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news Domain Name Sales Commissions

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The last week has seen heated debate following the announcement by GoDaddy/Dan that commissions would be aligned across the Afternic, Dan, GoDaddy and Afternic platforms, resulting in savings for many, not all, sales at Afternic, but higher commissions at Dan.

The main NamePros discussion on the topic, started by @MadAboutDomains, now stretches to more than 30 pages, and other threads have looked at related questions such as alternatives.

My aim is to consolidate the key information into one article.

Why Commissions?

Some years ago, I ran a small home-based business. I sold some products directly, but also through craft shops and galleries under a commission arrangement. At first it bothered me to ‘lose’ so much from each sale, typically 30 to 40% commission. But, as time went on, I came to appreciate the convenience of someone handling all the details of selling, and realized that the shops generated far more sales than I would directly.

The marketplaces that sell domain names for us perform a similar service. They need to charge a commission to cover costs such as staffing, web services, development, technology, advertising, payment processing, and more.

What is a reasonable commission depends on what services are offered, and how effective the marketplace is in bringing in buyers. For example, the brandable marketplaces have typically charged higher commissions, since they invest resources in name evaluation and pricing, and spend money advertising individual names, in most cases.

Afternic have an integration with the largest registrar, as well as a 24/7 global network of agents for handling inquiries and negotiations. Dan has not had a similar agent network, using a more automated negotiation and transfer process. It made sense that the commissions were different on the two services, in my opinion.

The Commission Alignment

Up to now, Dan had a standard commission of 9%, while Afternic commission depended on whether the sale was directly through Afternic, or through a partner in their Fast Transfer network. Afternic also had a tiered structure, with higher-value names subject to a lower commission rate. However, for the majority of names sold on Afternic the commission was previously 20%.

There was an optional integrated network for Dan users, whereby names could be listed and promoted through the Afternic network, with a 20% commission for names selling through that extended network.

The announcement on Jan. 4, 2023 aligned commissions across both Dan and Afternic to a simpler structure.

Starting Feb. 1 2023, whether your name is listed at Dan, Uniregistry or Afternic, whether the name sells through the Fast Transfer network or directly one of the marketplaces, the commission is a flat 15%, with no tiered structure.

However, that rate only applies if you have your DNS settings pointed to GoDaddy, Afternic, Uniregistry or Dan servers, see details below. If, for example, you have your names at a parking service, use your own site for landers, or pointed to a different marketplace, your commission will be 25%.

Much of the concern over the commission changes is about the 25% rate. For example, someone with names at an external parking service, or on their own site, but also listed for sale on Dan, saw their commission rate increased from 9% to 25%.

There is still a 5% rate if you use Dan to close the sale with your own lead. We cover that later in the article.

When Do The Changes Start?

The new commission structure becomes active on Feb. 1, 2023, although many investors are already making changes in their listings.

I Just Sell At Afternic – What Does This Mean For Me?

Unless you have high-value names, above $30,000, your situation is improved by the commission alignment. Now your commission rate will be 15% instead of 20%. As long as you use servers pointed within their system, see below, you will pay lower commissions.

I Sell Through Both Dan and Afternic – What About Me?

The situation depends on the fraction of names that sell through Afternic, where you will pay less commission, and Dan, where you will now pay more, 15% instead of 9%, assuming your landers point somewhere in GoDaddy universe. I demonstrate one example below. It is likely that for many there is not much net change.

Example:
Let’s say you sold 10 domains names through the Afternic network at $5000 each, and 10 sales through Dan at $5000. In the past your commission charges on the $100,000 total sales would have been $10,000 (20% x $50,000) on the Afternic sales, and $4,500 (9% x $50,000 on Dan sales), for a. total of $14,500. Under the new aligned system, your commission is 15% x $100,000, or $15,000.​

High-Value Sales

If you typically sell names above $30,000 at Afternic, your commissions go up under the new commission structure. Currently, the tiered commission charges are $4000 plus 10% of the amount over $25,000. At $30,000 the two structures result in the same commission, while below the new commission is less, and above the new system has higher commissions.

Example:
With the previous commission structure, if you sold a name for $100,000 at Afternic, your commission would be $4,000 + (10% x $75,000) = $11,500. After Feb. 1, your commission would be $15,000, or $25,000 if you did not have the nameservers pointed within their system. Had you sold the name under Dan, without integration, the commission would have been $9,000.​

Which Nameservers Qualify for 15% Commission?

To receive the 15% commission rate, you must have your DNS pointed to one of the following nameservers:
  • afternic.com
  • smartname.com
  • uniregistrymarket.link
  • dan.com
  • undeveloped.com
  • internettraffic.com
  • cashparking.com

What If I List Names Through GoDaddy Auctions?

