In a recent blog post Flippa announced an important change that should have an important influence on the domain marketplace: the era of unlimited free relists of domains is over. This is a change that was on my list, what should be changed to get back the working marketplace. I think it was the most important one, I also suggested this change to Flippa directly. So I feel really happy now that Flippa realized the devastating effect they caused with unlimited free listing and they are ready to admit and change it.
Most of the comment on the announcement is really angry and complaining about the change but I think they do not really realize that this is a great news for domain sellers indeed. This is a very basic mathematics.
Let’s say there are 74,000 pageviews a day altogether and 7,400 domains in auction (this is a fact on November 3). It means that on average a listing will get 10 views/day. Since Editor’s choice domains will get much more views than upgraded domains which get much more views than regular domains, this average will not tell you too much about a non-upgraded listing but we can safely say that it is well below the average, about 5 views/day. More views, higher prices, it is that simple in most of the time. And why are these low views? Because of that many auctions. And why are there so many auctions? Because of the unlimited free listings. Many sellers listed lots of domains with unrealistically high reserve prices and they list it again and again since it is free and they hope once there will be someone who will buy the domain for any price. But this is not an auction, this is a fixed high price listing, so it should not be supported by Flippa. And they are not supporting it anymore.
If the number of domains in auction will drop dramatically, the number of views on a given auction will grow at the same extent. I hope that the number of auctions will drop below 1,000 and there will be healthy views on the listings again. So sellers can sell their domains again and buyers will find new domains again, not just the recirculating ones. So back to our calculations: if the listed domains drop to 740, than there will be 10 times more, 100 average views/day on a listing. Much more bids, higher price, happy sellers! Bidders will be also happy that they should not browse the same overpriced names again and again.
I would be even more drastic and would not offer a half-price for the relisting but I understand that customers don’t like the immediate changes and Flippa is cautious. I also recommend drastic price increase for the basic listings coupled with lowered success fees. I think the number of domain buyers on Flippa allows maximum several hundreds active listings, not more, and low-quality domains would not be listed on Flippa in this case.
Of course it will take a time until we will see the effect of this change but congratulations to Flippa to take this crucial step to get back a healthy marketplace.