A hypothetical scenario that I wrote about last week on Namepros has become a real scenario for one high profile domainer.
Namepros has become the wholesale platform for BrandBucket published and approved names. The one caveat, the name is live on BrandBucket. The worst scenario you want to have happen is for your auction to be at $31 and 80 hours left to go, and you get an email congratulations *******.com has just sold.
I asked this question publicly on Namepros for Eric Lyon to weigh in on what is the procedure if this scenario plays out ?
BrandBucket wants you to push the name right away, and the auction cannot end, and you can’t close the auction. The winner is going to get the sale not you.
Well that hypothetical has come true. I mentioned a big 68 portfolio sale by Doron Vermaat of DnGeek.com.
Well Doron pmmed me tonight, I got one name in the list sold, SchoolPanda.com for $2,995.
I immediately brought this to Eric Lyon’s attention to get the specifics on how the auction should be updated.
Eric told Doron he must sell all 68 names in keeping up with the TOS.
Doron has told me he will honor the sale and the winner of this auction will have a big pay day.
Kudos to Doron for being a standup guy. So this auction could get very interesting.
You get 68 names with the knowledge that one is sold for $2,995 already, there is a commission of 30% that will go to BrandBucket. There is also a $100 logo fee that will be deducted, the net should be $1,990 +
I do want to point out that Eric Lyon brought up an excellent point in our private discussion, the buyer did not bid looking to get cash and domains. He is right maybe someone was bidding and one of the names was going to be slated for development. He is 100% correct.
Now Eric has explained to me that a cash component is not really a new rule, if someone mentioned it up front it would have been allowed. No one in the history of Namepros has ever mentioned a cash component, but with these BrandBucket auctions it needs to be in there so all sides are protected.
- BrandBucket
- BrandBucket’s buyer
- Bidders on Namepros
- Seller
- Namepros Management
Update: Here’s a post that explains how things will look going forward.
G says
You called this weeks ago Ray.
Frank says
Doron Vermaat you are a better man than I am. Namepros could close my account, no way is anyone getting a piece of that sweet sweet cash.
Tex says
That auction just jumped $2,000, do you get a piece Raymond for promoting it ?
I think mr dn geek is very honorable and good on Eric Lyon to let the auction play out with the chance for big money. This is the most interesting auction on np for 2016.
Joseph Peterson says
I agree that Doron is a great guy. That said, Doron still gets paid, as far as I can tell.
Meaning: Whoever wins the NamePros auction will presumably be expecting to get a $3k sale, netting $2k. So the bids at NamePros will end up $2k higher than they otherwise would have. Therefore Doron makes an extra $2k – same as he would have by selling the domain through BrandBucket himself.
It ends up exactly the same either way. Am I wrong?
Raymond Hackney says
Well that is because the the auction is getting promoted Joseph, he had no guarantee that it would go up.
You know that you still have to have the deal close.
Joseph Peterson says
As I see things, this could backfire.
Suppose the NamePros auction goes $2k higher because all the bidders expect to reap a $2k reward immediately after they win. But suppose the buyer on BrandBucket walks away for some reason – maybe because they don’t want to wait.
As a result, the winner on NamePros overspends. Plus, Doron misses a sale. Everybody loses.
If I may, I’d recommend something else. Let Doron sell to the BrandBucket buyer before that customer walks away. Then when the NamePros auction ends, the winner is assured of whatever amount is agreed to. This way, there’s less risk that the NamePros bidder will be disappointed or overspend.
Raymond Hackney says
The domain has already been pushed on BrandBucket, Joseph.
This is what I laid out on Namepros publicly and privately, BB wants the name pushed right away the auction could extend for weeks. Then what ?
Joseph Peterson says
Obviously it’s a bit of a mess. The buyer, BrandBucket, Doron, NamePros moderators, and all those NamePros bidders will have to sort it out.
Good luck!
Raymond Hackney says
@Joseph the sale took place, Doron has made the transaction happen, so the winner will get cash. BrandBucket and their buyer has been taken care of.
