Domain buyers have a common habit: they like to bid at the end of an auction, no matter how long it is. They hope that they can silently get the domain for a cheaper price and don’t generate too must hype with early bidding. I am not sure that this is the best strategy, I like to start with a high bid to frighten away low bidders for the domains I like. But not everyone is brave enough to make a proxy bid and typically auctions start very slowly. I have already analyzed what final price you can expect on Namejet based on the number of backorders. And what about Flippa (domains)? As a seller, you would like to know the final price at the very beginning, when 25 days are left and there is no bid, only watchers. Is it possible to find it out how much will you get finally?
The first important difference between Namejet and Flippa from this viewpoint is that there are no backorders on Flippa, but potential buyers can watch the auction and the number of watchers is visible on the seller dashboard only.
I think we can safely say that watchers are very similar to the ones who backorder a domain, so there must be an analogous relationship between the number of watchers and the sale price, similarly what we found on Namejet.
There are different kind of watchers:
- just curious: they find you or your domain interesting, will click on the watch button but will forget it for the next day
- collecting statistics: not intend to make a bid but wants to know the result of the auction in his inbox
- like to bid but not win: not really serious, will make a $100 max bid on a 3 letter .com, just like to be the winning bidder for a great domain for several hours, it is a good feeling
- no problem if win but does not really need it: have money to invest but obviously looking for good deals. They make serious offers, somewhat below the seller expectation
- really need your domain: sellers’ favorite
Sellers tend to think that every watcher is type 5 but unfortunately not. Unfortunately watchers are watchers, you cannot see the type, only numbers. But this is about statistics: more watchers, more type 5 bidders. Anyhow, type 3 and 4 bidders are also great, since they will push your auction to the top of the list and setup a basic price for the serious bidder.
Ok, so there are new watchers day by day but no bids. What you can expect?
Let’s find it out from the past auctions. I have checked the last 200 sold domains. Well, the number of watchers are not public on Flippa, so it is a bit difficult. However, sold auctions can be sorted by the number of watchers and since I have several listings amongst this 200 in every region, there are positions where I exactly know the number of watchers that helps a lot predicting the numbers of the watchers of the other auctions. So I’ve approximated the number of watchers on all listings and I think it is quite accurate. Now let’s see the sale price in the function of the number of watchers!
There is a relationship, for sure. A tipping point can be found at about 70 watchers, there is much more type 5 buyers for these domains. If there are less than 50 watchers, you cannot have high hopes as a seller. Great names tend to have more watchers, so the number of watchers is a sign of the quality of the name. Of course the number of watchers is not the only parameter and there are many-many influencing factors that are responsible for the outliers on the curve:
- reserve price, starting price: $1 starting bid will help collecting watchers but those watchers will not be active when the auction entered into the five figure range. The current price can be considered as a reverse price, so if there is an early high bidder, there will be much less watchers, but all of those will watch the auction knowing that the domain will cost a lot. When you have a $100,000 starting bid on an extraordinary domain (like happened for due.com as I remember), you cannot hope this many watchers but collecting watchers are not the goal of the auction anyway. Minimal number of watchers, one bid above and you won.
- relist: one can increase the number of watchers with continuous relistings but watchers from the previous auction are much less worthy.
- promotion: you can upgrade your listing, get an Editors’ choice badge or have an own traffic flow, all of these will increase the number of viewers and the number of watchers of the auction. However these watchers are not that desperate on average as the ones who found your not promoted domain amongst 5000 another domains in auction. So watchers gained in promotion worths less than self-active watchers.
- new bidders: the most self-dangerous type of bidders, who just read that Rick Schwartz made several million dollars in the past month so they decide to do the same with “overpriceddomain.info”. They are exist and they not evaluate domain name prices as strictly as long term domainers. Huge pocket and motivated new bidders are also risky for domain sellers focusing on business ethics, since it is better to sell a domain for a correct price in long term than making a big profit once and diminishing your reputation.
Taking together the general pattern of the sale price vs watchers curve and considering the influencing factors, one can estimate the auction outcome at the very beginning. Good luck!
Nice post, thanks!