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Would This Solve The AMA Front Page Dilemma

Discussion in 'Netfleet.com.au' started by Chris.C, Jun 26, 2013.

  1. Chris.C

    Chris.C Membership: VIP

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    So in the past I have suggested that with the decline in quality domains being dropped that it would be good if AMA sellers could have their domains featured on the front page of Snapper, but still be allowed to have a reserve...

    I always felt that if AMA domains were listed alongside Snapper domains they'd get higher bids and would have a better chance of meeting reserve, but NetFleet's stance has typically been "we don't want dozens of domains passing in on Snapper everyday from AMA sellers that set reserves too high and just end up frustrating buyers - so if you want to be on the front page you have to list with no reserve", and I have always understood their concerns...

    But of course domain owners know selling AU domains at auction is a terrible way to sell domains (and I think this is reflected in the large drop of domains being sold via AMA after the initial interest period) because there just isn't the quantity of buyers for AU domains to create competitive auction environments and many AMA domains just end up selling for the minimum $10.

    So is this a potential compromise...

    Allow sellers to list their AMA domains on the front page with snapper not with "no reserve" but a "guaranteed to sell" tag?

    That way if a seller lists a domain with a reserve of $100, but only two buyers turn up, one of which is only willing to bid the minimum $10, and another only willing to pay $75, the domain would sell for $75.

    This outcome isn't "ideal" for any party - ie it's less than what the seller wanted - but it's a hell of a lot better than the $11 he would have got under the current system, and the buyer got the domain he wanted domain at a price less than $100 he would have had to pay if he tried to negotiated with the seller (and which is a pain in the ass).

    :p

    But most importantly their wouldn't be dozens if not hundreds of domains on the front page of Snapper everyday being passed in - actually it'd be quite the opposite there would have dozens of additional deals getting completed everyday...

    ;)

    I think this sort of policy would bring a lot of domain sellers out of the woodwork and the quality of domains at auction would improve and you'd suspect quality buyers would starting turning up as well.

    Thoughts?
     
    1 person likes this.
  2. findtim

    findtim Membership: VIP

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    auDA Member:
    Yes
    at first looks to your idea ( tell me i am wrong) wouldn't that mean NF would move to the "drop" version of proxy or bid ? even though drop don't have an AMA feature.

    and how would that be managed? proxy v bid

    i'm not trashing your idea i just think that would be a programming nightmare to make sure nobody stuffs up.

    eg: we could easily end up with some putting $5k on a drop but placing it in as a bid and paying $5k instead of $76.

    i do agree that the reserve issue of thus not showing up on the daily drops is hurting the potential sales as people don't see them thus don't bid.

    perhaps the ama's get placed on the snapper on their due date but with a "red" icon that the reserve is not met yet, then once it has it changes??? another programming nightmare but i'm just mentioning it for feedback purposes.

    note: i RARELY click the "all auctions" select, thus i don't even bother with domains that haven't met reserve mostly.

    you can't cater for everyone but its interesting to find out how people use a site and how they stuff up and get lost in the menus.

    tim
     
  3. Chris.C

    Chris.C Membership: VIP

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    You all know I love my data, so here is a bit insight into the AMA vs Snapper and why selling domains with no reserve isn't an attractive option for sellers.

    I listed the following domains on the AMA a couple of months ago:

    toughenedglass.com.au
    architecturalglass.com.au
    temperedglass.com.au

    Here is how they performed on the AMA with no marketing (and not reaching the front page - obviously as the reserves weren't meet):

    toughenedglass.com.au $71 ($699 reserve)
    architecturalglass.com.au $0 ($299 reserve)
    temperedglass.com.au $63 ($399 reserve)

    Not too bad I'd say... So I think it's safe to say these domains are worth $50 each, minimum. Obviously my reserves were a bit ambitious...

    :)

    Anyway, here are the results they achieved today on Snapper:

    toughenedglass.com.au $10
    architecturalglass.com.au $10
    temperedglass.com.au $10

    Far from a compelling result that would make me want to rush and list lots of domains for no reserve auction...

