Big Misconception: "We Have No Shot at Selling Domains on Afternic" | DomainInvesting.com

Big Misconception: “We Have No Shot at Selling Domains on Afternic”

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In yesterday’s blog post featuring Afternic domain sales from last week, a reader posted a comment that was similar to other comments that Afternic has been accused of before:

How many of those are their own “buydomains” domains? Probably 90% of them. We have no shot at selling domains on Afternic since they were bought out. We’d have better luck at the lottery.

I performed a brief analysis on the 25 highest domain sales reported last week, to see if the comment is right or wrong. Although I would have expected Afternic to sell significantly more names from Buy Domains’ portfolio because those sales are probably more profitable, I learned that this was NOT the case for the highest value names on the list last week.

In fact, of the 25 largest sales last week, only 14 were “in-house” sales, totaling just 56%.  I went further down the list, and that number didn’t waver much through the first 35 sales either (which is where I stopped).

Here are the top 25 sales from last week, and I bolded the names previously owned by Buy Domains (I used the Whois History tool to see the previous owner):

  • pinkzone.com $12,000.00
  • InternetMarketingService.com $9,200.00
  • incatrail.com $9,000.00
  • artbuzz.com $8,075.00
  • coolgames.org $7,500.00
  • hartwood.com $7,000.00
  • fineworld.com $6,577.00
  • 2822.com $6,000.00
  • dirtgames.com $5,500.00
  • wallo.com $5,488.00
  • dator.com $5,400.00
  • jumpingmouse.com $5,188.00
  • selecao.com $5,000.00
  • eclean.com $5,000.00
  • nucleare.com $4,788.00
  • xmwa.com $4,500.00
  • workhub.com $4,500.00
  • palinfo.com $4,388.00
  • strala.com $4,250.00
  • mysteryflight.com $4,000.00
  • WhitePony.com $4,000.00
  • surnet.com $4,000.00
  • novabiz.com $3,940.00
  • casacaribe.com $3,888.00
  • everydaysuccess.com $3,750.00

Some of the sellers of names via Afternic include YummyNames.com (Tucows), Gregg Ostrick, Traffic Names, HLK Enterprises,Inc., and even Mike Mann’s Domain Asset Holdings.

One thing I noticed is that sellers like Gregg and Ian (of Traffic Names) utilize the same strategy as Buy Domains when it comes to selling. On the landing page, they have links that tell people the domain names are for sale.

People may think Afternic is inclined to sell its’ sister company’s domain names, and they may very well be inclined to do so. However, an analysis of the top sales shows that the company does sell domain names owned by other companies, and it’s a big misconception that they don’t.


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (37)

    Leonard Britt

    Perhaps sales landing pages are a critical component of generating a domain sales lead and one reason why Afternic launched Smartname – so that some of those SEDO-parked domains would migrate over and generate Afternic sales. I do get occasional inquiries for names forwarded to Smartname nameservers. SEDO continues to be the largest sales outlet for me perhaps due to having most names parked there. On the other hand I recently had a lengthy inquiry about a name forwarded to Theme.tv nameservers as the potential buyer was intrigued by the videos and wanted to know how much I was making from those video slots – nada. I probably have a number of alt tld names which aren’t forwarded because I know they wouldn’t make much in parking but perhaps I am missing out on inquiries due to the lack of a sales landing page…

    February 23rd, 2011 at 3:00 pm

    Jamie

    Misconception at least for this time. I had done the same thing you did awhile back and the percentage was MUCH higher (80%-90%+) in NameMedia’s favor.

    I checked a couple times and it was the same.

    One thing that NameMedia does now, which they didn’t before is filter what they report publicly. What are the chances they filter these so the percentage is about 50% that they report now? They could.

    Thanks for doing the work and updating, because I know it’s a pain in the ass using whois history to see past owners on a big list.

    February 23rd, 2011 at 3:03 pm

    BillB

    Sedo does the same thing! They are under the radar about it, but they have their own portfolio of hundreds of thousands of names (DomCollect) and so whatever “bias” you perceive is the same on both marketplaces.

    February 23rd, 2011 at 3:05 pm

      Elliot Silver

      @ Bill

      Can you share some of the Sedo-owned names? I don’t recall ever seeing the DomCollect name in a Whois lookup.

      February 23rd, 2011 at 3:07 pm

    Elliot Silver

    @ Jamie

    I also think more people with quality portfolios (like Gregg and Ian) have listed their names on Afternic.

    Additionally, perhaps some are more inclined to sell or have now built more of a trust with Afternic and priced accordingly.

    If it were me, I would have been very apprehensive about pricing at first, but once a rapport is built, I would be more flexible knowing Afternic is working on my behalf rather than just trying to close deals.

