Submitting your domain name to a domain name auction of any kind can be pretty risky. If you submit the domain with a reserve that you would be happy selling with, the risk is decreased a lot but be sure to set your pricing so you are still happy after commission fees are taken out even if there is only 1 bid to meet your reserve.

Lost in the crowd

Most domain name auctions are filled with A LOT of domain names (several hundred) from really good to so/so domain names. Unless your domain name is one of the really good ones or holds a very attractive starting price, your domain name can easily be lost in the crowd as just another domain.

I always think running a No Reserve auction with as low as price you can start with, will attract the most bidders and your chances of it selling for a good price is likely to happen. This can make your domain stick out in the crowd. People get silly during bidding and value often get’s trumped by the want factor. No body likes to lose. Running a no reserve auction clearly holds the highest risk but often will result much better returns then if the domain starts with a higher reserve.

Problems

It is hard to predict problems but websites are prone to problems and since most domain auctions are held online, this has to be on your mind when you submit a domain name for auction. From DDOS attacks, to software failures, they happen. The T.R.A.F.F.I.C. auction was a recent example of this. Live bidders in house and online at the same time but online bidding stopped due to problems with the online bidding software. This is a domain name sellers nightmare! Your domain is coming up, bids start coming in and all of sudden online bidding isn’t working and only house bids are taken… your bidders just took a serious hit and you can’t do anything about it.

Will the auctioneer fumble pronouncing your domain? Lack the passion you have for it? Where is your domain in the line up? 1st, 50th, 250th? You have no control.

Buyers

In any auction, it not only takes one interested buyer, it takes TWO to make the price go up. If you are selling your domain name outright to a buyer, they make an offer. You can counter offer if you choose and help increase the "bid" on your domain. If you are happy, you sell, if not, you pass or wait on another counter offer. Domain auctions basically work the same way, minus the fact you can’t help increase the price during the auction. If you have a reserve set and the buyer meets it and no other bidder feels like jumping in, you are stuck as the seller with no way to help increase the price at that point.

You want to set your reserve at an attractive price to help with bidding but doing this also leaves the chance of 1 bid at your reserve. If this happens,  your likely going to be selling for a price that you wouldn’t be happy with, plus paying a commission.

Timing

This is a hard one. Most of the time when you submit a domain for auction, it is months before the auction even starts. Since you sign a contract after the domain is accepted, you are pretty much stuck with it in the action. A lot of things can change in a short period of time and this could effect your domain name.

Promotion

Many sellers assume that your domain name submitted for auction will be promoted by the auction company to buyers. Not just any buyers, the ones who you think would be the perfect buyers, end users. This doesn’t always happen. Keep in mind that you are likely paying at least a 10% commission. Is submitting your domain and just the fact that your domain is in the auction worth the 10% sales commission if it get’s that 1 bid and sells at your reserve?

If you submit a domain to auction, plan on doing some work on your end to promote your auction! If you are doing this anyway, why not just try and sell it yourself? That’s a good question because you also hold a lot more control.

Worth it?

Yes, some domain names do fetch a nice price at domain name auctions. I have sold several at auction that I was happy with the prices they got. All the domains that I did sell for prices I was happy with were No Reserve auction starting at under $100. I would start them at $0 but most auction services have a minimum price. Often times the domains were the ones with the most active bidding as well.

On the other side, if you run a reserve price (higher reserve) your risks are cut down a lot and I guess it can be worth putting it in the auction but again be sure you would be happy with the reserve price and it selling at that. It happens a lot, 1 bid at the reserve price.

It’s always best to Hold and Wait for the right buyer to come along, putting steps in place that allow interested parties to contact you. When you have people contacting you with interest in purchasing, you hold the upper hand and will likely yield the best price as well with no commission and a lot less risk!