There have been live auctions of high-value merchandise for over two thousand years, but the somewhat counter-intuitive idea of selling a bunch of online items offline is a relatively recent.

Domain registrar Moniker is the oldest and biggest player in the offline domain auction space, running regular domain name auctions at industry events, like T.R.A.F.F.I.C.  Moniker accounts for the majority of the top sales listed on the DN Journal list.

DomainTools is about to get into the business of real world domain aftermarket auctions, with a nifty imrpovement.  They are going to combine a real-time live auctioneer at the Seattle Domain Roundtable Conference (attending the auction is free of charge) with a simultaneous online auction.  You can bid either at the conference in Seattle, or while logged into their online system.

Both have upcoming auctions.  The Domain RoundTable auction is literally just around the corner -- it's scheduled for August 15th.  Moniker's next "Premium Domain" auction isn't until October, but its deadline for submissions is even earlier! 

This new entrant has some great ideas for imroving the domain aftermarket auction process.  Most importantly, the event combines a "live" real-world auction (which has been shown to bring in a targeted professional domainer audience of likely bidders) with a simultaneous online auction, which can potentially open the bidding to a very large potential audience interested in individual names.  In comparison with Moniker's auctions, the domain selection process was quite transparent.  Other details included:

• Flat 10% commission from the seller (less than many other auction houses like Moniker charge).  "Only" 450 domains (though this seems like a pretty large number) in the auction.  All of them are purportedly "high value" domains -- valued at more than $5,000 by DomainTools staff, a free part of the submission process.
• No long contract.  Jay Westerdal says "We are not going to lock people into contracts for months.  This should be a free market so people are free to come an go after the auction is over and no one bid on the domain."  By the way, high reserve domains do have signed contracts.

Drawbacks

• This was DR's first conference & live auction, so I couldn't assess who would actually attend, or how things would likely go.
• Similarly, some of the systems were being built on the fly, so there were lots of bugs, which tend to make me anxious.  Admittedly, many of the systems were updated based on user comments (which is excellent!), but still it didn't project the highest quality image.
• The first couple of rounds of the "top domains" list didn't look very appealing.  On the other hand, the transparency was awesome, and there were some good last-minute entrants (here is the final list)!
• They wanted us to have a lowish? ($25k) reserve.  DR only wanted a limited number of $100,000+ reserve domains.  Jay's argument is that "The Reserve should be set so that multiple bidders want to go after the domain. By setting the first bid at close to or above a retail price the domain will not sell. So it will not be picked to be in the auction if the reserve stays that high."  And Jay was very helpful in trying to suggest good reserves for the domains of many, many submitters.  But there we had some concern that they had a biased reason to get good domains into the auction with low reserves, so it would look like they caused a "bidding war."

Moniker, one of the five fastest-growing ICANN registrars, as also a leader in domain valuation and sales. Moniker/DomainSystems CEO Monte Cahn started the first internet domain brokerage (NameShop.com) in 1996.  He formed another company, HitDomains, which in 2000 merged with another industry player to become DomainSystems.com.  Despite the dot com's bursting bubble, DomainSystems did well, as company after company was liquidated.  Bankruptcy courts turned to DomainSystems to help them get the most money from their remaining domain assets.  "When many others were stuck, we were hired and that helped fund our business while times overall were tough," Cahn said.

The Big Fish

Moniker/Domain Systems CEO Monte Cahn claims the average retail price realized by sellers who use DomainSystems/Moniker is the highest in the industry by 7X. "Being a one stop shop featuring experience, legal and escrow has allowed us to attract the most valuable domains to sell and that has kept our average sales higher than the others." Cahn added "We also have contacts with the right potential buyers which gives us an edge when marketing high profile domains."

DN Journal has a nice story about how Moniker ushered in the era of live auctions.

Moniker has continued to dominate the "top sale" market this year, with Moniker's auctions (particularly those in conjunction with the T.R.A.F.F.I.C. conferences) placing nearly half of items on DN Journal's list of priciest 2007 sales. 

Moniker was scheduled to hold about 10 auctions during 2007, in a number of targeted industries that effectively use domain names (including geo-targeted domains, and the sex and gambling industries), as well as several domains focusing more generally on "premium domains" at top industry conferences.

Cahn runs an informative (and conveniently archived) weekly internet radio show called Domain Masters. 

Agreements:

Seller gives Moniker the exclusive right to sell the domain during a long period continuing even beyond the auction -- Perhaps to give them a chance to possibly sell your domain to interested parties if it doesn't quite sell at auction?.  Seller is apparently released if the name is not selected for one of the auctions. 

Moniker's fee is 15%. 

Drawbacks

Yet, it's expensive to bid in Moniker's auctions.  Attendance at the auction is by invitation only.  And even getting absentee or one of the limited telephone spots costs around $500, and physically travelling to and attending the conference ($800 for a day) would cost considerably more.  There's a lot of good in this -- the auction room is likely to be filled with a known number of serious players -- but also a downside.  I feel like this format leaves the people who aren't domainers (not interested in lots of domains), but who might have a strong interest in a very targeted domain out of the mix.  Moniker claims to reach out to these people, but I'm sure it would be easier were the barriers a little lower.

I was excited to hear that the first Domain Roundtable Conference turned out well, and that there will be more coming.

1,200 online participants;  300 live audience, what they call the "most viewers of any domain auction ever."  Despite what was clearly a pretty big success, Jay has lots of good ideas for making the next auction even better, including fewer domains, a better live experience, easier to get food & drink, better live chat, and more!  I love the energy and transparency!

First DomainTools Live Auction Results

Total sales were apparently $3,841,528.  Top sales included Invention.com ($500,000), Rebate.com & Rebates.com ($1,000,000), MakeMoneyOnline.com ($95,000), AZ.com ($500,000), Army.org ($99,000), ConsumersGuide.com ($66,750), Cab.com ($110,000), Copies.com ($90,000), FederalStudentLoans.com ($50,750), Event.com ($165,000).

Domain Name Journal reviews the conference.  Sahar at The Conceptualist reviews the Roundtable, too.  And Adam Strong (Domain Name News) makes some very interesting comments in the posting "domain roundtable scorecard."