After all the discussion that took place on Namepros this week with regards to people listing BrandBucket published names, Eric Lyon made a post to make it clear what’s allowed and what’s not.
Eric laid out contingency plans if a domain sells on BrandBucket while still being in a live auction on Namepros.
Eric brought up a good point which was something I tried to touch upon months ago. That Namepros can offer more flexibility when it comes to auctions. I proposed a Seller’s Choice auction, someone auctions a domain thinking they are going to get $200 plus, they get stuck with an auction that closes at $25. They can pay the high bidder $25, the high bid, and keep the domain.
Of course a lot of people might not like that, but if it’s explained up front, then any bidders opposed to this kind of auction can elect not to participate. I remember back in the day Ultimate Bet, offered online poker tables where only 10’s through Aces were dealt, everyone had a full house, it was a bit crazy and some thought it was stupid as hell, others played because they liked something a bit alternative.
Now my seller’s choice auction has not been approved yet, but Eric did lay out 4 examples that are permissible and 4 examples of auction rules that are not allowed.
Within this framework, there is a lot of freedom to add listings that are creative and only possible on a platform with this level of flexibility.
As an open market, it is up to buyers to decide whether they want to participate in an auction given its terms. By participating in an auction, bidders are agreeing to its terms and indicating that the terms are favorable. Once an auction receives its first bid, the terms of the auction cannot be changed, and the auction holder must sell to the highest bidder once the auction concludes. If there is a lack of participation in an auction, then it may be an indication that the market does not approve of its terms. It’s important for auction holders to keep all of this in mind when specifying terms and listen to the market to identify what works best and appeals to bidders.
Here are examples of terms that are allowed and disallowed (forbidden) in auctions on NamePros.
Example 1 (allowed):
If any domains in this auction sell elsewhere, then the winner of this auction will receive the end-user listing price minus the 30% commission fee and minus the $100 logo fee for each sold domain name. The end-user listing price for each domain name is: $1,500 for one.com, $5,300 for two.com, …, $2,500 for eleven.com.
- Explanation: This example is allowed because it is fair, specific, and transparent.
Example 2 (allowed):
The winner of this auction will receive 80% of the end-user purchase price if any of these domains sell elsewhere during this auction. The end-user purchase price is $1,950 for one.com and $2,350 for two.com if sold elsewhere.
- Explanation: The value can easily be calculated or decided in each scenario, the replacement is reasonable, and specific.
Example 3 (allowed):
If one.com is sold elsewhere during this auction, the winner will receive $500 instead. If two.com is sold elsewhere during this auction, the winner will receive $300 instead.
- Explanation: The exact value is specified, predictable, and transparent.
Example 4 (allowed):
If one.com is sold elsewhere, then the winner will receive ten.com instead. If two.com is sold elsewhere, then it will be substituted for eleven.com and eleven.com will be awarded to the winner.
- Explanation: Transparent, specific, and predictable. Easy for buyers to bid with all possible scenarios in mind.
Example 5 (forbidden):
If a domain in this auction is sold elsewhere, it will be substituted for an equivalent domain name.
- Explanation: This example is too vague. It is impossible for the bidders to know the value of what they’re bidding on in the event this situation occurs.
Example 6 (forbidden):
Any domains that sell before the auction has ended will be removed.
- Explanation: Unreasonable. Unfair. The value of the auction can be decreased at any time by removing domains. That would make the “auction” unpredictable and not an auction by any known definition.
Example 7 (forbidden):
In the rare event that this name sells elsewhere before the transaction is completed, this auction is null and void.
- Explanation: Once an auction receives a valid bid, it must sell to the highest bidder once it ends. No exceptions.
Example 8 (forbidden):
I’ll give some of the proceeds if I sell this domain to an end user during this auction.
- Explanation: Obscure. Unpredictable. Does not specify how much will be given. Does not include the end-user asking price. The seller could offer anything, even $1, to the winner, which would be unreasonable and unfair to the winning bidder.