Symbolics.com

Domain Auctions are in Need of an Overhaul

NOTE: 
This post is the collective thoughts of Elliot (at ElliotsBlog.com) and myself.  Elliots original post, on Issues Facing Domain Auctions can be found here:
http://www.elliotsblog.com/domain-auctions-problems-solutions-part-1-1020
Elliot has given me permission to post OUR suggestions for improvement.
Elliot will post a “Summary Wrap-Up” with his personal touches, on his blog, within a few days… so be sure to look for it.

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Elliots original post has produced some incredible suggestions for improving the domain auction system.  35 comments poured in within 24  hours, and many of you had some great insight as to what should be done.

I am going to list a few of the suggestions here, but I feel there is one simple (yet MAJOR) solution to our dilemma.

While Elliot did touch on the fact that
A: The same names appear to be popping up over and over
B: Sellers price expectations are high
and
C: PPC is down

I don’t really feel these are the main reasons for poor performance.

Personally, I believe it is a lack of marketing, awareness and outreach.

A majority of the readers’ suggestions cited improvements needed in the inventory, pricing and structure of the auctions.

I believe we are all thinking like Domainers a bit too much — and we aren’t looking at the industry as an outside investor would.

Rick London suggested something that I believe would be a “home run” to our industry:

“Sotheby’s or Christie’s could get into the domain business and perhaps be able to get far more publicity that what there is now for the domain auctions.”

This is what is lacking.
Sotheby’s and Christie’s do NOT simply hold auctions and just expect people to show up.  They advertise and market their events like crazy… as does every auction house.

I believe we need to market our auctions in the same way — mailers, catalogues etc.  We have to reach out to the investors of the world and educate them on the incredible opportunities that domains hold.

I received a mailer from “Robert Edwards Auctions” on Monday. 
Robert Edwards Auctions is a sports memorbilia auction house. 

The flyer told 3 important things:

1. It told of Robert Edward’s credibility
2. It told of the opportunities that exist in sports memorabilia and the state of the market
3. It cited recent sales that the auction house has produced

Simarly, Mastro Net (Memorabilia), SCPAuctions (Memorabilia) Sotheby’s (Art, Coins, Collectibles) and Christie’s (Jewelry, Real Estate, Antiques, Art) send out mailers and catalogues to potential buyers.

There is an incredible amount of marketing money spent before each auction.  This HAS TO BE DONE.

Don’t get me wrong “Weeding out the crap” as many commenters suggested… that’s needed.  “Charging sellers a fee to list domains” is not a bad suggestion to this specific issue.
However, I feel that the problem lies in the marketing and promotion and not so much in the volume of names.
Have you seen a SCPAuctions, MastroNet or Christie’s Catalog?  HUNDREDS of pages… it takes a good week to go through the whole catalog.

Back to the issue at hand…

Christie’s sells high end real estate.  They produce a magazine titled “Christies Great Estates”.  It’s absurd to think that they would sell high end property without marketing and without an outreach to investors.  Why is our industry different?

We’re turning into a social club — and I don’t like it.  It’s killing our industry.  If we’re just buying and selling each other’s crap then we’re not in an “industry at all” — we’re in a cult.

We’ve got to get serious.

I’m suggesting (in addition to other’s suggesting this) a partnership with Christie’s or Sotheby’s.

CAN YOU IMAGINE the publicity our industry would receive?
No longer would we shoulder the burden of trying to educate people on the values of our precious holdings.

Can you imagine the NEW CAPITAL that would be thrust into our industry?
Can you imagine the sales Christie’s or Sotheby’s would produce?
Every sale would be newsworthy — people would finally see how valuable domains are — and the information would come from a 3rd party… NOT from us.

Domains are serious investments — they are global.
Sports memorabilia is TANKING — yet auction houses are STILL producing big sales — because they are FINDING the buyers.

This suggestion does NOT cut Rick Latona out of domain auctions… we need Rick (or someone like Rick) to present our industry to Sotheby’s or Christie’s, be the liaison between the sellers and the auction house, help produce an inventory of domains and to educate the auction house on our industry.

I don’t think any of us has a good solution to the current format… we don’t run auction houses.
We have suggestions — shortening the auctions, lowering the reserves, make extended auctions 500 names and not 5000 etc.

The volume of names, and even the prices of names might not need changed.

There are people out there with money.
There are INVESTORS out there.
They need to know about our industry and jump aboard.

I’ve blogged about little old ladies buying $1,000,000 worth of gold at a local coin shop… Imagine these people buying a top domain to pass down to their families. 
“My grandma bought our family GUNS.com”  – that’s pretty bad ass

This won’t hurt the little guy that buys names on the drop or who buys $100 names.
The Christie’s and Sotheby’s auctions are for the high end sellers and buyers… so this really will only adversely effect the high end buyers — but they aren’t doing much at the existing auctions anyway.

We will still have a need for low and medium priced auctions (Rick Latona)
and the suggestions of lowering reserves, shortening auctions, limiting submissions etc. can all be applied.

I’m wanting to help give this industry a desperately needed shot in the arm — something that I suggested was needed long ago.

The outreach to investors and marketing is what’s lacking, and
I feel that a major auction house could do this far better than anyone in our community could.

YOUR COMMENTS ….. ???

*** Elliot will post his personal summary soon on his blog.
He will have suggestions on improving the existing format.

My post is about channeling the high end buyers.

- Moving Forward….

- Aron

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