    February 23rd, 2011 at 3:05 pm

    Jamie

    @Elliot,

    I agree. A lot has changed since the last time I did one, so it could be equaled out a lot more now for several factors.

    I just didn’t want people to forget that they are reporting filtered results, which clearly can make a difference.

    February 23rd, 2011 at 3:08 pm

    LindaM

    Im still wondering why a good deal of those names commanded anything like the price they did, I guess the buyers have their reasons to think they got a deal – and I dont doubt that in some cases they actually did.
    If a jumping mouse is next holiday’s must-have toy then I suspect plenty of people will have to eat their hats hehe

    February 23rd, 2011 at 3:13 pm

    BillB

    Elliot, You never see DomCollect because Sedo uses other names so no one can figure out their dirty tricks.

    Check out http://domcollect.com/index.php/contact-us

    Guess what? You dial the contact number and it rings at Sedo!

    February 23rd, 2011 at 3:15 pm

      Elliot Silver

      @ Bill

      What are some of the other company names used by Sedo?

      February 23rd, 2011 at 3:16 pm

    Elliot Silver

    Actually, it really doesn’t matter what Sedo is doing. The point of this article is to show that Afternic does sell domain names owned by domain investors and doesn’t simply focus on selling in-house domain names as some people believe.

    February 23rd, 2011 at 3:22 pm

    Jamie

    Well, Sedo is owned by AdLink Group
    Hi-Media acquired AdLink Group
    AdLink Group is the main share holder of United Internet
    United Internet acquired United Domains
    …..

    I’m sure a lot of tracking would need to be done, but considering that DomCollect states they own “hundreds of thousands” of domain names on their site, it makes you wonder.

    February 23rd, 2011 at 3:35 pm

    Mark

    Hi Ellliot:

    Informative post.

    I have to say though, more “transparency” from both Afternic and Sedo would go extremely far in branding and lifetime value in the eyes of the domaining community.

    February 23rd, 2011 at 3:36 pm

    Elliot Silver

    @ Mark

    I am not sure what type of transparency would be necessary when it comes to domain sales like this.

    February 23rd, 2011 at 3:39 pm

    Estufas

    There is nothing anybody can tell me to make me believe Afternic is not a dirty company….period.

    I know when I smell a rat…..I’ve been in too many businesses in my life to not know.

    I don’t believe what they say, what they do, or anything else. Everything reeks of dishonesty every time I have dealt with them.

    It’s just one person’s opinion, but I have seen first hand what they do to me and others.

    No need to go into details as I have spelled it out many times in other posts, and most pro domain investors know just what I am talking about. It’s no secret anymore about Afternic.

    February 23rd, 2011 at 3:42 pm

      Elliot Silver

      @ Estufas

      I’ve done 6 figures in business with NameMedia companies in the last few years (domain purchases) and have never had an issue… well, one small pricing issue that was resolved amicably.

      February 23rd, 2011 at 3:44 pm

    Dean

    While you mentioned some domainers and “company’s” with large portfolio holdings “YummyNames.com (Tucows), Gregg Ostrick, Traffic Names, HLK Enterprises,Inc., and even Mike Mann’s Domain Asset Holdings.” The real question remains, if private individuals with a handful of domains or small and medium size portfolios stand a chance to sell or is the attention just lavished on more prominent portfolio holders?

    February 23rd, 2011 at 3:54 pm

    Elliot Silver

    @ Dean

    Aside from YummyNames, all of the others are private individuals or companies.

    The one thing to learn from this is that it may be a crapshoot to sell some names, but if you don’t have your names listed with a marketplace, you are probably less likely to sell them.

    February 23rd, 2011 at 3:56 pm

    John

    Speaking of DomCollect/Sedo – Don’t ever, ever , ever place an offer at sedo for a domain name. Whatever you do, try to contact the owner directly. Remember, the seller doesn’t really know who the buyer is the way the system is setup. But Sedo knows who the buyer is and what they’re most likely worth.

    I directed a client/friend to place an offer for a non-generic name at Sedo that was listed for sale. My client/friend had very deep pockets (hundreds of millions – yes its true). At some point during negotiations the name transferred to Domcollect. Guess what? The price of the name rocketed upwards. Scandal? What do you think?

    To make a long story short. My client spent the money twisting an entire company and branding into a different name rather then one dime going to sedo/domcollect.

    BTW- domcollect had put the name up at auction which should not have belonged in the list of generics as it was a non-generic and domainers would have discovered the madeup word was trademarked! Needless to say, there was no bids lolol

    This is what I know about this company.

    You have to wonder what games are played at other marketplaces?