Joseph Peterson says
Cool. That’s what I was suggesting.
Joseph Peterson says
Guess I misunderstood
Jacque says
Cheers to you Doron, way to be.
I see why you are so highly regarded RH, working at midnight to promote another domainer’s auction. Cheers all around.
Joseph Peterson says
I feel like a jerk explaining a magic trick, thereby spoiling the impression.
If the winning bidder expects to be paid $2k, then he’ll just pay an amount $2k less than his winning bid. So the winner at NamePros pays what we would have paid without the $2k. He doesn’t get anything extra. In fact, he gets 1 domain fewer.
Meanwhile, Doron will see a final price at NamePros that is $2k higher than it would have been. The winner will just pay him $2k less than the nominal amount. So Doron will, in effect, keep the $2k from the BrandBucket sale.
Nothing against Doron. He’s a great guy. Just explaining how the math works.
Raymond Hackney says
Oh of course Joseph the magic trick you are not privy too, is this was actually not in line with the rules. Namepros will have a new rule about what I brought up. The rules would have been that the sale could not be mentioned and you can’t edit the post to say that it sold and you are getting money. So only after the auction would the winner know there was a secret prize.
The other point is many would not honor the sale I have been at Namepros for a long time and people have not honored an auction because of $100. They say close my account, I don’t care.
G says
Are you just trolling ? Surely you can’t be serious.
Joseph Peterson says
@G,
I’m never trolling. The magic trick is tricky to see. You may have to think about it for a bit.
Joseph Peterson says
@Raymond Hackney,
You’re absolutely right. By mentioning that sale proceeds are included, the price goes up by an equal amount. So the winner at NamePros only benefits if the sale proceeds come as a complete surprise to everybody.
I don’t blame Doron for mentioning the sale, though. I’m sure he thought he was being transparent and even generous.
Raymond Hackney says
I actually had a post started about this, You know what sucks getting an email from BrandBucket that a domain sold and you have it at auction on Namepros. Kind of a Caveat Emptor type post. Then I get the message from Doron and I was like oh man. I did ask him for permission to post about his auction.
Joseph Peterson says
Man, I agree! Having something sell through a BIN in the middle of an auction on another platform is huge headache.
And this other stuff is really counter-intuitive. A paradox really. Just by mentioning that you’ll pay the winner something extra – which feels like a generous thing to do – what in fact happens is that the nominal price goes up. So you end up keeping the money, and the winner loses 1 domain!
I really had to squint to see it.
Nat Hunt says
Raymond wrote: <>
IMO this will not be workable and will essentially function as a big-time penalty on the rare, rare NPer who is a near-saint 🙂 Who among us will give up $1,000+ in order to escape one negative NP review? Maybe you could induce a couple more to follow this rule if threatened by a lifetime NP ban, but that doesn’t seem fair either as there are people who have shill bid, not delivered domains, or not made payment who are still today members on NP if I’m not mistaken.
I think Doron’s solution may be the best way to handle this really rare occurrence.
Joseph Peterson says
Fortunately for Doron, he’ll keep 100% of the proceeds of the BrandBucket sale. Paradoxically, BECAUSE he tried publicly to give them away!
Nat Hunt says
Yeah I was trying to quote Raymond’s comment about putting a Vow of Silence on a seller when this occurs, which I don’t see as a workable solution. But I put the quote between these things: <> and the text disappeared.
G says
He has to ship 67 names and $2,000. That’s the rule.
Joseph Peterson says
No. Doron keeps the $2000.
The winning bidder will just deduct $2000 off the nominal price tag, paying what he would have paid anyway if the $2000 hadn’t been announced. He won’t get any piece of that $2000. And he’ll be minus 1 domain.
Eric Lyon says
We take shill bidding and bad business ethics seriously on NamePros. As soon as we receive a report about such activity and confirm it, their account is immediately restricted from the marketplace for security reasons while we continue our investigation. While each situation can be slightly different and some accounts end up banned from the entire community, there are accounts that will remain restricted from the marketplace but still have access to the discussion forums. It’s important to keep in mind that while some members can not be trusted to do business with, they may still have quality discussion contributions. Discussion forums and Marketplace forums are separate areas of the community and unrelated to one another. If you ever see any unethical business activities, please report it immediately so we can investigate further and get more involved.
