GoDaddy Domain Backorder Explained

I wanted to do some research into GoDaddy Domain Backorder and the benefits of it and the way some are using it. Here are some things that I found out and somethings that you may want to consider if you are a volume domain auction buyer. Even if you think you know about the Backorder process at GoDaddy, I still suggest you read this article because you may learn something.

Backorder Options

With a GoDaddy Backorder, you can use one for two different “status” domains.

Pending Delete ~ A backorder placed for a domain name that is “expiring” and will be released from the registry.

Based on experience, GoDaddy is likely not your best option for Pending Delete dropcatching type domain names and the success of them grabbing it. They are likely the least expensive to place a backorder (about $20) but GoDaddy doesn’t seem to put a ton of effort into dropcatching. With that said, clearly they do catch some domains on the drop, but it is not all that likely if there are a lot of backorders placed with many of the other popular services like NameJet, SnapNames etc.

In-House expired domain (partner domain). Domain names that are registered with GoDaddy (and resellers) are auctioned exclusively ON GoDaddy Auctions. A simple whois search for the specific domain name will tell you what domain registrar the domain is registered with. If the domain is registered with GoDaddy.com or WildWestDomains and the domain reaches expired status, and is not renewed, it will be auctioned at GoDaddy Auctions.

Here is a timeline to expired GoDaddy domains and when they will reach auction.

Cost

The general pricing for a GoDaddy Backorder is $20.98 for one. Prices start dropping with bulk orders and you can save from 5% to 20% with the amount you purchase.

Included with the purchase?

• Registration Cost (domain renewal if expired in-house auction)
• Free Daily Monitoring
• Free Site Builder
• Free 1 yr membership to GoDaddy Auctions
• Backorder is Valid until successfully used (successful PendingDelete dropcatch or winning an expired in-house auction)

In-house Expired

This is where things can start to get interesting!

If a backorder is placed on a in-house expiring domain name, your backorder will act as “the first bid” and a $10 bid will be placed on your behalf. This backorder can be placed anytime and often is placed prior to the domain hitting auction. Some people (including myself) do not always see this as “the best option” because many people search expired domains by “bids placed”. When a backorder is used, 1 bid for $10 is placed on the domain and it can create a “flag” to others about the domain. Just because there is a $10, 1 bid placed doesn’t mean others will bid though!

A backorder can still be placed/used while a domain name is currently on auction! You can place your “backorder” as your first bid with little time remaining in an auction, like many like to do with “last minute bids”, doing it with a backorder is simply cheaper, than a normal bid.

Something that is NOT explained on GoDaddy’s site that I could find, is a $10 Credit when a backorder is used successfully. Add that with a successful backorder that the “domain registration + ICANN fee” is included, this also included “domain renewal” for expired auctions, the results in your backorder cost being the only cost if you win an expired auction with your 1 bid.

If we do the math with a normal expired auction, and you being the only one bidder. The cost will be like this:

• $12 winning bid
• $12 (about) domain renewal + ICANN Fee
• Total $24

So using a backorder at the cost of $20.98 saves you about $3 per domain won. Not much, but $3 adds up.

Making it add up more?

Some people and or companies buy hundreds of expired GoDaddy Auctions monthly! Getting into bulk pricing and $16.78 per backorder, the cost savings increase all that much more! Instead of $24, then you are talking $16.78 per domain won with no other bidders. Now you are talking $7+ per domain savings!

Even winning an auction with a backorder used, can help lower the final price you pay. With keeping that $16.78 price point in mind and lets say a domain is already bid up to $50. You can still use a “backorder” on the domain and place a higher bid than the current $50 price. Lets say you win the domain auction for $100. The $10 credit and domain renewal cost is included with your backorder, so you technically are still saving. The $10 will be subtracted from your winning bid price of $100. So you are at $90. Plus you do not have the added renewal cost added onto the domain. In the end, you are paying the $16.78 for the backorder, you get the $10 credit and essentially paying only $6.78 for the “domain renewal”.  Even if you have DDC, you do not get $6.78 renewals!

Warning, if you are a GoDaddy Domain Discount Club Member and not buying backorders in bulk, a backorder is really about a wash with your ddc membership savings on domain renewal.

Overall

I think GoDaddy Backorders are your best value to use on in-house GoDaddy expired domain auctions! With the $10 credit and domain renewal cost included with the backorder, you are simply saving money on auctions won. The more backorders you purchase at one time, the more money in the long run you will save!

You do not lose a backorder if you are not successful, so that risk is removed.

Yes, the backorders are “credits”, so you do have to pay your real money, but if you are a active domain buyer / auction player, you will use up the credits! Spending $1,678 on 100 credits may seem like a large investment, but consider saving about $7 per domain you buy and that $7 adds up to about $700 in savings if you did not use the backorder!