NamesCon 2014: The Secondary Market Is the Primary Market

Bill Sweetman is moderator, and introduces the panelists.

Reps from Sedo, Domain Names Sales, Namejet, and Paul Nicks from Godaddy, and Mike Berkens from TheDomains.com

Question: Are the best years and the huge paydays of domain 2ndary market behind us?

Brad from Sedo: It’s a supply and demand issue. Supply will go up, and demand will go up. The marketing, education and the communication of these new gTLDs is necessary and important: we need to continue to build the demand. 1and1.com put $200 million into ads that new gTLDs are coming. Godaddy also put a lot of money into the advertising of new gTLDs. Working together to create marketing and education is key, and collaboration is key. Work together to drive the message.

Jeff from Unigestry. He heads a lot about history, history repeats itself. There used to be doom and gloom in 2008 in domain industry. Now there are new opportunities and he is excited.

Matt from Namejet: he agrees with Jeff, the future is much brighter. He likes the abundance of new inventory. There are 1000 new TLDs coming in, and there are going to be more awareness driven by the brands. New speculative dollars, there is going to be a strong aftermarket. The high paydays are still in a bright future.

Paul Nicks from Godaddy: he is half full on everything. Are the people from before going to be making money again? It’s an outlay of money in order to make money. The new gTLDs who are investing and they will be able to get a return. Same with investors. The industry itself is growing, and web is still in a new mode, immature mode. We are laying foundation now for a demand that is going to increase.

Michael Berkens, TheDomains: Supply and demand. The supply is going to dramatically increase. But the demand is long term, isn’t there right now, and you’re not seeing anything reflective in the stats in domain registrations. You’re not seeing growth in the domain registration world. Are there a lot of people who missed the dot com thing and couldn’t take advantage of it? There are a lot of new domainer types coming into the space with the opportunity to build an empire. But it’s not because of built up demand.

Question: Do we still need to make a distinction between secondary market and primary market?

We have the demand coming to the registrar, and we have an idea. There is a need to have a presence. There is a need to move a name from one person to another. You have networks that enable fast transfer, you have the new gTLDs. From an end user perspective, they put in a name, and keyword. You will see a list of names, and price points set. It’s selection that is different. There is no difference between secondary and primary market. We do not need to make a distinction, it only confuses the consumer.

Michael Berkens: if you go to a registrar and search, you will get a list of domains from aftermarket and primary market. The pricing models are going to be different. If you have domains listed in aftermarket, the pricing is different. From $10k to $3k to $10 a year. There is going to be confusion because of the different models that they registries are going to go with.

Paul Nicks: if you see the price points, you will have to rely on the marketer to understand the differences between secondary and primary.

Question: There is a lot of consolidation in the domain marketplace. Is that a good thing for the consumer?

Brad from Sedo: it’s a mixed message and it’s good for the consumer if it benefits them. It can become negative if there is too much consolidation. There still will be a super premium market and it will not reach the standard distribution. There will still be a super premium market with brokers involved. That will fall outside the traditional market.

Jeff: less consolidation the better. when companies get large they can become lethargic, not providing a good consumer experience. Entrepreneurs don’t care too much about who they are paying, they have a budget in mind. Even if it is a primary registration for $3,000 then it’s really a secondary and not a primary. Looking forward, he thinks that the consumer really shouldn’t know. It shouldn’t be two markets.

Question: domain investors and pros and cons of fixed price or buy it now?

Michael Berkens: He has never really been a buy it now price guy. But lately he has been doing some of that. He thinks that it’s beneficial to price it and have pre-price. The super premiums won’t have pre-pricing, but you could have a $10k to $25k to $50k for a fixed price.

Paul: the market is shifting. What we have now is more choice across the spectrum for person wanting to acquire a name. Domain investors need to find out what their return is for the domain, and if you have someone is wanting to buy a domain, and there are buy now vs negotiate you are going to lose business. If it’s not buy now, then the make offer experience adds friction to the process. If you do make offer and negotiate, you are going to lose sales.

Matt from Namejet: it all depends on the domain investor’s goals. If time is on your side, then you can do make offer. But if you need to sell and liquidate it, and you don’t have time, then you need to choose an auction or buy now.

Jeff: domain name sales offers a buy now option and a make offer option. The biggest fear and risk from their clients is that people think that with buy now then they are leaving money on the table. There are impulse buys late at night. The majority are buy it now on their platform. It would be tedious if you had to go through 70,000 domains and price them individually.

Brad from Sedo: a buy now price has a 3x time likelihood of selling over a ‘make offer’. They continue to support multiple transfer methods. For end users, they’re looking to just find a domain. They are pushing their 17 million domains into the eyeballs of buyers. By supporting both buy now and make offer domains, there are greater options. Both are important.

Question: Big ticket sales for English language domains. What is market for Asian word domains?

Matt from Namejet. Foreign language .coms sell well. The 2nd largest foreign customer base is China.

Paul from Godaddy/Afternic: it’s always go back to the consumer. think of the economies in china, india where you have state-sponsored infrastructure where entrepreneurs can compete with a level playing field. If they want to compete, having inroads with the registrars that are aware of their local market is important. The growth is there.

Question: What’s the #1 thing a domainer can do to increase their sales volume;

Michael Berkens: go to the buy it now concept. Go to registrars for pre-registration and see what is coming back if you put in keywords. The make offer is going to be more problematic.

Jeff from Domain Name Sales; you have to look at your own portfolio and have a strategy to meet your goals. Present yourself as a professional and look for a broker if you that’s not your thing.

Paul from Godaddy: get your name listed in distribution networks that get eyeballs.

Namejet: if you have to move them, move them at Namejet that sells as market price.

Michael Berkens: don’t use privacy with good contact information. If you park your names, put up a landing page.

Brad from Sedo: fixed price your name. Leave it make offer or get it into a market with distribution. Create a strategy.