2023 top stories: GoDaddy’s “commission alignment”

GoDaddy’s Dan.com acquisition continues to reverberate in the domain aftermarket.

2023 top stories: Godaddy's "Commission Alignment"

You might think it’s odd to say that one company changing its sales commissions is a top story of the year. But GoDaddy is the dominant player in the domain aftermarket, and its rate change greatly impacted the domain resale business.

Let’s turn back the clock a bit.

GoDaddy acquired domain sales platform Dan.com last year for about $70 million. One of the first questions people asked was what this would mean for commissions.

Dan charged just 9% to handle payment and escrow for domains. GoDaddy’s Afternic charged much higher but had a declining scale for bigger transactions: 20% on sales below $5,000, 15% of the amount between that and $25,000, and 10% of the amount above that on these sales.

GoDaddy said it was undertaking a “commission alignment” for its aftermarket brands, which also included Uniregistry before it was shut down.

Most people assumed the rate would increase from 9% to somewhere at or below Afternic’s 20% rate.

Instead, GoDaddy dropped a bomb on the industry in January. It said it was raising rates to 25% with no reduction for bigger sales.

But there was a bit of a carrot-and-stick approach to this: park your domains on a GoDaddy-affiliated service and pay just 15%.

So, people who are willing to use GoDaddy’s various landing page services actually pay less for Afternic sales, at least for lower-priced domains.

But it’s bad news for competition. It’s a blow to the many smaller domain sales businesses like Squadhelp and Efty. Domainers are penalized if they use these companies for landers but sell a domain on the Afternic network.

Afternic is also slowly winding down the ability to self-broker domains. Uni is already dead; you can expect this capability to go away on Dan.com, too.

It’s not all bad news, though. GoDaddy has introduced checkout links for Afternic listings that carry just a 5% commission when you find a buyer, similar to Dan’s program. Afternic also now offers lease-to-own transactions.

And if you sell a lot of domains on Afternic that are pointed to GoDaddy landers, you can save a lot of money. This year, I’ve saved thousands of dollars compared to the old 20% rate.

Post link: 2023 top stories: GoDaddy’s “commission alignment”

© DomainNameWire.com 2023. This is copyrighted content. Domain Name Wire full-text RSS feeds are made available for personal use only, and may not be published on any site without permission. If you see this message on a website, contact editor (at) domainnamewire.com. Latest domain news at DNW.com: Domain Name Wire.

Tagged in :