The flat 15% commission applies, or 25% if you use external nameservers.

What About Owner-Negotiated Sales Via Uniregistry Landers?

The flat 15% commission applies.

I Use Forwarding, Instead of DNS

Some prefer to forward their name to the Dan lander, rather than have DNS settings pointed to Dan. This will in the new system incur 25% commission charges.

Will the Dan Integrations at DNWE, Efty Continue?

Yes, since the 5% lead system stays, these integrations will continue unchanged.

What About Cross-Listings from Brandable Places?

There is an option, see terms at the brandable marketplaces, to list names at SquadHelp and BrandBucket on Afternic, and BrandPa allow that as well. Since in all cases the nameservers must point to the brandable marketplace, these are now subject to 25% commission if they sell at Dan or Afternic.

See in Update at bottom a revised policy just announced at SquadHelp regarding dual-listed names.

The Sedo Alternative

As a result of the announcement, some investors are looking at Sedo as an alternative. Sedo MLS service include many of the same registrars as in the Afternic Fast Transfer network, with the notable exception of GoDaddy I recently covered fast transfer networks on the NamePros Blog.

In certain cases, the commission at Sedo is only 10%, but that does not apply to all sales, or to any sale through MLS partners. Here is the situation as described by the @Sedo representative on NamePros:
  • 10% commission if the domain is using BIN OR Buy Now or Best Offer plus using a sedo sales lander or parking layout plus the domain is sold through the Sedo marketplace directly.
  • 15% commission if the domain is using Make offer or sold through a Sedo auction plus sold through the Sedo marketplace directly (you don't need to use Sedo Sales lander or park the domain with Sedo in this scenario)
  • 20% commission applies in any case if the domain is sold through the SedoMLS network and not through the Sedo marketplace directly.
They also offer 3% to process an external domain transfer, see below.

Low Commission Marketplace Alternatives

If looking for a low-cost marketplace, among the alternatives are:
  • DaaZ, with 5% commission for buy-it-now listings and 7% on make-offer or auction transactions. They also offer lease-to-own at 8%.
  • Biix allows you to sell at just 2% commission, with the buyer picking up the Escrow.com fee for handling the transaction. The marketplace has integration with the NameWorth valuation tool, if the seller desires.
Most registrars offer marketplaces at reasonable commissions and immediate purchase and transfer of names registered at that registrar. Some, but not all, allow you to sell names registered elsewhere. The lowest commission is 4% at Sav, and they allow listings whether the domain name is registered at Sav or not.

Keep in mind, however, that there will be much less traffic at any of the other marketplaces, and you will not have the advantage of being part of a registration stream network, such as Afternic Fast Transfer or Sedo MLS. I covered Fast Transfer networks recently on the NamePros Blog.

It is unfortunate that Dofo is shutting down, as it potentially offered a way for end users to find domain names registered at a variety of different marketplaces.

Namecheap Spaceship

Namecheap is in closed beta testing of a totally revamped marketplace and registration platform called Spaceship. The current Namecheap Market is restricted to names registered at Namecheap for the Buy Now segment that is open to user sales. While one can redirect names to the listings, they do not offer true landers.

Apparently Spaceship will be open to names registered anywhere. We do not have a definite launch date. The Namecheap CEO indicated that commissions would be “low and probably flat”

Negotiate Yourself and Use a Lead Closing Service

The commission alignment has caused some to consider maintaining their own landers, negotiate sales themselves, and then using a service to close the deal. This might be especially relevant for high-value names, if the seller is confident in their negotiation skills.

There are a number of options for closing a domain deal with a lead. Here are some of the more popular ones.
  • Dan are maintaining the 5% commission on sales where the lead is imported by the seller.
  • Sedo offer a similar service, with a 3% commission.
  • Escrow.com fees depend on the value of the transaction, how the buyer is paying, and whether standard or concierge service is used. You can use their fee calculator. A sale up to $5000 starts with a 3.25% charge. The percentage decreases for higher-value transactions. Concierge service doubles the fee.
  • It is possible to use SquadHelp to close leads you bring in on standard listings for 4.5% commission.
  • DaaZ offer a service to close sales, at 5% commission.
Other options exist. Some might find completing a sale at Sav a closing option, particularly for names registered there, as the commission is only 4% on Sav Marketplace sales.

