Pros and cons of converting GoDaddy make offer listings to 7-day auctions

GoDaddy make offer type listing is a popular option among domain sellers, although lots of buyers are not ready to start a negotiation process. Sedo published that a fixed price increase the chance of sale by 30% as compared to make offer listings. Similar can be true at GoDaddy. Additionally, buyers might think about a make offer listing that the domain is not really for sale but dreaming about an unrealistic amount. The opposite is true in case of 7-day listings, where domains will be surely sold if there is no reserve and there is at least one interested bidder. Of course, in this case there is a risk that the domain will be sold for a much lower price than the buyer expect. There is a paid option to add a reserve price for 7-day auction. It is not too expensive, $5, but it can hurt if you don’t sell the domain. And there is a high chance that the domain will go unsold if it is a reserve auction.

Make offer bids can be converted to a 7-days auction within a week

Make offer bids can be converted to a 7-days auction within a week

There is a special feature why make offer type listing can be a good choice. Since GoDaddy makes it available to convert a make offer bid to the first bid of a 7-day auction, make offer type listings can be used to set a “reserve price” for free. Is it a good idea or not? Here we list pros and cons.

Pros:

  • No risk that the domain will be sold for very low amount
  • If there is a second bidder, the listing will appear on the first page of most active listings soon maximizing the listing views

Cons:

  • The domain will be only listed in most active list of current auction if a second bid is coming
  • The high starting price will discourage bidders, lowering the chance of bidding wars and many participants in the auction (similarly to reserve price auctions)
  • If there is no bidder during the 7 days auction, the original buyer placing the make offer bid can feel that the domain does not worth the amount he originally offered and will not buy the domain finally

Conversion can have really great or really bad consequences. The success mainly depends on the second bidder (first bidder during the 7-day auction). If this bidder exists and even better makes a bid during the first days of the auction than it is a great strategy. This also means that the conversion of make offer to 7-days auction should happen at a discounted price to be successful. So if you feel the domain realistic auction value is around $1000, converting a $3-500 offer can be a good strategy, since you can expect activity during the auction and decrease the chances of a big loss. Converting a $800 offer in this case can be a bad strategy, since there is a chance that bidders will be discouraged at this price and even the original offer will go unpaid. I don’t think that converting offers in 5 or 6 figure range can be a good idea, those are not 7-days auction type domains.

I experienced both positive and negative consequences. Once I made a $1000 offer for a domain and the seller countered a $1600. I felt that I don’t need the domain that much, so not accepted or countered this offer. The seller finally converted my offer to a 7-day auction, so he was ready to sell it for $1000. I was outbid in the next day, so the domain appeared in the most active list from the very beginning. The final sale price was almost $3000. So in this case converting the offer to auction was a really successful strategy by the seller. As contrary, I have seen many frozen auctions sold below the predicted price when relatively high make offer was converted.

Take home message: It is very appealing to convert all make offer bids to 7 day auction that you would accept anyway. What can you lose? You can lose a paying buyer and you can lose a chance for selling it at a higher price in a pure 7-day auction.

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