I was thinking yesterday who the real winners are during live domain auction events and in some cases, it’s the auction service who is the real winner.

Consider these couple of things.

Domainers seem to sell domain names within the domaining circle. This is not good, but it happens a lot. A lot of the domains in the Moniker auction yesterday have been in other auctions already at GreatDomains.com, Aftermarket.com and even other Moniker auctions. Some have sold and entered the circle with a new owner and many have the same past owner.

Not selling to end users will create repeat domains in auctions after auctions.

End users are the key factor to breaking this circle, but it rarely happens. Sellers care and many put in the effort to make end users aware of the auction, but they sit on the sidelines or get distracted for whatever reason and do not bid. Some may just not like bidding in Live auctions.

Moniker had reached out to several end users for this past auction and several hold true interest in purchasing the domains but have yet to pull the trigger! We all can hope they decide to pull the trigger during the extended auction part on SnapNames.com because it gives them a little more thinking time and the bidding is easier IMO.

Here is another thing to consider.

Do the auction services really care if end users show up to bid? I’m sure deep down they do, but when things like I am going to explain happen, I wouldn’t care about the end users if I was the auction service.

I will use the domain name Raspberry.com for an example, because I wrote about it before and have tracked it and I know the exact prices.

Raspberry.com was a pendingdelete domain name in April of this year. Snapnames captured it on the drop and the domain name sold for $16,499 USD. Since Snapnames grabbed it on the drop, I do not think they needed to "share" that profit, because I am pretty sure snap owns the registrar that grabbed the domain.

Profit so far on Raspberry.com $16,000 +

A domainer had purchased the domain via Snapnames. With the TRAFFIC auction coming up, the seller decides to list it for sale in the October auction.

The domain is accepted to the live auction with a $10,000-$25,000 reserve range. As Raspberry.com comes up and the auction goes live, there are bidders and the domain name ends for $27,500 meeting reserve.

So in 6 months the domain gained $11,500 in value from the last auction which is good news for the buyer.

Since the domain sold for $27,500 in the live auction, Moniker charges a 15% sales commission fee which would total $4,125.

The sellers gain dropped from $11,500 down to $7,375 after fees.

Monikers (Moniker and Snapnames are owned by the same company Oversee.net) profit keeps going higher and this is only for the one domain. $16,499 catching the domain during the drop and selling it in April on Snapnames. Moniker accepted the domain into their auction and sold the domain this time for $27,500 while gaining another $4,125 commission. Totaling $20,624 for Raspberry.com so far.

What if Raspberry.com happens to show up again at another Moniker auction in DomainFest 2010? Moniker holds that chance to earn more money and add to the total of $20,624 it already has.

Keep in mind this is just one domain floating around in the circle. I’m sure there are plenty of PendingDelete domains Snapnames grabs, sells and then those customers turn around and offer 15% of the sales price by putting it in another auction. The profit is a little bit less, but add in all the "Partner" domains that this very same process happens.

We as domain name sellers need not to depend on these auctions to sell our domain names. The auction services are making a nice profit as the domains float around our domaining circle. For some it is a win – win.  As an industry, it is not really helping us to keep floating domains from one domainer to another domainer. We need to put focus on finding end users so the domaining circle doesn’t POP!