I just spent over $500 on a GoDaddy domain auction

I just spent over $500 on a GoDaddy domain auction

...and I got off lightly.


5 min read

This week I bought a domain name for $500. That's the most I've ever spent on a single domain name, and rather out of character for me. But it could have been a whole lot worse...

My wife has a health and fitness brand and when setting it up a couple of years ago, the .com was not available; it was registered back in 2007 or something.

The 2nd best option was the ".life" domain which was kinda relevant to the brand but of course a bit meh like all neo-TLDs.

Every now and then I would check the .com to see if it had become available - and 2 weeks ago I found that it had been listed on GoDaddy auctions after expiring.

The domain itself is a 5-letter .com, so reasonably short and reasonably rare. It's not a real word (at least, not in English), but very pronounceable and with no "weird" letters like X, Q or Z.

I figured that if it kept a low profile it would go under most buyers' radars, and with a prevailing wind we could probably pick it up for a hundred dollars or so.

So I didn't make any bid until a few hours before the end, and that was just in case I forgot to bid later and missed the whole thing (which in retrospect was unlikely since my wife would never allow me to do that).

However, later that evening we went out for dinner with friends and in the fun we actually did completely forget about the auction.

I remembered about it in the car on the way home. It was 10.15pm and I knew the auction ended at 10.*something* but I couldn't remember what.

Panicked, we drove home as quickly (and of course as safely) as possible. On the way we discussed whether worst-case scenario we were willing to spend 100 or 200 bucks on this thing.

We got home with 10 minutes to spare, and the price had shot up to $443 with 4 or 5 other bidders in the fray.

"Well that escalated quickly."

There's an interesting psychology that losing something has more emotional cost than gaining something. Price anchoring also has a funny effect on your mind.

So now the $200 we were willing to spend seemed cheap. The conversation became "what's the absolute maximum we're willing to go up to?"

GoDaddy, like most online auctions, works using proxy bidding. The system will on your behalf automatically bid up to whatever limit you set.

If the price is currently $430 and you set your bid to $500 then the price will jump to $435 and you'll be the highest bidder.

If someone then comes in at $475 the proxy system will automatically raise the price to $480 on your behalf and you'll still be the winner.

So the most sensible strategy in a proxy auction is to decide the most you want to pay for something, enter that amount, and forget about it. Things get real dangerous real quick if you keep adjusting your limit every time you are outbid.

So now we have 10 minutes to actually evaluate how much we're willing to go to.

GoDaddy itself estimated the domain to be worth $3k, but of course that's complete fiction. I checked a few other estimate tools and they came back with numbers ranging from $130 to $400.

I reasoned that if 2 other humans in this auction were prepared to spend $400+ then $300 is a fair base value. That is, if I bought the domain and then changed my mind I could just flip it and get at least $300 back.

I don't see the value of 5-letter .com domains dropping in the future. If anything I would expect short domains to keep rising, because by their very nature there's only a finite supply of them. So owning one would be a fairly safe asset, and the actual cost is only whatever I pay over $300.

Then there is the value that the .com would add to my wife's brand. This is much harder to quantify, but she has huge ambitions for her business and it's hard to argue that a .com doesn't bring trust and credibility - which is super important in the fitness industry.

5 minutes left.

"Would you be gutted if we bid $600 and didn't win it?" I asked my wife.

She immediately said yes.



This is starting to get silly. But I wasn't disagreeing with her.


1 minute to go.

We agreed on $800 and to avoid any last-minute snipers I waited until the last 30 seconds before - to my wife's delight - I entered $1,000. What a gentleman.

Refreshing the page to see what we had done we were relieved to find the auction had risen to just $448. There was no one proxy bidding against us.

But we saw that the auction still had 5 minutes to run! I didn't realise that GoDaddy Auctions adds an extra 5 minutes to the duration if anyone bids at the last moment. My anti-sniping strategy was garbage.

Cue 5 minutes of frantic CMD-R'ing. No-one was coming after us. We'd left them in a trail of dust.

The auction ends still at $448. Whoops of joy, hugs, the works.

I'm a hero, and I only spent half of what it could have been.

(I remembered soon afterwards that the price doesn't include VAT, and as we were paying with a UK card that would slap on another 20% taking it over $500. So I was very relieved it went nowhere near 1k...)

Now we wait 10-15 days (for some reason that I will never understand) for the domain to be transferred, and then my wife's business moves firmly into the .com arena.

And now that I've smashed the $500 glass ceiling, $1,000 will be easy for my next purchase...

It's all about the anchoring.

Thanks for reading! If you'd like more, drop me a follow at twitter.com/hamzaw - I'll be happy to see you there.