There is one hell of a discussion brewing about the business model of DropCatch.com, the drop catching service is a part of the Reberry empire that includes Huge Domains, Name Bright, Expire.com and a ton of company owned registrars.
One Namepros member started a thread on why he will no longer use the drop catching service, Domain VP posted:
As many of you know, DropCatch.com will catch a domain that has been backordered, and opens the auction open to the public. Great for them, terrible for being a domainer.
There was an auction for a name, which I have a steady buyer for in that niche. Max I have ever paid for a name in that niche was $150, and I easily sold for $1k+.
There was only myself and another domainer that placed a pre order. Over the next 3 days four more bidders came to the table, and the auction quickly went from the initial backorder price to well over $700 USD.
The only bidders were myself, and a 3rd party who did not backorder the domain, but who came along in the final 36 hours.
The profit margin & risk no longer made sense to compete on the name, so I was out.
If this is the evolution of dropcatching, you better get your names where you can and hold on tight. I never thought I would find myself saying, “I wish NameJet caught that one.”
My only consolation is that I cost another party hundreds of dollars, that went to DropCatch of course…
Good for DropCatch, bad for us all. Just something to consider when ordering names.
What are your thoughts?
The thread pretty much went the way you would expect with others expressing their displeasure for the open auction system. Finally someone voices an opposing view, long time member Keith. Keith opened up with:
Dropcatch is smart. Why would any registrar limit auctions to only those with BO?
Don’t hate, just open your wallet if you really want a particular domain imo.
The conversation has gotten hot and heavy since then, between those that believe their work should not be for the benefit of everyone else, i.e. identifying good pending delete domains and placing a back order, they don’t like the fact that anyone can join the auction.
One member Stub, felt that this is the way things are going and that NameJet and Snapnames better get onboard. He posted:
Hats off to DropCatch. They invested in the Registrar infrastructure to become top dog Drop Catcher. They can dictate how they sell, open auction style, which puts the most money in their pocket. It’s the free market at work. I personally think that Reberry’s market is not domainers, but end users. DropCatch seems to transition both, but definitely favors the big spenders. Which most of us small-fry domainers are not. SN/NJ must be hurting bad, not capturing the same amount of domains and then watching them being bid up much higher with DC’s open auction system, while their own closed auction model is not optimizing their revenues.
The competitive edge here is the number of Registrars knocking on the Registry’s servers when a domain drops. It does 2 things. It crowds out the other companies, like SN/NJ, and as a consequence captures more domains. Unless SN/NJ wake up and smell the roses, they are doomed into accepting the new status quo. And if they do that, you will see them moving to an open auction model, as well.
Like everybody else, I don’t like the DC model. But it’s the new reality. Get used to it.
Several members have not agreed with Keith on the topic and he seems to be going it alone in the debate back and forth. Keith has compared the workings of DropCatch to be in line with that of Go Daddy, anyone can participate not just the person who placed a backorder that started the auction at $10, or the first person to place a $12 bid as they thought they found a good domain. Disco Bull has expressed these are two different animals, domain investors have no way of preventing all of the daily inventory on Go Daddy to be auctioned. On the flip side many may not see a pending delete he identified and only became a bidder once it went to auction at DropCatch.
It is a very good and spirited discussion, one which I wish took place more often. It will be interesting to see if NameJet and SnapNames adopt the DropCatch model, or if they will want to continue to appeal to all those now boycotting DropCatch.