Raymond Hackney says
I do think there is another component here, Doron certainly would not be happy with $1,300 for the 68 names auctioned, and that’s where the auction was, so cash for cash does not change the fact he paid $680 just to publish these names and $1,300 is not a price he would or should be happy with. Add in the cash, he should not be happy with $3,300.
Joseph Peterson says
Yeah, but $3300 is a lot better than $1300 + an obligation to send $2000 to the buyer at NamePros.
Where things stand now, Doron would make $3300. The NamePros buyer would pay $1300. And the NamePros buyer would get 68 – 1 = 67 domains.
If Doron had the kept the sale as a surprise for the winner, then he’d be in a MUCH worse position. The NamePros buyer would pay $1300 (because bids wouldn’t have gone up by $2k). Then Doron would owe the NamePros winner $2000. So in that scenario, Doron would actually lose the $2k and only collect $1300.
Doron lucked out. He gets to keep the $2k. And most people will assume that he’s giving it up. In a sense, he meant to.
Nat Hunt says
Gotta agree with Joseph here, Doron should be happy as hell he didn’t start this auction two weeks ago.
But it will be interesting now to watch if the remaining 67 names achieve a premium based on the evidence of this sale and the increased exposure to the auction.
As most of us know, reseller prices are at all-time lows for BB names, but from what I can tell, Doron has an above average history there so this thing will probably go higher.
Raymond Hackney says
That’s what I said to Doron it should help.
The cash cancels itself out, he not happy with $1,400 for 67 names. That’s for darn sure.
h4ck4r says
This was discussed at length in the “So you THOUGHT Flippa was shady” thread at Namepros. When it was brought up that Namepros allowed violation of the dual listing policy – Michael Krell apparently said he was fine with it.
Raymond did bring up that BB should allow “freezing” of names which is a good idea.
Of course – the reality is that Doron will no doubt consider paying taxes on both the BB sale AND the NP sale if that’s important in whatever jurisdiction he’s in. In theory his income will be +$4K due to him spreading the sale around (unless there’s a magic trick there too) … that should cost him a couple of hundred at least.
@Joseph
How do you find the time to write such long considered comments all over the internet?
Raymond Hackney says
You make a good point about the extra couple of hundred.
Nat Hunt says
I would imagine buyer and seller will agree to cancel out the $1,995 to save the Paypal/Escrow fees. But even if they didn’t, Doron could just show $1,995 revenue minus $1,995 expenses = $0 profit on that portion of the transaction. At least in the US, you would not pay taxes on that $0 profit. The only “tax” would be payment fees, but it will not make sense to just send and receive the same $1,995 back and forth.
h4ck3r says
Nat,
.. in the US Doron would still be paying tax on the full amount of the BrandBucket sale which he is not recouping which would be a couple of hundred.
Still – if you were being anal you’d probably show a larger gross income.
In reality? He’s probably not in the US and who knows or really cares how he does taxes 🙂 Recent posts in forums indicate that domainers simply avoid them anyway.
h4ck3r says
Can’t even spell my own blog username!
{depending on timing the prior post is awaiting moderation}
Stub says
Joseph is correct. The winner of the auction now pays the winning bid minus the net profit from the BB sale to Doron and receives only 67 domains. He is not out of pocket except for the 1 domain which was sold at BB. The dumbass(es) here are the bidders who have bid-up the auction by $2k, expecting a windfall of $2k. 2k in, 2k out = No windfall.
I actually haven’t checked the auction, to see what i actually happening. But I suppose, it’ll be the only auction in the history of NP, where the bidders are hoping to pay as little as possible, below the $2k windfall 🙂
It also makes a mockery of NP’s current rules. Which if I broke those rules, I’d have got a bad rep, and stern warnings from Eric. My 2 cents worth, is that NP’s current rules are correct. Auctions should be exclusive to NP’s. If you want to do what Doron has done, and profited from, he should have removed the domains from BB. As I said, just my 2 cents worth of opinion.
