By: Zain

May 7th, 2002

Reader Rating: 9

Domain names have become an asset lately. Once we bought domain names so people could find us online, but now it seems the majority of people buy domain names to sell for huge profits.

Many people start to buy up domain names without giving it any real thought, and end up with a stack of domains that wouldn't even sell for the amount they paid to acquire it in the first place. On the other hand, however, some domains have really great value. Once you realize that you have a domain in your possession that has some worth, you'll probably take some time to consider all the possible ways you can market it to a targeted audience.

When You're on a Winner...

So, you have a real winner in hand, now what? The first thing to realize is that, if you own a good domain name, you needn't be in any rush to sell it. If it holds value now, it'll probably hold value tomorrow, and, most likely, several months or even years from now.

The first thing to consider is who would be attracted to the name? Next, think about what platform you'll use to sell it, and how you'll sell it via that platform. Should media such as:

• auctions,
• sites that list domains for sale,
• word of mouth,
• advertisements, etc.

be used? Today we'll look at selling domain names via auctions, one of the most popular means to offload valuable domains. And one of the best auction sites to sell domain names, or virtually anything, is eBay [1].

Domains can be purchased quite cheaply through some sites, namely Stargate [2] for US $13.95, or Godaddy [3] for US $8.95. These can then be sold on eBay for minimum US$30-40, but if you sell to the right person, on the right day, names can go for much more. This may sound iffy, but if a domain is marketed correctly, the chances of a larger profit will be maximized.

How Do Domain Auctions Work?

If you think auctioning domains sounds like it's worth a try, then your first step is to get set up at eBay.

1. Get Registered

To sell anything on eBay, registration is required. Registration is free, but there is a small fee to list items for sale. Buying is free, and can begin right away -- and there are no eBay fees to buy, only to sell.

In order to sell, as of this writing, details of a credit card must be put on file with eBay. They then verify the credit card (as an anti-fraud precaution), but also to verify rights to the bank account that you, as the seller, have listed. Once verification is complete, you can start to list items for sale.

2. Do your Homework

After you've registered successfully, do a little research to find out where domains should be placed for sale. eBay has dozens of categories, and one is of course the Domain Names directory: .com Domain Listings [4], while the other is the Businesses for sale--> Websites section (if the domain being sold points to a developed site): Businesses for sale ----> Web sites [5].

Now, before you list any items, remember that eBay charges a percentage fee for listing items. Read the details of selling fees here [6].

eBay currently offers an ongoing promotion, as of this writing, in which people can list items in two categories for the price of one. Of course, the more categories in which you list an item, the better chance you'll have to attract a wide, interested buyer audience. The two categories mentioned above are your best bets for selling a domain on eBay.

3. Choose your Listing Type

Next, to help you sell your domain, eBay provides you with different ways to list your auctions, in order to help maximize each auction's exposure to targeted potential buyers.

Featured Listing

For a fee, eBay also offers listings in bold text, and special placement of your auctions at the tops of pages. This is called a Featured Listing, and it costs a total of US$49 to include your auction as a featured listing in both categories. This is a completely optional expense, and I personally use it mainly for domain names that I believe really have excellent sales potential. You can find the featured listing details here [7].

Premium Listing

There's yet another type of featured listing called Premium Listing. Premium listings tend to bring in more bids at higher prices. Results of closed auctions prove it can be worth the fee.

Homepage Featured

Finally, there's "Homepage Featured". I wouldn't recommend that you choose this option. The cost is US$99, and your item will appear on the main ebay.com page. It's expensive and a big risk if you have an auction that starts at US$1 and no one bids on it. A category feature will suffice, otherwise people will have to browse through 26+ pages of that category, and still may not see your listed domains.

Can a non-featured item be successful? Yes, it can. I sold the first site I mentioned above for US$50, but the second time I auctioned it I decided not to buy a feature listing, and thus paid only around US$4 for the sale. As for the second example, I listed that domain again 3 days after the original auction closed, and sold it for US$200.

4. Decide on the Auction Duration

The next choice you'll need to make is the auction duration. As of now, 3, 5, and 7 days are free, while 10 days is not. I always use 7 day auctions, and so do most other sellers. So far, I personally haven't seen a big difference in results between 7 and 10 day auctions, so I recommend using the 7 day option free of charge.