SquadHelp White Label Marketplace

Some investors have said they are considering a SquadHelp White Label marketplace for some names. For those who have not used it, here is how it works.
  • Names are standard listings, with no review process, and all TLDs are accepted.
  • The commission rate is 7.5%.
  • The seller sets up the categories, description and image.
  • One can use the SquadHelp AI implementation to produce strong descriptions. It also can suggest additional categories.
  • You price the domain names, and you can set up lease-to-own options if you wish. They also have a system for announcing upcoming price increases, and to have automatically generated limited-time sale prices.
  • You designate one of your domain names to be the name of the white label site, once your white label application has been accepted. Your site has the look and feel of the SquadHelp premium listings, but is restricted to your own domain names.
  • SquadHelp handle inquiries, if you choose that option, and payment processing and domain transfer.
You can read more on how to set up a white-label marketplace here.

Efty and Other Services

The commission changes are causing some, especially those who used 9% Dan listings, to consider movement to a service like Efty. With Efty you pay a monthly charge, but when a name sells, there is no commission charge beyond that payment processing fees. Pricing depends on the number of domain names, and Efty do offer a short free trial period.

There are also services like DNHat, that allow you to create your own landers and marketplace. You can check out DNHat pricing here.

Another service used by some investors, but but some have said development is paused, is Domain.io. You can check Domain.io pricing here.

How Are Investors Responding?

Both on NamePros and on social media, some investors have said they have, or will, move domain names as a response. Some fear future commission increases, or that the 5% commission to close sales at Dan will be abandoned. They object to the 25% commission as a way to force them onto the GoDaddy universe.

Steve A has tracked DNS changes since the time of the announcement. Not surprisingly, the big move has been away from the parking providers.

DNSmoves.png

Changes in DNS Since Time of Commission Announcement. Data by Steve A

You can check for yourself any DNS provider changes using the free Daily Changes tool from Domain Tools.

NamePros Discussions on Commission Changes

The commission changes have been discussed in several NamePros threads.

A Few Thoughts

Here are a few personal views on the situation.
  • As an investor, you want to optimize your net return, not necessarily select lowest commission. A site with higher commissions, but a better sell-through rate and stronger pricing, can be the right choice.
  • I think it is unfortunate that we are not provided with enough analytics to make the right choice. As a minimum, I would like to see each marketplace provide bot-ignored traffic direct from the marketplace separated from that which came through the lander. Knowing that helps you determine how much of the traffic is due to your name, and how much is due to the marketplace, including advertising and network.
  • As you decide how to respond to the commission changes, keep in mind that there is no need to use the same landers for all of your domain names. It may make sense to point different domain names different places.
  • While making changes is a drain on time resources, there is probably virtue in trying different landers from time to time.
  • There is no need to keep consistent pricing across platforms, and I expect more will move to differential pricing.
  • As the CEO of SquadHelp recently posted on social media, it is the product of the sell-through-rate and the net return per sale that is the important metric.
If you have questions about the new commission structure that were not covered in this article, James Iles is the Community Manager for GoDaddy, and can be reached here at NamePros @James Iles, and by email at [email protected].

UPDATES: (Jan 19, 2023)

After this article was written SquadHelp have announced changes regarding commissions on domain names that sell at Afternic but were listed on SquadHelp premium. Key points:
  • If your premium SquadHelp listed name sells for more than $25,000 at Afternic, you will no longer need to pay a commission to SquadHelp. You will, of course, still pay the commission to Afternic.
  • For SquadHelp Premium names that sell for less than $25,000, you will need to pay a 5% commission to SquadHelp in addition to the Afternic commission.
  • As before standard listings, such as those in white label marketplaces, are allowed to be sold elsewhere without any additional SquadHelp commission.
Link: https://www.squadhelp.com/partial-exclusivity-option

In addition, SquadHelp announced today, Jan 19, 2023, complimentary retargeting for a period of 12 months on standard commission names that are priced $10,000 and up, on services including Google, Twitter, Facebook, Instagram – here is the announcement.

Thanks to Steve A for telling me about the DailyChanges tool and giving permission to include his data compilation. Thanks also to @James Iles for clarifying a couple of points with regard to the commission alignment. I appreciate the @Sedo representative being active on NamePros and explaining the conditions for different commission rates.
 
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The views expressed on this page by users and staff are their own, not those of NamePros.

cabotower

Top Member
Impact
2,847
when i have my names at dan only, they will show through the afternic network. if i have my names at afternic only, will they show at dan?
 
