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