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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.
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.
Categories: Services
Andrew Allemann has been registering domains for over 25 years and publishing Domain Name Wire since 2005. He has been quoted about his expertise in domain names by The Wall Street Journal, New York Times, and NPR. Connect with Andrew: LinkedIn – Twitter/X – Facebook
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When you say checkout links, is this an affiliate program whereas you sell other names and get 5 percent?
There needs to be a marketplace that when someone comes in through a type-in from your name and then decides to buy a different name instead, they should pay out a decent affiliate fee like say 5 percent of any amount the name sold for. A 30 day cookie and ip tracker should be in place. If that ever happens I would move about almost 2k of my names to that marketplace in a heartbeat.
I may build it myself if no one else will. My offline business has always been built on paying others a very good referral fee because it’s only fair. Why would any marketplace want to keep 100 percent of the commissions from referrals when someone brings them business?
Domain Name Wire is a trade publication for the domain name industry covering topics relevant to domain investors, brand owners, policy makers, domain registrars and registries, and more. Founded in 2005, Domain Name Wire has been cited by Wall Street Journal, New York Times, NPR, and Washington Post. Read More About DNW
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