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SCP Foundation

Established Member
Impact
68
when i have my names at dan only, they will show through the afternic network. if i have my names at afternic only, will they show at dan?
no
also to show your dan.com names in afternic you need to enable the afternic listing
 
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cabotower

Top Member
Impact
2,847
no
also to show your dan.com names in afternic you need to enable the afternic listing
yes enable must be used. if you list at afternic it will show through the entire godaddy domain world, except dan. very strange. doesn't this make afternic redundant? now there is no advantage to putting high priced names there. we might be better off listing them at sedo.
 
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HappyW

CollectorTop Member
Impact
593
This is definitely the right answer. Although I avoid paying excessive commissions, I have to admit that their high commissions don't burden you with the correspondingly higher RFQ opportunities. However, this does not affect sellers from building their own portfolio sites, and as it stands, raising commissions does not reduce the selection options for sellers, but rather raises the acquisition cost for buyers.
 
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Mister Funsky

Top Member
Impact
24,205
There is a simple simple solution (at least for me).

As we all know, parking does not bring it what it used to do a few years ago due to changes forced upon the parking companies (thanks to another company that bought up and absorbed its competitors).

Now we have another company buying up competitors...and in the process creating a financial penalty for domain investors that do not point their domains to their 'approved' landers .

So, my solution is to continue using Parking Crew and Bodis utilizing the links/ads they provide. Before the increases were announced, when a visitor clicked the banner at the top of the landing page it would take the person to Gddy or Dan where they could make a purchase or inquiry.

Now, when a visitor clicks the link (banner) to inquire about my name, they will be taken to a inquiry page offered thru PC or Bodis. When that offer comes in and I begin the negotiations, up front I will let the interested party know that if they use my 'preferred marketplace' the price I quote is all they will have to pay. Of course they will have the option to choose any marketplace they want to make the transaction, but they will have to pay the difference between the percentage my 'preferred marketplace' charges and the one they select charges.

Additionally, they can pay me direct, (paypal, bank wire, etc) and I will give them a discount on the price quoted.

So, they can pay me 1000 for a name using my 'preferred marketplace' or they can pay 1000 plus 16% additional to use Gddy or Dan or they can pay me directly and save 5%.

I wonder how many will opt for the $160 dollar increase?

The landing page of a domain is THE most important way for a name to be 'discovered'. The pitch about how many others are in the network as a reason for us to turn over our product to their landers is falling on deaf ears...why else would they be penalizing users for not pointing to their approved (non penalized) landers?!? It is because they know the power of the landing page.

(Thank you Bob for another great article!)
 
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From the time I started investing in domain names until now, I only use my own domain for sale landing page, It helped me close many transactions.

Previously, the price of my domain name on Afternic was DomainPrice/0.8, and it was changed to DomainPrice/0.75 yesterday.

I think that if all domainers use Godaddy's DNS, the final result may be that Godaddy monopolizes the entire domain name aftermarket, and his competitors were either bought by him or went bankrupt. This will be a terrible result.

Therefore, I suggest that we can use Godaddy, but we can't completely rely on it.
Escrow.com is a great alternative with low fees and easy transactions, and there are many other alternatives such as SEDO External Transfer

At this time, we should support Godaddy's competitors.
 
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when i have my names at dan only, they will show through the afternic network. if i have my names at afternic only, will they show at dan?
For names listed currently at Dan, one can turn on the integration, and have them automatically listed at Afternic. This does not work for some extensions, since Dan handle more than Afternic. Once the aligned commission structure is in place, one pays the same rate with or without integration.

As far as I know, there is not an automatic way to get all of your Afternic listings also listed at Dan. One could I guess export details and use Bulk Import.

I think there is still good reason to consider having names listed at both Dan and Afternic, rather than just one or the other. Afternic have more marketplace traffic and for eligible names get you in the fast transfer registration path. Dan have more choice in landers, and many consider better landers, and they offer lease-to-own.

This was an alignment of commission rates. I am speculating, but I suspect a more full integration may be down the road, making what you ask easier.

I personally would have preferred Dan and Afternic separate, different approaches, different commission structures. But it does not seem that is the direction this is going.

-Bob
 
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PurpleMan

Top Member
Impact
571
I have decided to point my domain names to Squadhelp's standard listing marketplace because they work just fine as Dan and even offer lesser commission.

Since we can't deny the visibility the GoDaddy network gives our domains, I will have my Fast Transfer enabled domains listed at Afternic for 50% more than I priced it at my Squadhelp lander. Same price goes for domains on the Sedo MLS.

For domains not supporting Afternic's FT, I will list them on Dan at the same price but opting into the Afternic's Integration network.

My cctlds domains will be pointing to Sedo at a lower price compared to how much it is listed on Dan. Note that these names will not be listed on Squadhelp.

