Domain Auction Sites Want You to Do All the Work – While They Make the Money?

Posted on Feb 17, 2012 in General Domain News | 13 comments

Domain Auction Sites Want You to Do All the Work – While They Make the Money?

I have a rant and I don’t think I’m being unreasonable.

I received two separate emails, a day apart, about my domain lists I have up for auction at Sedo and Afternic. In the past six years, I’ve sold over 400 domains between the two, and both auction sites worked well enough in the transfer process to keep me satisfied with their services. They take a minimum of 15% commission on my domains sold, and that’s fair, if they do the work to earn it.

Here’s the rub:  As far as I know, based on their emails to me, neither Afternic or Sedo filter their total domain catalogs on an annual basis as a matter of keeping their inventory fresh for new buyers.  Two domains I sold on my own last year, were still listed with Afternic and Sedo auctions as they had been for at least five years. This month, these two domains were “bought” again, and both Afternic and Sedo just “assumed” I still owned the domains.  (Note that I listed over 1000 domains with each auction site.)

I had to inform both companies that I no longer owned the domains.  I advised that they should have checked the whois, or at least emailed me prior to agreeing to sell the domains (which they sell through automated means) to make sure I still owned the domain. Automation is great, but you can automate a quick email to a whois registrant address asking “Do you still own this domain? We may have a buyer”.

When we broker a list of domains for a client, we always check the whois to make sure the domains are current, if they are soon to expire, and that they are, in fact, owned by the person offering them for sale. That’s a no-brainer.  I charge a range of commissions for my work, depending on the extent of active promotions I do in reaching buyers for my clients. That’s where I earn my sales commission. Then the expectation of any buyer of domains I represent is that I’m offering a domain name that I know I can sell.

However, it seems that maybe using Afternic or Sedo just means you’re only “borrowing space” from them to use their “listing service”.  You know they aren’t actively promoting your domain unless you pay extra for it. If someone happens on your domain while searching their list of domains, and wants to buy it, there is no “due diligence” made by either Afternic or Sedo to double-check whether you still own the domain after several years.

So exactly WHAT do these listing services do for you in selling your domain? Process the sale? Bring in the buyer? Are these sites actual “auction sites” where they go out and find specific buyers for the category relevance of your domain? Or do they just wait until someone comes to their site and searches to find your domain? Obviously, the latter didn’t work for the two domains I sold that were listed at Sedo and Afternic for many years, because I sold them myself first.

What I don’t like is these messages from them:  (in part)

“The revised User Agreement and acceptable use policies pages apply to all Sedo users and, where applicable, to domains listed for sale in any Sedo user account. Each Sedo user is responsible for maintaining a domain list that accurately reflects domains that they still own and wish to sell. If a user account creates failed transactions due to an outdated domain list, that account shall be suspended at Sedo’s discretion, and reinstated only when it has been reviewed and outdated domain listings have been deleted.”

Oh, OUCH. Now, are we supposed to be “scared” about Sedo making us domainers do their inventory work? Is Sedo taking this hardline stance with domainers who may have thousands of domains listed with them? Seriously? What if those big portfolio holders refuse to do this “demand”?  Sedo makes a good commission on selling their domains, and since most of the input and management of the domains uploaded to Sedo is required to be done the seller, I’d like to know where the 15% commission for Sedo is earned? Is it because we are so blessed to have Sedo list our domains, based on their media presence and solid reputation? However, the main questions is:  Has it reached a point in this industry where the “big guys” have the gall to post that kind of ‘sucker’ rules for their own SOURCE OF SALES COMMISSION INCOME?

And the message from Afternic wasn’t much different.

“Can you take a look at the attached spreadsheet and send back a list of domains you no longer own so I can bulk delete them?  I don’t want to guess on this and remove domains you do still own. Please let me know as soon as possible so we can get your portfolio up to date.”

How about this? For the commission that these listing/auction sites are charging, why force domainers who have listed over 1000 domains with these so-called “auction sites”  to waste their time reviewing every single domain in their catalog that they sold outside the domain listing service that charges domain sellers significant commission?  Why should they force their own clients  to “clean up” their catalog for them? I don’t know about any other domainer, but for me to do this, I’d have to spend hours reviewing each and every domain for whois info and check my database.

