Why a Winning Bidder May Become a Non Paying Bidder
Just about every domain sales venue and platform has to deal with non-paying bidders on domain listings, sales, and auctions. It’s happened to me before and I am sure it will continue to happen to others as well. Frankly, it’s frustrating as hell when you reach a deal to sell a domain name and the buyer fails to follow through.
One slimy tactic I’ve witnessed and heard about are people who agree to buy a domain name (whether it’s at an auction, aftermarket venue, or private acquisition), and before paying, they try to sell the domain name to other companies. If they can’t find a buyer for the domain name at a profitable level, they don’t pay for their purchase.
I’ll share an example of this with you. Recently, I was involved in an auction at NameJet, and someone offered to sell me the domain name before the auction was over. The person ended up winning the auction but was a non-paying bidder, presumably when he couldn’t find a buyer. NameJet lost out, and someone who bought it to re-sell it likely lost out since this person probably reached out to many prospects already.
Recourse for the domain owner is generally limited to litigation and/or having that user banned from the platform in the future. Litigation can be expensive, so most people generally let it go without doing much of anything. It’s very frustrating to have a deal fall through, and it’s especially annoying to find out that the buyer has gone out to contact leads for your domain name, potentially hurting your chances of selling the name in the future.
In my opinion, trying to sell a domain name you don’t have the intention of buying unless you can flip it is wrong. If you are new to the domain industry, I caution you to not do this.
Reach out to Elliot: Twitter | Google + | Facebook | Email