5. Get an Appraisal

Appraisal is an important factor in buying and selling a domain name. Whether the domain is a word in the dictionary, or has been made up, consider having a domain appraised by an appraisal authority. Domain appraisal authorities check out the domain name, the number of words in it, how many words like it appear in search engines, and consider other related factors to determine its monetary value. People tend to prefer domain names that have had an appraisal, to those domain names that don't.

For example, I bought Want2Call.com more than a year ago at namebargain.com for US$12.99 per year, and sold it for a whopping US$460 -- that was for the domain only, nothing else. There was no developed site attached to it, not even a single page: the domain name pointed to the name servers of the registrar (namebargain back then when it had the US$12 promotion).

I know what you're thinking -- 'That's a great profit!' Well, it so happens that after the auction ended, the name was appraised for US$10,000. As of writing this, the current Want2Call.com owner has the domain up for sale, and they're asking for a surprising sum. Even though I made a lot selling the domain after 1 year, I can't help but feel I should have held onto it for a while longer.

If the domain name you're offering for sale has been appraised, post a certificate picture at eBay. The appraisal doesn't have to be from a well-recognized company, any will do. For example, in my last auction, I went over to SwiftAppraisal.com for free appraisal. The appraisal certificate isn't required for the sale, but it seems to help a lot when it comes to getting the highest bid possible for your name.

Beware the Scam

Auctions are an excellent way to sell items, but there is one major downside: scams. Think they're a rarity? Here are two examples from my own experience. First, one bidder placed a bid on a domain name of mine, and then emailed me saying not to leave a negative for them if they are "not able to pay." I emailed them back and asked if that was a joke. They never paid, and gave me a lame excuse. I ended up having to cancel their bid. Not only did I lose that auction with no bids, I lost the US$49 I put in to have it listed as a feature item.

In the second example, another auction ended with a winning bidder, but they never replied. I filed a NBP [Non-Paying Bidder] complaint with eBay, eBay contacted the bidder. They confirmed that the winning bidder's email didn't exist, and suspended his account. Again, I lost US$49.

Ensuring Auction Success

Here are a few hints based on my own experience.

Research is Key

Some items receive bids from multiple bidders while others receive only one bid from a single bidder -- this is the norm. I suggest doing a little study on domain auctions to get the idea of what is common place. Also, I suggest that you go into the main domain name categories, and scroll down to see auctions that have attracted lots of bids (an auction's number of bids is visible on the right side of the page). Once you spot an auction with lots of bids, click on it to read the details. Study it to ascertain how the author managed to attract bids and how he or she presented the information to appeal to the bidder. Believe me, if the potential target is not pleased, they will never bid.

Develop a MiniSite for your Domain

One way to make a domain look really good is to develop it into a small site. Even if this site receives virtually no traffic, it can wow interested buyers, who might buy the domain for hundreds, or even thousands of dollars. Remember, too, that the price a domain sells for will depend on the number and type of people who visit that particular auction -- developing a small site can help you attract more buyers, and jack up your price! True - there are buyers who tend to look for domains attached to sites that already receive a fair amount of traffic, but there doesn't seem to be huge demand of this on eBay, which makes it a great place to sell practically any domain.

For example, I personally bought the domain name http://www.insiderdvd.com from godaddy.com for US $8.95, developed it by affiliating it with a free store at vstore.com. The site had very few hits, but looked well developed, and I put it up for auction at eBay. The auction ended in seven days at a cool US $103.50 -- not too shabby for my outlay of a mere US $8.95, plus the little work I put into it to make it more attractive to buyers.

Sell at the Right Time

Time is another factor that increases a domain name's value. If a domain name has potential, stick with it. The longer you hold onto a domain, the more potential it will have when it's offered for sale. If something can be built out of it, build it and then sell the domain.

What about a domain related to an upcoming event, or a year? If the value of a domain name is directly dependent upon a time frame, then think about selling it at the peak time, rather than holding onto it indefinitely. For example, if there's a new movie coming out, and you have a domain name that's related to it, selling it after a good 5 years won't bring in much. Leverage the movie's success, and market it right away. The hardest part will be deciding whether or not to sell it to the first or second bidder, or wait another day or two.