Look at it this way:  You have 2000 domains. You list them at five different domain auction/listings websites. You sell a few of those domains on your own. You now have to go through FIVE auction/listing websites, look for the domain you sold, then delete it. You have to remember to do this every time you sell a domain. And the kicker is this:  What if you never listed that domain on ANY of the five domain auctions sites, and you spent hours searching for that domain you just sold, and came up empty-handed?

The job of a listing/auction site is to check and confirm their auction items. It’s not up to domainers to go do it for them, especially when these auction sites are being paid a nice commission when they sell one of your domains.

Are you too busy to do the work your auction site should be doing for you to earn their commission? Probably. I am. Do you think it’s fair that auction sites make you do the “cleanup work” for their inventory when it should be their responsibility to make sure a domain they are about to sell is actually owned by you?

Trying to be logical and fair here. Comments welcome!

Otherwise, I truly like Sedo and Afternic, but let’s stop putting profits in their pockets when they aren’t treating the source of their income with respect and accommodation.

UPDATE FROM SEDO:

Dear Readers,

I was impressed to receive a “go-ahead” from the obviously up-t0-speed executive, Neil Kavenaugh, to reprint some emails from Sedo regarding the task of maintaining a huge inventory of domain names for sale through listings and auctions on Sedo.  I’d like to thank Neil Kavanaugh for having the guts to comment on my harsh post regarding my claim that auction sites were putting the responsibility of maintaining Sedo’s inventory, which for me, negated their right to charge 15% commission on YOUR domains you sell through their “service”.

Neil makes some strong points I have to consider, which means you do, too! Here are his remarks:

“Stephen – feel free to post and thanks for asking.  Please keep in mind the verification process is a challenge.  Between privacy settings, multiple emails per acct and large registrars blocking us from running “bulk’ checks – much of this is manual process that absolutely requires the assistance of domain owners.  Perhaps this will improve in the near future as the industry grows more standardized.

We do run WHOIS checks on our listed domains, but unfortunately many names come back as “unverified” for a multitude of reasons and we must verify with the domain owners.   In this case, Christina had sent you a list of solely the domains that we could not verify through WHOIS(see attached).   We very much need the help of our portfolio owners to verify these instances so that we do not have inventory for sale that is not owned by the listing customer.  While we certainly play a role, verifying ownership is ultimately the responsibility of the owner.  When we sell a name that is no longer owned, it obviously provides a poor customer experience and reflects poorly on Afternic (as well as our industry as a whole).  

We have a hard working Customer Service team here that has a big challenge in verifying the nearly 4 million brokered names on our platform, and your cooperation and assistance in verifying the names that Christina had forwarded to you on the 14th is certainly be a big help.  

Thanks very much in advance!

Neil Kavenaugh
Sedo – Director of Marketplace Sales
Buydomains.com/AfternicDLS

++++++++++++++++++

My response to to my readers about Neil:  Neil is a straight forward no-nonsense Sedo representative in an executive position who clearly and confidently replied to my post. That’s whats we like to see, yes? No “corporate speak”, just answers to our simple questions. Even if we have more questions, or our questions weren’t answered completely, having somebody from Sedo taking the time to address these issues is a legitimate step in CS maintenance by Sedo. This, in my book, is what all domain investors are looking for.

Score: Sedo +1

Thanks Neil, and we welcome any further communications from you regarding Sedo’s policy on keeping clients’ large portfolios maintained by Sedo at the level that Sedo assists in reviewing those portfolios at least annually, to make sure that they are current and updated. If there is a question about it, a simple email to the “past” listed owner for confirmation makes all the difference in the world.

regards.

Stephen Douglas
Successclick.com
“Successful Domain Management™”
LINKEDIN.COM RESUME: Linkedin.com/in/successclick
TitleDomains.com (Domains For Sale Archive)
“Own Your Competition™”

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13 Comments

  1. Bought 32 domains without knowing the first thing about it. Thought you folks would get a chuckle out of it. I have no idea if they are worth a dang or what. Everyone stated I bought them from the worst and parked them with the worst. I an lucky that way. I unparked them all and am going to have to stumble on to my next move. Like the conversation here. I have 0 knowledge of building a site. No I was not drinking or stoned at the time. JOBSAct came out and I started registering all kind of phrases related to crowd funding that were available.

