I used to think the biggest problem with Godaddy’s Auctions was the frontrunners and the post renewal of domains after I had won at auction. But after watching the WAN.com auction that had the winning bidder go into hiding I’ve realized there are no qualifiers for people entering high price auctions.
I can’t think of any other auctions other than at the domain conferences that allow anyone to participate in every auction regardless of price. Namejet and Sedo have credit cards and other higher level verification to bid on auctions higher than $5000. Godaddy merely makes someone pay $5 to join in. I’m pretty sure that loss of $5 isn’t going to change the mind of too many people that ended up paying more than they want to for a particular auction. The punishment of losing their account isn’t that big of a deal because you can simply sign up for a new one. One more visa debit card from Wal-mart and you’re back in.
I don’t know the stats, but I would imagine there probably aren’t very many non paying bidders but that’s not the point. There should be almost nil. I like 4.cns procedure of making you put in a few hundred dollars to bid on anything. I imagine that it’s enough money to deter people from walking away but small enough that people don’t have problems having it tied up at an account. Godaddy needs to have a procedure that makes people do something special to bid on auction over a certain amount, maybe $5000. Maybe it’s keep a small amount of money in their auction account. Perhaps it could be like Namejet’s bidder verification program, where you have to submit a government ID along that matches the credit card. Each of these systems will require staff to do manual verification but Godaddy is making millions from selling domains they don’t even own. Most of their auctions involve getting free money because people forget to renew the domains. The cost is merely in the platform. The product is free. Taking that money and applying it to the private auction side would make good sense. Protecting the bidders AND the sellers.
I must point out that the staff at Godaddy do an excellent job calling and managing the auctions, I just feel its time to add one more level of security to participate in higher priced auctions.