Choose the Right Type of Auction

1. Buy It Now

eBay offers BIN (Buy It Now), which allows an auction to close as soon as a bidder decides to pay an amount set by the seller. In such an auction, if the first bidder bids the exact BIN amount, it is sold right away and the auction ends.

Most .com domain sellers use BIN. I use BIN on some of my more valuable domains (depending on time), because it's often risky to sell such domains for a large price, and if someone is willing to pay a fixed amount that you've calculated will bring in a decent profit, why not sell? Selling a domain for the BIN price has a lot to do with the type and number of people who visit that particular auction: it doesn't happen often.

If a domain is sold for BIN, great! But if not, settle for the maximum bid price. Personally, I sometimes start bids at US $1, and sometimes at exactly US$49 (if I do a featured listing), so that even if there is only one bid on it, I don't lose much.

2. Private Auctions

Private Auctions hides the identity of bidders at auctions on eBay. This is good if a listing is an item of personal nature, or something that bidders don't want others to know they bought (eg. printed materials or toys of explicit nature).

But the opportunity to hide their identity gives scammers a perfect break. The person who starts the auction is the only one who knows who has bid. I've tried private auctions on a few domain names, and while it did help on occasion, the number of scams was very high. The problems I discussed above occurred on private auctions, and the winning bidders backed out or didn't contact me. So, I don't recommend private auction unless you're sell a domain that bidders would be hesitant to bid on with their identities revealed.

3. Dutch Auctions

What happens if you offer multiple items for sale? In this case, there's the option to sell Dutch. "Dutch" means a person can list more than one item in an auction of the same category and type, but the items themselves don't necessarily have to be identical. People can buy any individual item by letting the auctioneer know which one they want before bidding, so that the item can be reserved. Others would still be free to bid on any other item listed in the auction.

In order to start a Dutch auction at eBay, you have to have received at least 50 feedback comments, and have been registered with the site for more than 60 days. Feedback can be given by people you've sold items to, and/or buyers you've bought from -- and there's no requirement that the feedback has to be all positive. Negative comments can be given when something has gone wrong with the sale, and neutral feedback is given when the sale didn't go smoothly, but did in fact end. For example, a person can have 60 positive feedbacks, 10 negatives, and 1 neutral. That would give you a feedback "rating" of 50. Neutrals don't count with the rating system, but the comments are all made available to anyone to read.

For more information on auction types, read these pages [8] on eBay.

Format Your Listings

A long time ago, I used to list my auctions with plain simple text, no pictures, colors -- nothing. It worked, but didn't exactly help me get great results. HTML tags, on the other hand, can help present the information in a clear way, and grab the user's attention:

• You can use color, bullets, and lists to organize information. However, try not to overdo it -- it can become unattractive very fast.
• Use judgment in designing the auction page. For example, if a black background is created with white text, it will be readable, but some people won't like the dark page, while hardly anyone will have a problem with a white background (as long as text is dark enough to be easily read).
• Appease visitors with a little eye candy.

Avoid Partnerships

Something to watch out for is other eBay auctioneers who contact you to say that their auction is similar, and how about a partnership? For example, a user who claims they have a search engine for sale always contacts me, saying it receives "10k - 20k" visits every 6 hours. They ask if I want to list my site at the top of their shopping listings for US$20 so I can say in my auction schpiel that my site attracts a lot of visitors.

The first few times I received these emails, I sent a normal note saying "No thanks. I'm not interested, and this kind of thing is clearly against eBay rules." Then, when they didn't stop, I emailed them once saying something along these lines:

"Hello. Nice to hear from you again. Let me try to find the default draft email I've saved for you. I think I saved it in my "Reply to Spam" template emails. Let me find it and I'll get back to you."

They didn't contact me again.

Be cautious before doing any partnerships of any kind with a domain name. Chances are it's against eBay rules and regulations.

Keep an Eye on eBay Policy

EBay regularly changes their listing policies. For example, they recently changed the "appraisal" policy for domain names. In the new policy, if a domain name is said to have been appraised, proof must be provide in the form of a link, a text message stating and "quoting" the exact appraisal, or a picture of it the appraisal certificate.

Like I said before, paying for appraisal to a site like Afternic is not a necessity and a free appraisal will do. Simply take a snapshot of the page (CTRL+Print Screen), paste it into Paint Shop or PhotoShop, cut the required image, and upload it to eBay (eBay allows one free picture per auction. There is, however, the option to upload as many pictures as you need to another server. If you upload the pictures to your own website, link to them using html code, and they will show up nicely).