  2. Here is another reason you should carefully handle your own matters:

    A Customer Say Sedo Allows Users To Edit Listings Of Domains They Don’t Own
    http://www.thedomains.com/2012/03/06/a-customer-say-sedo-allows-users-to-edit-listings-of-domains-they-dont-own

  3. This post is absurd. When domains are registered with privacy protection, how would Afternic or Sedo know if you sold the domain and no longer own it? You have listed the domain for sale with these companies and have agreed to the terms and conditions set forward which states that YOU are resposible for keeping upo with your own portfolio.

    These companies list millions of brokered domains for sale. You should keep your own inventory current and update your portfolio yourself when making sales or removing listings.

    Get real and stop being so lazy.

    • @Mike

      Are all domains for sell set at “privacy”? And if they were, did you know you can still reach the seller by just sending an email to the proxy email the privacy service provides?

      If a company tells me that I “have agreed to the terms and conditions set forward which states that (I am) are resposible for keeping up with your own portfolio”, should I worry if I don’t keep track of the 30 different places I’ve put my domains up for sale? And the company that lists my domains for sale does “what” to earn their 15% sales commission? Ummmm… keep my inventory fresh, or at least followup on enquiries by buyers to make sure the domain is owned by the person that says they own it?

      As far as “getting real and stop being lazy”, how about you tell me how many domains you own, where they are listed, and “how lazy” you might be in making sure you didn’t forget that you listed your domain somewhere and you sold it months later on your own, but forgot you listed your domain with that listing service.

      Like I said before, you tell me what the listing service is doing to make their 15% sales commission of the domain when it sells, and I’ll show you companies who go on their “name” which they then sucker all noobie domainers to believe listing with them will most likely lead into a “sale”, when they don’t. Just the fact you mentioned these companies list “MILLIONS OF DOMAINS” alreadly indicates that maybe they shouldn’t be listing 1 million or more domains if they can’t HANDLE THEIR INVENTORY.

      Thank you for your comments though, and I wish you luck with your 150 domains. Let us know how many of them have been sold by the domain listing services, and which ones. When they take out that $1,500 on a domain you sold for $10,000, tell us what you think that $1,500 was for. Was it for the auction/listing site actively promoting your domain to end users? Nope.

  4. I don’t list on Sedo, and don’t have any on Afternic currently. The whole thing is hogwash, and it’s going to be a long shot if I can even survive, but I’m doing my thing separate from auction houses and Adsense.

    If I survive, it will lead the way for others disillusioned with the status quo with the auction houses and Google, two entities which drain the value from our intellectual property – our domains – for their profit. Adsense pays low, and doesn’t offer domain owners much choice to specify content of ads.

  5. I will say we shouldn’t really dog these auction sites as I think they still bring us more benefit than not. Of course they aren’t perfect.

    Sedo & Afternic did develop their own MLS/DLS systems, and they do syndicate our domains to the registration paths of the top registrars, you know where end usuers go when they are looking to register a domain, and then they’ve got it set up so we can have our domains instantly transfered without any special effort. That’s pretty cool and nothing to scoff at. They probably spent a pretty penny to get all that developed and working.

    I think it would be good however if when they published their sales statistics each week if they could report on how effective their MLS/DLS networks are by stating which domains sold via MLS/DLS vs direct through the platform.

  6. Ha sorry Stephen, one of those emails was because of a domain you sold me a ways back. I actually had to call to get the hold removed and have it added to my account, lame right? Also here’s a good one, I had another similar problem with a domain I bought from someone else you and I know and it was still in their account and could not be added to mine. This one was even more interesting because the domain apparently had an offer waiting on it in the other person’s account, and for some time. Apparently the offer was minuscule (although I wasn’t allowed to be told exactly how much it was) so I was able to get the offer canceled through customer support and the domain added to my account.

