Domain sales Made in China.
We’ve previously covered the activity of a popular duo of Chinese domain investors, who are prolific on NameJet.
NameJet users ‘First’ and ‘TwoTwo” are in fact multi-member accounts, able to leverage large funds.
In a humorous approach, we suggested a winning method: pool one’s family funds together. 😀
Funny stories aside, there is a pattern we observed in how First and TwoTwo interact with each other on NameJet.
When one of them is in the lead, there is almost never a leap-frogging of bids by the other.
When a “damn Westerner” bids higher than either one of the two, both First and TwoTwo join in with further bids.
When neither First or TwoTwo make a move past the initial $69 dollar bid, someone else wins the auction.
This leads us to believe that they are in communication with each other.
Hopefully, our observations will help domain bidders on NameJet improve their strategy. 😀
We keep track of Chinese domain sales of short domains, for the .CN, .COM and .NET TLDs, as long as they are between 2 to 4 characters in length.
Here is today’s list of domain names, rather skinny:
bhfx.com
htpw.com
lxtp.com
rlqh.com
wzrs.com
yhpg.com
yrxn.com
First and TwoTwo are not “groups of bidders pooling their cash”. They are proxy bidders on behalf of the winners of the various Chinese auction platforms. Basically there are many Chinese bidders who for whatever reason (most likely language and/or currency export restriction) prefer to bid on expiring names on Chinese platforms. And these platforms then place their bids in the western marketplaces (namejet/snap/dropcatch/etc) on behalf of their leading bidders. It’s an arbitrage business. These Chinese platforms could potentially make a lot of money when there’s a bidding war on their own platform. The actual winner of the auction could be paying $1000 to the winning Chinese platform while the winning bid in the western marketplace could only be $500, and the Chinese platform pockets the $500 difference.
Franky – That’s no different than pushing the price of an auction up with a large crowd behind the bids, each one with their individual incentives and reasons to pay more for a domain.
Not to mention, the auction houses “First” and “TwoTwo” can also keep these domains for themselves.
So yes, it’s pooling, and bullying, of regular individual bidders at NameJet.
I guess you can interpret it that way. But my point was that those bidders are not really all on the same team. If they were all bidding individually on NameJet etc we could see much higher bids. The domain SX.com last year sold for about $500k on NameJet. The same name reached over $1M in bidding on juming.com, which I believe is the platform behind the bidder “first”. That was an ultra sweet deal for them.