Add a Logo

A simple way to maximize bidding is to place any logo made for the domain name on the auction page. Don't forget to write a note to let bidders know that the logo is included in the auction. It's not required, but a nice logo can really boost the bidding for a domain.

Run Multiple Auctions Simultaneously

It actually helps to run multiple auctions at the same time. If someone likes your auction, but not the particular item they located, they can click on your username to view other auctions that are currently open. Users do this often and frequently end up bidding on other open auctions.

Use the Domain Name in the Auction Title

It's also a good idea to write domain name itself in the auction topic or title, as this makes it easy for people to find your auction in a search, not to mention that people will see the domain name before they click the auction link. People are more apt to visit an auction when they know what you're selling, and while this approach may increase competition between the values of auctions, it also increases traffic to your auction page.

Advertise Free Transfer

If domain transfer is free, mention it with pride in your auction. Put it in big, clear text; it's abbreviated as "FT" on eBay. You might even want to add "FT" to the title of the auction, as well as in the auction details (I usually add it at the bottom of my listings). Explain in detail on the auction page if there is a transfer fee, how the buyer will need to pay for everything. The less confusing your auction is for a visitor, the more likely they will be to bid.

Choose your Platform Carefully

The platform used to market a domain plays a vital role in getting it sold -- and sold at a good price. Online auctions are not magical. It takes time and knowledge of the system to get great results. If one domain is set up for auction today, chances are there won't be a frenzy of people bidding for it, even if it is a great name. I do believe, however, that eBay is one of the best places to sell a domain a get the maximum price for it. My experience with other auction sites is limited, but eBay works well and is quite popular.

Places like Afternic [9] produce quite a few inquiries, but are short on getting domains sold. To see an example of how Afternic works, see this example appraisal and offer [10] for Want2Call.com

This is an example of the area where offers are made: don't make an offer! I don't own the above domain name anymore (or any domains at Afternic.com for that matter), nor do I sell domains under that name. This is just an example of how to set it up. With this particular domain I didn't charge for a transfer, but handed the buyer the account and email addresses associated with it. By giving them the log-in information, I bypassed having to pay a transfer fee (fees usually run anywhere from US$10 to US$35). This brings up another important point:

Set up Each Domain as a Separate Account

Make sure you have a separate account set up for each domain you're selling. This way the purchaser will only have access to the domain they buy, and not other domains in the auctioneer's possession.

Promote the Auction in eZines

Let's discuss ezines briefly. Domain ezines are online sites specifically for domain discussion and listings. Do a search for groups like "Domains for sale" on Yahoo! Groups or Topica.com, subscribe to any of them and start advertising (read their rules first! No one likes a spammer).

One important thing to note is to make sure advertising of domains is allowed in such places, or any place the domain is listed for sale. If a domain is listed at a site that doesn't allow advertising, chances are it will be deleted from that list. Or worse, they may delete the account all together, and place the account owner on a blacklist. A good reputation is important in the line of selling domains -- make it your first priority, as you would in any business.

Good Luck!

This article is intended as a guideline only. I hope it will help you sell domains successfully, or spark an idea or interest in selling domains. Remember, there are no specific rules to follow, but only theory to keep in mind.

As new rules evolve that help both the seller and potential buyers, implement them! There is no one specific solution for domain sales: some work better than others, and it's a process of trial and error. The big task is to continue to search for a better way to sell, to keep improving and coming up with fresh ideas. Any success I've had is because I continuously search for new ideas and avenues. So what are you waiting for? Take a pen, write down all the domain names you own, and see which ones will make both you and the buyer happy!

[1] http://www.ebay.com
[2] http://www.stargate.com
[3] http://www.godaddy.com
[4] http://listings.ebay.com/aw/plistings/list/category11153/index.html
[5] http://listings.ebay.com/aw/plistings/list/category11153/index.html
[6] http://pages.ebay.com/help/basics/e_sell2.html
[7] http://cgi3.ebay.com/aw-cgi/eBayISAPI.dll?Featured
[8] http://pages.ebay.com/help/sellerguide/selling-type.html
[9] http://www.afternic.com
[10] http://www.afternic.com/index.cfm?a=auctions&sa=listing&listID=433305