s proven by the numbers and the ratio of sold vs. unsold domains.
I brought up SanDiego.com for a very good reason: Not many Geodomainers I know are going to get hot and bothered about buying SierraMadre.com. Geodomainers ARE endusers and unless someone is new to the game or passionate about developing SierraMadre.com (and I don’t mean mini-sites) no one is going to pony up much more than 15K for that name. Geodomainers are an extremely discerning group and the reason the Geo Expo auction had a low gross is not because they were selling “Ice to Eskimos” but simply because there were no great Geo names for sale.
Also, no matter what people say, when it comes to putting your money where your mouth is dotCom is King. I wouldn’t spend $500 on StAugustine.org or Mineapolis.net, but I would spend a million on SanDiego.com (and most Geodomainers I know feel the same way). By the way, the person who spent 6K on Minneapolis.net was Dan Pulcrano – just so he could point it to his Minneapolis.com.
David, I understand your passionate defense of geodomains; however keep in mind that this post is not a criticism aimed at the geodomain industry, far from that.
As I explained, my very own largest sale was that of a geodomain. But what I am referring to is the paltry sales of domains at auctions and particularly, conference auctions.
I did not witness much passion and excitement at the *auction* itself – the results are listed at DNN.
I’m sure the juice is elsewhere, however when the auction itself barely generates 6 figures there is a lot of concern among those that choose auctions – and sometimes are told to submit their domains without a reserve price – as their platform to sell domains.
Actually, you and I are in the same corner here. I also believe that most auctions have become somewhat incestuous because selling to typical, flipping, non-developing domainers is very 2006. The real money (and future) is targeting specific endusers and developers who know how to monetize on a major scale. These are the people who will pony up the big bucks for a mega brand.
Today, each conference auction has a different challenge. The Geo auction must have major US city.com names to pull in a high gross. However, the great thing about the Geo Expo is that it is the ONLY conference where the endusers are already in the audience. The problem here is that no great Geodomains are available (and it’s not the auctioneer’s fault). Yes, my SanDiego.com example was wishful thinking, but I was trying to prove a point that if it had been for sale it would have sold for seven figures.
DomainFest, TRAFFIC and Domain Roundtable have a bigger problem. They are still trying to target and attract high-ticket endusers. As a Geodomainer, I would consider buying any major US city.com name. However, DomainFest, TRAFFIC and Domain Roundtable must target individual endusers to match their names. Very difficult.
“selling ice to the Eskimos does not work.”
I did not understood until I read your post, match very well 🙂
One don’t allways want to make the most of his domains, sometimes one need/want some quick cash.
When one have acceptable names and he is willing to be reasonable then auctions for example are very usefull to generate this liquidity one is searching.
Now I share with you that if you want to maximize profit you need to work to reach the right end-users that may have interest in your names.
But this involves:
– Spend money.
– Spend time.
– Not be lazy.
– Be active.
– Be clever.
…
My feeling is most domainers simply are holding their names and waiting a buyer come alone and offer them a big amount for their name that is sleeping into their portfolio without doing anything.
I have made a lot of sales over $100k these past years and I can tell you most have been done after contact myself the potential best buyers and explaining them why they should purchase the name, and it has nothing to do about the usual domainer speech we use to have to sell a name to our peers.
Auctions by nature are targeted to domain investors and I don’t see this change a lot in the future.
acro,
nice post.
I have a friend of mine in possession of a really nice GeoDomain, but he can’t see the value in selling. If you have any tips for me (or would like to help me get him to sell it), I’m sure a $uitable compen$sation could be arranged. You *know* where to PM me…LOL…
I have been working on the “If you build it, he will come” mentality, when I should have been taking the “step right up, lookee lookee lookee, don’t crowd, there’s enough for everybody” stance.
Time to get busy reinventing myself.
Thanks!
Would ucla.tel qualify as a GeoDomain? LOL.
Good discussion. The auctions have suffered for a variety of reasons, not just one. Name selection has been often mediocre to terrible. The small number at the auctions are not indicative of the total pool (which is very large) of end-users that exist. Far, far from it.
The familiar names at the geo auction and TRAFFIC are a relatively small group of end-users, but a tiny representation of future buyers and developers. Many buyers are not domainer types. They do not attend these auctions.
FYI… Eskimo is an ignorant term used by Europeans (and perpetuated by others around the World) instead of asking the Inuit their name.
Do your research, hey, maybe even get to know an Inuk – but whatever you do – please Stop Perpetuating Ignorance and Mis-Use of such incorrect terms.
In the context of European ignorance the term is apt, but in the form you use to describe the inhabitants of the Arctic, is it not – they are Inuit: “Selling Ice to the Inuit”
How’s this for a lark – “Selling Knowledge to the Ignorant” ~A Growth Industry.
PS: Interesting speculation as always Theo! Keep-up the information and entertainment (-:
Hello JB – Apparently you’ve misunderstood my intention and use of a common phrase. The phrase “selling ice to the Eskimo” does not indicate achieving deceit against someone; on the contrary, it means failing to sell a commodity to those who already own it. But thanks for your comment and for the Inuit/Inuk reference.