Joseph Peterson says
It’s awkward when 1 domain in a portfolio auction sells via BIN on another platform during the auction. Bound to happen again and again over the years.
NamePros can handle this sort of situation in all sorts of ways. It’s definitely not for me to say what’s proper. The moderators must decide.
There’s 1 aspect to this, though, which is bound to frustrate NamePros moderators. Typically the person who purchases through a BIN elsewhere is a retail buyer – i.e. not a domainer.
That sort of customer isn’t going to be patient. They don’t want to listen to a convoluted explanation about how the domain they just bought on Sedo or Afternic or BrandBucket or wherever was simultaneously part of a wholesale portfolio auction in a domainer forum. No, they’ve already paid. And they want what they bought. Plus, those other platforms have pretty strict policies for sellers.
NamePros moderators may hate to admit it, but those other platforms and their retail buyers probably trump a wholesale portfolio auction in a domainer forum. I say that only because domainers understand the situation and can be more flexible.
So maybe the easiest way to handle this situation would be to honor the sale on the other platform, remove the 1 domain from whatever portfolio is being auctioned, and give the high bidder(s) a chance to retract or adjust their last bids.
Obviously, there’s no solution that can please everybody.
Keith DeBoer says
I agree. If a name sells on another platform during a NP auction the auction holder should be required to provide proof to NPs of the sale and the NP auction should be voided. Plain and simple.
I’ve seen NP auctions cancelled for much less consequential reasons. All these other proposed solutions are complicated, unfair and unworkable.
G says
What is unfair ? NP auctions are not cancelled unless it’s a domainerror.
Eric Lyon says
Stub, You can find where we addressed your questions here: https://www.namepros.com/threads/doron-vermaat-is-a-stand-up-guy-brandbucket-name-sells-while-in-auction-at-namepros.963143/page-5#post-5662196
“Correct; there must not be any other auction elsewhere for these domains. The rule is about auctions: domains being auctioned on NamePros must not be auctioned anywhere else at the same time.
The relevant rules in this particular scenario state that the auction cannot change after the first bid, and that the winning bidder must receive what they bid on, according to the terms the seller set at the beginning of the auction.”
Hope that helps,
Stub says
And Doron keeps the profit from the BB sold domain.
Raymond Hackney says
Not really keeping the profit, he has to include the $2,000, to be fair the auction did not have to jump, there could have been an arbitrage play. Let’s also be honest I think Doron was looking for $3,300 + without any sales, that’s less than $50 per published domain.
Orville says
Note the only domain from the portfolio to sell is a keyword domain, not those nonsense made-up words that domainers are sinking their money into. Scambucket is going to cost domainers a lot of money once the years pass and they start to realize.
Frank says
Invented names sell all the time so nice try but you’re wrong.
Orville says
They do sell, but not nearly as well as keyword domains. Selling on BB is like taking your money to Vegas. Sure, you MIGHT win, but you’ll probably lose. Look at Krell, for example. He wins because he has 5k domains that he does pay listing fees for and is guaranteed acceptance. So his cost for those 5k domains is 40k (8x5k). If you’re a regular person, You can add 50k onto that. So 90k. And at best, 1 in 3 domains submitted will get accepted. So that’s another 80k in reg fees that you will will likely not recover 90% of. So now to have 5k domains listed on BB (which they will never allow, mind you), it will cost you something like $170k.
Why won’t they let you have 5k domains listed? Because MK has 5k listed. He has about 12% of ALL domains listed on BB. They will NEVER allow their supply of inventory to increase from 33k to 38k by just one member who isn’t an insider.
Am I the only one who has noticed the acceptance rate is MUCH lower when you submit 100 domains at once, vs when you submit only 10?
BB wins. You lose. End of story. Bookmark my comments and feel free to revisit in 2 years and see for yourself.
X says
Interestingly, SchoolPanda.com is now back for sale but only $995..