    I think this perfectly illustrates the disconnect between buyers and sellers and that the present system doesn't help buyers and seller bridge the gap.

    Look, I'll be the first to admit that as a seller sometimes our prices are ambitious, but at the same time sellers aren't exactly going to be queuing up to sell domains that they know aren't worthless - yet are likely to achieve only $10 on Snapper.

    But there was an auction system where thought I could list the domains and get $50 - $100 for domains that I'm no longer going to development I'd list every marginal domains I had for sale and would move onto other projects.

    But as it stands I think lots of these marginal and sometimes semi-decent quality domains just sit in domainer portfolios being renewed because they know there is no liquid aftermarket when there easily could be and instead buyer are waiting years to get a chances to buy them or worse are wasting time attempting futile negotiations with sellers who want $300+ and a buyer who was thinking more like $50 - 100 each...

    ...surely the industry and NetFleet would be better off if buyers and seller meet in the middle more often?

    And I just fear that with the current setup sellers aren't incentivised to participate.

    If NetFleet wants any incentive I can give it to them - I'd have 100 - 150 domains that are in my portfolio that are very similar to the above domains where I'm confident they'd fetch between $50 - $200 each at auction (with a reserve coupled with and a guarantee to sell) and I'd happily sell them tomorrow if that was the current setup.

    That would potentially be 100 - 150 guaranteed sales in one day (that's almost as many as all of the AMA sales in the entire of April)!

    And I'd be certain I'm not alone...

    Instead I just renew 90% of them with my logic being "it's $20 to renew for 2 years, or I can get $10 - $20 on Snapper, which isn't worth it and they would get $50 - $200 in an auction with a reserve coupled with a guarantee to sell and would probably get $200 to $400 if someone offered to buy it via negotiation"...

    So realistically I end with the option of renewing for $20 and waiting to see if a buyer for $200 - $400 comes along in the next 2 years or drop it.

    And 90% of the time if I do genuinely believe it could fetch a couple of dollars I just renew it.

    And I mean as has been shown above, if $50 domains fetches $10 on Snapper, there is NO WAY sellers are going to be lining up to be selling their $500 domains for $100 or their $5000 domains for $1000...

    And to be frank, whenever domains that are worth substantially more (ie $1000+) come up for renewal, the thought of selling it via auction doesn't even cross my mind because I know that selling it via Snapper will only achieve 10 - 30% of its retail value - so it's an extremely simple decision of renewing.

    However if the auction was structured so that it was likely to achieve 40 - 60% of retail value you'd have a lot of owners of domains worth $1000+ seriously starting to question if they are willing to wait for that retail buyer to come along...

    ;)

    Just my two cents...
     
  4. Chris.C

    Chris.C Membership: VIP

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    Yes it does change their model.

    Yep - we totally could. In which case the seller would be stoked - but at the same time if the buyer wants to bid $5000 that's their choice.

    I think NF fear doing this because it would mean there is potentially for a flood of AMA domains crowding out the legitimate snapper/no reserve domains that are certain to sell.

    That's why I thought having a reserve coupled with a guarantee to sell might meet seller half way and bring more domains to market...

    ;)

    Yeah you can't cater for everyone - and buyers arguably lose in this scenario because they end up paying a bit more for domains - but at the same time I don't think they lose entirely because it will bring a number of domains to market that would have sat in domainer portfolio otherwise and they will still have a chance to pick up a real bargain if they are the only ones bidding.
     