    February 23rd, 2011 at 4:04 pm

    Elliot Silver

    “I directed a client/friend to place an offer for a non-generic name at Sedo that was listed for sale”

    @ John

    If he was a client and friend who was worth a lot of money, why wouldn’t you bid and negotiate on his behalf?

    Always keep your buyers private if you want to give them good representation, unless they insist on doing it themselves. Once you remove yourself from the equation, your client becomes the other guy’s client. If you stay in the middle, you services will always be needed. Additionally, it will make things easier for your friend who might not know the way things work… it’s win / win.

    February 23rd, 2011 at 4:11 pm

    Dean

    Elliot,
    true and quality of domains may play a factor as well, although judging by the latest Afternic list, quality was not a factor to be considered.

    Still a pretty picture it does not paint, you have have zero chances of winning if you don’t play, but if you play, you have a one in fifty million chance of winning?

    The odds seem in disfavor and I suspect there are other powers of persuasion at work here, as to what steers or influences the market and what names ultimately get sold.

    February 23rd, 2011 at 4:12 pm

    Elliot Silver

    @ Dean

    All I can say is that Gregg sold more than one name on that list last week… he must be doing something right.

    February 23rd, 2011 at 4:13 pm

    John

    @Elliot

    There is alot more to the story and yes I’ve bidded on his behalf before on other names. This was different situation. This name was made up and I wouldn’t personally pay even a hundred dollars for it. He took it upon himself to make an offer after seeing it was for sale. I told him not to do it again AFTER it was too late.

    But we were amaze that for this name, it turned out like it did…

    February 23rd, 2011 at 4:19 pm

    Elliot Silver

    @ John

    I agree that it sounds pretty shady… Perhaps you can do a Whois History search to contact the former owner and see how things went down.

    February 23rd, 2011 at 4:20 pm

    Dean

    I don’t want to banter on about it, but that seems to prove my point, what are the odds that one individual would sell more than one domain in a list of domains that is irregular at best and the only one commonality or theme in that list is games?

    February 23rd, 2011 at 4:25 pm

    Dean

    Anyways, I have not completely lost hope in Afternic or their methods, I guess I just need to keep buying more lottery tickets.

    :)

    February 23rd, 2011 at 4:30 pm

    Jeff

    Still more then half. Still a high number imo.

    February 23rd, 2011 at 4:51 pm

    Richard

    I took my names off Afternic, it’s nice they partnered up with some search engines, but I never got an offer there. Most of the interest from my handful of domains come from Sedo, on page inquiry form, e-mail, or the occasional phone call. I’m still kind of disappointed Afternic took my signup fee, while now there is no charge to sign up and sell…

    February 23rd, 2011 at 5:06 pm

    Yaron

    As far as I know, Afternic agents offer alternative names to buyers, and when doing so they always offer BuyDomains names. Maybe some large private investors got their names into that pool as well. So, you send your traffic to afternic, and the agent might offer a BuyDomains name as an alternative…

    February 23rd, 2011 at 5:21 pm

    Elliot Silver

    @ Yaron

    If I call Afternic and say, “Hi, I just saw the listing for YaronsBlog.com on your site, how much is it?” I don’t think it would make sense for them to say, “you should check out “YaronsWebsite.com instead.” It seems that these domain names listed are very specific and a cross-sell of their in-house names wouldn’t make much sense to me when we’re talking about brandable names like the ones that are selling.

    February 23rd, 2011 at 5:24 pm

    Gene

    Although this is a subject I really don’t care much about (as all my sales have been outside of auctions, to date), I must say that the stat you cited (56%) is a bit disturbing.

    If more than half of the names they sell are ‘in-house’ names, that’s a huge conflict of interest IMHO.

    Domainers are constantly analogizing our field to transactions and assets in the offline world, e.g., real estate. But auctions – whether online or offline – are just that…auctions.

    And I’d find it impossible to believe that ‘in-house’ sales by any reputable (traditionally, offline) auctionhouse comes close to that number.

    How soon would the FTC come down on Southeby’s or Christie’s if it was discovered that 56% of the art it/they sold came from its own warehouse?

    Maybe I’m misunderstanding what you mean by ‘in-house’…and if so, please clarify. But if ‘in-house’ means “from their own stockpile,” then I reiterate that it’s a real problem to learn this.

    Gene

    February 23rd, 2011 at 6:27 pm

    Elliot Silver

    @ Gene

    I don’t think you understand the situation. Let me break it down.

    NameMedia is a company that operates (among others) Afternic and Buy Domains. Buy Domains is a company that owns hundreds of thousands of domain names, or maybe more. Afternic is a domain marketplace where people and companies can list domain names for sale. They also have auctions and a brokerage service as well. In addition to other places, Buy Domains lists its names for sale on Afternic, and Afternic sales reps may sell Buy Domains’ domain assets, just like they would sell the domain names I list there.

