To finish off the case study bit, how's it going on the backend?
Before even thinking about running a site like Auctionpus.com, you need to understand that you're selling to sellers and that's always a challenge. If you're not able to generate win-win or no deal situations, you're going to get raped anally.
My profit margins are not exactly something worth bragging about but I knew what I was up against right from day one. One word: sustainability. Selling $45 domains is far more sustainable than focusing on 4-5 fig domains because most people simply can't afford to pay that much for a domain. Again: sustainability.
Here's an example: I offered ConcretePigments.com on Auctionpus.com @ $45 a while back and nobody bought it. About a month or so later, someone made an offer via Sedo (the buyer contacted me) and I ended up selling the domain for $445.
Does this mean that I should stop selling domains for $45 on Auctionpus and that I should wait for buyers to contact me?
In my case no, let me explain why.
There are three (main) types of people who buy domains on the aftermarket:
1) People who do not buy and sell domains for a living and who treat domains as an investment. Some of you guys, for example. You run online businesses (AM, local SEO services and so on) and want to invest some of your Interwebz monies. These folks are in the best possible position to buy and hold. Selling domains is not their main source of income and as a result, they're in a great position to negotiate.
2) Folks who buy exact match domains with the intention of developing them. Once a domain has been sold to a developer, it's usually off the market.
3) Domainers who treat selling domains as a business and, once again, sustainability is the name of the game. Some folks buy domains from sites like Auctionpus.com and contact end users, some folks flip domains on forums or auction sites and some folks (yours truly, for example) actually own auction sites.
This is what Auctionpus.com is all about, selling domains at reseller prices and it’s all a matter of keeping everyone happy. Type 1 investors want domains with long-term potential, type 2 investors want domains with decent exact match search volume or high CPCs and type 3 investors want affordable liquid domains that they can flip for a profit.
Now back to the ConcretePigments.com situation and to the question I have asked:
Does this mean that I should stop selling domains for $45 on Auctionpus and that I should wait for buyers to contact me?
If I were a type 1 investor then yes, waiting for end users to contact me would make sense but as previously mentioned, I treat domaining as a business (type 3) and as a result, have to price my domains accordingly. Running a business (type 3) and investing (type 1) are two completely different things.
Some of you have probably noticed that I'm building an empire, Auctionpus.com has an extremely important role and as a result, running the site is definitely worth it. So far, I own one of the most popular domaining blogs (DomainingTips.com), an auction site (Auctionpus.com) and an escrow company (MiniEscrow.com).
I LOVE selling to sellers, most people think I'm crazy. Some folks say stuff like "dude, webmasters/domainers are cheap bastards, focus on end users" but the thing is, dealing with end users is not as challenging. Yes, selling to sellers is hard. Yes, most people fail miserably. Again, I knew what I was up against right from day one and I fucking love a challenge
Would I do it again? Fuck yeah!
