What is a Reverse Auction Countdown and How Does it Work?
ReverseAuctionCountdown.com (RAC) is a Reverse Auction website for listing, selling and buying domain names. This unique sale process is fairly easy to understand and use. However, with that said we know it may look complex judging by the length and depth of this page but that's only because we need to cover all aspects in good detail here even though the basic concept and process is relatively simple.
Unlike traditional auctions (such as ebay.com for example) where auction participants bid higher and higher until the auction finally ends with no winning bids or a successful sale, a reverse auction (also known as a Dutch Auction) starts-out with a high or best price a seller hopes to achieve, with its asking price being automatically lowered on a regular and ongoing schedule until the price becomes so reasonable the domain-name or website should sell. The first person who has their bid hit, or is first to click the "Buy Now" button wins the reverse-auction, paying their earlier bid price, or the most recent price.
Reverse auctions offer excellent win-win benefits to both buyers and sellers. A buyer can feel more comfortable since they are not likely a victim of auction adrenalin and probably not bidding against possible fraudulent or fake bidders. The seller can be comfortable with knowing they can achieve the best price they are happy with (especially if a reasonable reserve price is used). Here is an article from Wikipedia about about reverse auctions.
How to Sell a Domain Using an RAC 3-day event, with 24X7 pride reductions at 10-minute intervals
To start a new reverse auction countdown event you first decide on a starting price (which is typically the best possible sale price the seller hopes to get, often based on the domain's intrinsic value in the view of its owner). Keep in mind, the starting price will be the maximum or top-price but in all likelihood seller will not be able to achieve that ideal price because as auction proceeds the asking price is automatically lowered on a pre-set schedule, every 10-minutes, 24X7 for the 3-day duration.
If you feel uncomfortable with the possibility the price will eventually get so low the sale price would be too low for the seller a reserve price may be established when the auction is being first set-up. The reserve will typically be well below the starting price. A common price area many sellers establish for a reserve is roughly somewhere in the range of 2/3 to 1/3 of the initial starting price. The instant the auction hits a reserve price or lower the auction ends and the domain is not sold.
Establishing a reserve is not mandatory but frequently done to avoid selling the name too far under value. Sometimes a seller offers a no-reserve domain auction. No reserve auctions have their pros and cons which usually bring greater activity resulting in potential high sale prices thanks to more potential buyers watching the auction, but may also result in low sale prices well below seller expectations.
Next you decide to start the auction immediately, or the next day, etc up to the maximum time of 3-days. Auctions commence immediately if it was started using the 'Start Auction' button from a related web-page. The domain will be offered for sale at your highest price until the auction starts with price automatically decreasing every 10-minutes, 24-hours a day for the next 72-hours. Thus, you have time to possibly market your auction and letting potential buyers know you are starting a Dutch Auction for your domain-name by giving them the ReverseAuctionCountdown.com URL. While on active auction the domain may be immediately purchased by the buyer using the buy-it now button.
To enhance the auction listing you can also compose an optional description of your domain, and optionally upload a relevant image from the-web or your computer. The description area may be used to cover things such as any extra fees (i.e. Escrow.com or PayPal fees), transfer or webhosting you may be offering if a website is involved. You can also do some marketing here regarding the intrinsic value of the domain and stats you have such as search engine popularity and other data or stats, including traffic sources such as any direct navigation information, typeins, search-engine traffic, links, etc. It's also a good idea if asserting traffic to upload a screen-shot from your statistics program showing traffic data but that's not required.
Once the auction starts it can not be cancelled early by the seller so please be certain you will complete a potential sale. The starting prices or reserve can also not be modified once the reverse auction gets underway. Prices will decline in increments calculated over the course of 3-days (72-hours time period) with the asking price changing automatically every 10-minutes over the upcoming 72-hours based on the difference between your starting price and reserve price. If no reserve is established the calculation is based on starting price vs zero.
How to Buy the Domain Being Dutch Auctioned
An easy and fast way to buy is using the buy it now button. If you are the first to do so you will win the auction. As an option, you can also watch the auction and wait for the price to decline to a lower level but keep in mind you may lose the domain assuming other possible buyers are also waiting as you are and may press the BIN button before you.
If you are not sure how much you will pay, or not able to actively monitor the auction in real-time, you can place a bid which is hidden. Once the reverse auction hits your bid price and is also higher than the seller's reserve, you will win the auction at your bid price, assuming your bid price was the only one at that exact price. If that occurs the bidder who placed the first bid will win the reverse dutch auction. It's a good idea to use odd number bids, especially if you suspect there are other bidders at your price level, or if the auction is near its ending time.
How the Reverse Auction Proceeds
Upon reverse-auction start the asking price declines automatically every 10-minutes. The auction-page will display within a self-updating red box displaying the exact time remaining until the price is scheduled to be reduced again. The degree of the automatic price reductiion increments depends on the ratio of starting price vs reserve price (if set), vs a 3-day schedule. That's assuming there are no hidden bids below the last price but higher than the new scheduled price.
Reserve Price or No Reserve
There are 3 types of reserves, one of which which you may reference in your listing and promotions:
1. No Reserve, meaning auction proceeds until domain sells, or price reaches $0, or listing time expiration.
2. Low Reserve - Reserve price is low at $100 or less, auction proceeds until reserve is hit with no equal or higher bid, domain sells or time expiration.
3. Reserve - Reserve price is higher. auction proceeds until reserve is hit with no equal or higher bid, domain sells or time expiration.
Here is an Example Scenario
A seller starts a reverse domain auction countdown at ReverseAuctionCountdown.com with an auction start price of say $4,000 and a domain reserve price (which reserve is non-disclosed) of say $2,250 - deciding to commence the auction the next day to give him some time to market the dutch auction before the regular price decreases get underway.
Before the reverse auction start-time the seller manages to get several interested parties (perhaps from domain name forum postings, personal promotion, or maybe from a press release). However, all the prospects think the initial asking price of $4,000 is too high so no one clicks the red 'Buy Now' button before the auction begins or quickly upon its start. As the first day goes by with no bids and the asking price automatically declining every 10-minutes, Bidder-1 decides to place a (hidden) bid at $2,300 and Bidder-2 bids $2,200. Bidder-2 does not see Bidder-1's bid since it's hidden, if Bidder-2 decides to not use the Buy-Now option, he is not able to win the auction since Bidder-1 has a higher hidden bid.
After another day passes the reverse price declines to say $2,400. A new participant, Bidder-3, now enters a bid of $2,300. Although he has the same bid amount as Bidder-1 he doesn't know he can't win the auction even if $2,300 is the best bid because Bidder-1 placed the same bid but did it earlier. Later the declining price is say $2,360 and Bidder-1 gets a bit nervous and worried someone else may decide to click-on the Buy-Now button (before the price declines to his original $2,300 bid) so he quickly decides to hit the red Buy-it-Now button and pay the latest price of $2,360. Thus, in this example the buyer is assured of getting his desired domain by paying just $60 more than his initial bid and wins the domain.
Is there a Success Guaranty?
No, we are unable to force sellers to sell and deliver, or buyers to pay for any auctioned item. We rely on honesty of both the buyer and seller to finish the transaction from start to a successful finish. If a transaction is not concluded we ask to be informed about that and the explanation as to what happened here email@example.com. Upon review of the facts, we may suspend the participant who appears to be at fault in a failed transaction.
Auction Fees and Costs
At this time we do not charge any fees or commission to use our reverse domain auction service. However, we may start charging a reasonable monthly flat-fee for membership to use this website. That potential cost should be much less vs typical high domain-name sales costs by website and domain brokers, which fees can range to as much as 25% of the domain sales price.