    Previously, people would speculate that if End User Joe comes to Afternic to buy a domain name, Afternic’s reps may be more likely to try and sell a Buy Domains’ owned domain name rather than privately owned names. The theory was that the profit margins are greater on “in-house” names than on names owned by private investors. My feelings are that this may be true and also private investors are slower to respond to emails from sales reps and may be less inclined to negotiate with the third party.

    When a comparison was done in the past, apparently a significant amount of public sales were from Buy Domains. My report shows that this number is significantly less now. One would imagine Buy Domains’ sales would be high since they have a large percentage of domain names listed on Afternic.

    Make more sense?

    February 23rd, 2011 at 6:33 pm

    Gene

    Thanks for the (very quick, and extremely detailed) response, Elliot.

    I’d be lying if I told you that this makes a whole lot of sense to me; but I’m sure it does to others.

    However, considering that I’ve been domaining since 1997 – and I’m having difficulty ‘getting’ all the intricacies of this labyrinth of relationships you described…why should we expect the general masses or end-users to ‘get it’?

    Regardless, I’ll chalk-up my ignorance to the need for a good night’s sleep.

    Gene

    February 23rd, 2011 at 6:47 pm

    Gazzip

    “Can you share some of the Sedo-owned names? I don’t recall ever seeing the DomCollect name in a Whois lookup.”

    “Elliot, You never see DomCollect because Sedo uses other names so no one can figure out their dirty tricks.”
    ———

    They do show their domains as domcollect in the whois records as far as I have seen, on sedo they’re some of the ones that have the blue telephone symbol next to them. (same as Buydomains names listed on sedo)

    An interesting question would be does that help increase sales, do more people phone up to buy a domain or do more people click the buy now button?

    HolidaysAbuDhabi.com is one of domcollects, if you check the parking page it has phone numbers on it.

    If you search for it on sedo it has a blue phone icon next to it.

    February 23rd, 2011 at 6:57 pm

    andrew

    Afternic charges nothing to list your domains on their network, which syndicates to four of the top 10 registrars.

    So if you don’t want to take advantage of the distribution, fine. But I don’t see any reason to complain.

    February 23rd, 2011 at 10:55 pm

    Some Guy

    I just completed a sale on Afternic that overall I’m pretty happy with. My only complaint is that I had to call after 8 days of the buyer not responding to the transfer instructions and I also left messages for the escrow agent twice, with no response. Buyers sometimes don’t understand the process so it’s important the escrow agent is paying attention, which they obviously weren’t. After a short call the issue was cleared up in a matter of hours which just goes to show how much smoother and faster it could have gone.

    February 24th, 2011 at 12:16 pm

    Joel

    I still don’t see or have experienced any value or return from these marketplaces. I would imagine the far majority of end users (and investors for that matter) start with an idea or a few ideas on what they “want” when it comes to a name. The next step… go to the domain and see if it is available or what is there.

    If taken, I can perhaps see them going to these marketplaces then to get idea based on a keyword or likeness of their #1 – #5 pick. But, even then I would think they still visit the domain.

    My point I guess is with the above comments, I am a strong believer (from experience) that your BEST end user possible sale is going to first visit the domain to see what is there and if it is even for sale. Why anyone would redirect them to a confusing marketplace that shows millions of other names to choose from and then pay a commission for it is beyond me.

    For a number of years now, (for us anyway) the best way to convert is the domain being the sales page. Obviously there are a number of criteria that needs to be met for this to be the best case. (i.e. not so for domains with a lot of backlink traffic, .etc – but most domains don’t have this)

    February 24th, 2011 at 4:40 pm

    Gene

    @ Joel

    You’re exactly right about the auctions adding little or no value for most domainers.

    I deliberately say “most” domainers, because I’m completely convinced that the auction houses only serve the handful of ‘well-known’ domainers in the industry — and themselves, by distributing their own product.

    When I see some of the garbage that goes up on ‘premier auctions’ I’m not sure whether to burst out laughing or get extremely angry.

    But either way, it’s clear that this industry seems completely content with allowing the general public – and most corporate folks – to continue believing that it’s dominated by an incestuous click of former used car salesmen. And there seems to be no interest at all in changing that perception, from what I can see – which (IMHO) is the main reason why domain name valuations will never reach ‘fair value.’

    What a shame that I actually find myself cringing nowadays when I tell my C-level business contacts that I’m a part-time domainer. I’m coming to the point where I may no longer mention that fact. And business practices of the auction houses are a major reason for my revised attitude.

    Gene

    February 24th, 2011 at 8:49 pm

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