  7. When adding domains to Sedo, often I receive a message for some of the domains entered that they need to be ‘verified’ before they are added to my account. I assume this ‘verification’ is an automated check to ensure the Whois listed registrant email (or registrant name) matches the one in Sedo’s records?

    If this is the case, then Sedo already has ‘domain owner verification’ software in place — so why would they not simply run this on a continuous basis for all domains listed in their marketplace? Even if it took a full week to run through their entire inventory, that still would mean every account is checked once per week for ‘outdated’ listings (which I assume would eliminate 99.9% of situations where a bid is placed on an ‘outdated’ domain).

    Is the amount of computing/processing power required to run this task so immense that it realistically cannot be accomplished? If the problem is that domainers use multiple email addresses to register domains, surely Sedo could associate several emails to a single account holder? Is there another reason why this sort of ongoing re-verification process is not already implemented & running at aftermarket listing sites?

    Of course, this process would not work for domainers who register with whois ‘privacy’. But I personally feel that off-loading some/all of the task of owner verification onto these domainers is justifiable given their choice to use privacy services.

    Steve

    • @Steve

      Excellent assessment of this problem. All your points are spot on. Thanks!

  8. As the industry matures and becomes more established, I think this will become a non issue. It seems like the domain name marketing is becoming more “streamlined” everyday – much like an MLS type way. Now and in the immediate future however, we are going to have to deal with the annoyance and do it ourselves. Thanks for the article!

  9. @admin said: “Do you think it’s fair that auction sites make you do the “cleanup work” for their inventory?”

    For the sake of conversation, I do. It’s a sore argument between us from before: I think the seller out of courtesy – yes! – should go through his list of five sites and delete the listing from all. First of all, with Sedo, I thought you had to be exclusive, and couldn’t list your site elsewhere . . . you already signed terms saying the domain is listed exclusively at Sedo, so going through the list isn’t an issue with sold domains which are listed at Sedo – you only need to remove them from Sedo.

    2nd: It’s a courtesy to the buyer to remove the domain from lists which could confuse the identity and intention of the domain. In other words, it smears the reputation of a domain slated for development that it is listed at a certain price on some obscure service.

    Finally, in no way should the auction house remove your domain without your permission. If Sedo sent an email asking if the domain is still in your possession of a stolen domain, which email you didn’t receive for some reason, and removed it from the site not having your response and listed it under someone else’s identity, you would blame the auction house.

    You’re in business. There must be some policy you implement with every domain sale, which task is designated to you or one of your workers, to initiate emails or log into auction houses, going down the list, and removing the sold domain. That is a courtesy to the buyer.

    Having said that, I understand Afternic DOES whosis check periodically, and removes listings you no longer own. Perhaps Sedo and Afternic could collaborate more to help keep the lists of big players up to date.

    Just my opinion. Thanx for listening.

    • @Louise

      You didn’t read the article or think through with your answer. People with thousands of domains list them in many places that GET PAID A COMMISSION TO SELL THEM. That’s their business to run it correctly by making sure of what they sell is actually factually up to date. I couldn’t tell you how many people want to sell some of my domains, and where they’re all listed. There is no “policy” I implement when I sell a domain other than to make sure the domain buyer gets the domain quickly and easily. If Sedo sells the domain, it’s handled, but if I sell a domain, I don’t know if it’s on Sedo, and I’m not going to pay someone to check every place where the domain may have been submitted for sale.

      You state “Finally, in no way should the auction house remove your domain without your permission.” The article didn’t mean for Sedo or Afternic to just remove domains if they don’t know who owns them, but it DEFINITELY is their right to “remove” them from their list to sell.

  10. Agree with you, they just get money, doing nothing, I had few thousands domains with theme till 1 year and half ago, than I deleted all the domains from the system, and advised theme to don’t post anymore my domains for sale, last month I received an email for a domain that was still listed on the site at sedo and basically I saold the domain and they get $ 3000 just with one email, I know that the sale was a good sale but its also true that the domain was a good domain and I sold it to don’t upset the buyer, gettin $ 3000 just to send an email it’s not right. they do no promotion, no update, no nothing.

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