  5. findtim

    findtim Membership: VIP

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    auDA Member:
    Yes
    i think there are many people out there that may place high bids as a proxy but honestly do not want to pay that much, BUT if they have to then they will, BUT would prefer to just pay $1 over the underbidder.

    i like the ability to place a proxy of $5k and then only pay $121, take that away and you stuff the system. You then enter into a "tender" senario which will kill the industry.

    i don't think this is new news to anyone.

    i myself have been on both sides of this coin and NF's current system for dropping domains works well IMHO

    and no reserve AMA, and no reserve buy it now.

    all i see you looking for is getting your domains onto the daily drops WITH a reserve and i think thats a good idea.

    anthony is about to hate me.....sorry :)

    that should be able to be solved in the database by pushing those domains to go below the the current for sale bids, thus you would get :

    current bids, then not reached reserved bids, then no bids

    just like this listing strategy of paid members and non paid members

    HTML:
    http://www.modernbrides.com.au/listings/all/all/all
    you see the top righthand listings are purple and never leave the top on F5(refresh )then the gold never leaves that next section on F5 and the grey is just a list.

    so what could happen is domains with bids on could go top ( purple ) :), "not met reserves" could go next ( gold ) :) and then list the rest.

    programming nightmare.

    it would just come down to a cost/benefit/break-even-point for NF to do it.

    tim
     
  6. Chris.C

    Chris.C Membership: VIP

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    When you go buy a house at auction you nominate a price and then it's the duty of other bidders to out bid you with their nominated prices.

    That said the reason why this system might not work with the current netfleet system is because of the time constraint...

    ie at a house auction there is no time limit - the bidding stops when the bidders are finished so they typically start low.

    So if netfleet was to opt for the suggestion I made the incentive for people to bid high proxy is that another bidder might out bid them in the final seconds (so yes it's like a tender).

    The alternative of course would be to allow for bidding extensions, ie have auctions finish 5 or 10 minutes earlier and if there is a bid in the final 60 seconds add an additional 60 seconds, until the bidding stops, but this would potentially be gamed over time.

    But this is the point exactly - a buyer says they are willing to pay $5000 for a domain - but the present system only gets them $121.

    What seller in their right mind who thinks that fair value of their domains sits somewhere between $2000 - $10000 is going to be happy netting $121...

    That they are going to do is not put that domain up for auction and hope that that buyers finds it in the catalogue and negotiates to buy it (but of course this doesn't happen very often and even when it does with limited urgency for buyer buying via the catalogue these negotiations fall over more often than not).

    At the end of the day business is never done unless it is good for both parties and $121 isn't good for sellers so as a result they don't bring their goods to market.

    Why would tenders kill the industry...

    I honestly think it would do the complete opposite as it would bring buyers and sellers together in a fashion that netted more equitable outcomes for both parties.

    And when I've posted about this before most people thought it was a great idea (including NetFleet and yourself):

    https://www.dntrade.com.au/netfleet-com-au/4910-domains-tender.html

    I used to play both sides of the coin as well - and as a buyer I never had any reason to complain...

    ;)

    However these days my purchases are only for major developments only (and typically via the catalogue or privately) so I'm more on the sell side - thus the reason why I'm highlighting my concerns about the selling process.

    I know it comes across like having my cake and eating it to - but it's just the commercial reality that as a seller I'm not going to sell domains at 70%+ below retail.

    And I've been harping on about the reality that NetFLeet was inevitably going have to focus more on the AMA market as the volume of quality expiring domains slowly dries up and we are finally seeing that with Snapper domain sales at all time lows stuck 500/month.

    The problem now is the AMA sales are also well off their highs after what was a bright start with an average of 300/month for Jan/Feb/Mar...

    I suspect this is because lots of sellers, probably like myself, threw a bunch of domains up for sale in the first couple of months to test out the AMA and clear a bit of dead wood, but given the results weren't "spectacular" for sellers they probably don't use it as much anymore.

    Anyway it just feels like the AMA market is caught in a bit of stalemate at the moment and unless there are some system changes it is unlikely to surge back to life.

    This is how I hope they approach the decision.

    That is why I mentioned in my last post that if they needed any seller guarantees about if they invested the time, energy and money into changing the system that I'd be willing to commit a certain volume of domains to be sold on a new system so they could at least be certain they'd make a return.

    And I'd like to think there would be some other domain portfolio owners that were willing to commit to a certain volume of domains to give NetFleet some assurances.

    I'm just a phone call away if they ever want to chat.