In a nutshell, I will not be using any of the GoDaddy's nameservers but will have my domains listed there. If they want more commission, they have to earn it by making my name sell at their marketplace.
 
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BMWMotoRider

Established Member
Impact
1,019
For me, the Buy It Now feature at Afternic landers NS5/NS6 makes it my choice. If commissions go up on 30K+ names at the flat 15%, raise the price accordingly. (Get in on the Inflation game. They raised reg fees-it works for Sellers, too.) I like the lack of negotiating and the funds in my account - usually a week later. (Afternic, try to speed this up, please.)
 
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karmaco

Top Member
Impact
11,721
Thanks for the article for those who can’t seem to understand the changes still. I do however find the tone very slanted towards GoDaddy and even sympathetic which is your right I suppose.

I for one am not enjoying the raised commission on DAN. My prices are going up on the last day of January. As soon as a viable replacement pops up I will be trying it. I believe there are a few in the works.

The biggest injustice here is Monopoly Daddy trying to force name servers their way with the 25% punishment for all outside landers. There is no sugar coating that.
 
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Thanks for the article, Bob. A very helpful summary.
 
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I do however find the tone very slanted towards GoDaddy and even sympathetic which is your right I suppose.
Thank you for expressing your opinion. I tried hard to present just the facts, how it influenced different sellers, along with lower commission options that they might consider from other companies. We all have opinions, me too as you will see in my posts in the discussion threads on this topic, but in NamePros Blog. articles I try to concentrate on information, data, analysis, etc. I am sorry you feel I have failed in that here, but totally respect your right to say so. I gave your post a Thanks.

If you have specific recommendations with respect to changes, by all means share them. We normally only correct/update an article after publication if there are errors or something has materially changed, but if you feel the article was slanted because something important was left out, please let me know. Thanks.
trying to force name servers their way with the 25% punishment for all outside landers. There is no sugar coating that.
As you will know from my posts elsewhere on NamePros in the discussion around this topic, that is exactly my concern.

I personally would have far preferred that they kept Dan as a separate division with a different strategy and lower commissions. I am not sure, even for GD, this alignment will turn out to be a good move in the long term. It certainly is not for some investors.

That said, the change is good for many investors, those who sold names predominantly through the Afternic Fast Transfer network, on domains less than $30,000. They will pay lower commissions, yes in return for using DNS at Dan, Afternic, GD Parking, etc.

As I wrote in the other discussion, I think competition is critical. I hope that alternatives like Sedo, SquadHelp WL, Efty etc. will all thrive, and one or more new player with a disruptive mindset will enter the market and do well.

Thanks once more for expressing your concerns.

-Bob
 
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Note that SquadHelp just announced commission changes with respect to premium-listed names that sell at Afternic. See the Update section at the bottom of the article for the details.

-Bob

PS They separately announced today that they will (for next 12 months) do complimentary retargeting of standard listing (7.5% commission) names on platforms like Google, Facebook, Instagram, Twitter, etc., but only for names BIN priced $10,000 and up. Those are the ads that follow you after you have visited a name.
 
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Thanks Bob

Very comprehensive and super useful information that summerizes all discussions on this subject 👌
 
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Previous to Bob's report I have already taken steps to move my GD domains over to another registrar, not because of the commission (which I wasn't aware of) but the hefty price tag for renewing dot coms compared to the other registrars. I am removing domains away from Dan & Afternic to Sedo's 10% commission Landers.
The parking biz is becoming toxic.
 
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A friend of mine in the UK experimented with Google.sites to promote a domain name and was surprised by the number of inquiries he had. No sales as yet though. This site has only been up for 3 weeks. The searched for keywords he uses are SEO friendly and being a Google website it probably gets more attention than a generic cold parked domain lander.

I told him to try different variations to see if there is a clear winner such as Make Offer vs Buy It Now etc. He posts his email address, telephone number, name, and address.

Will give this one a try, nothing to lose.
 
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lovespecialist6

New Member
Impact
4
Domainers think the value-add of sales platforms is minimal when a sale takes place on a landing page. The domainer effectively brought the buyer. With a buy now transaction, all the aftermarket has to do is process a payment.
 
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equity78

Top Member
TheDomains Staff
TLDInvestors.com
Impact
26,589
There is a simple simple solution (at least for me).

As we all know, parking does not bring it what it used to do a few years ago due to changes forced upon the parking companies (thanks to another company that bought up and absorbed its competitors).

Now we have another company buying up competitors...and in the process creating a financial penalty for domain investors that do not point their domains to their 'approved' landers .

So, my solution is to continue using Parking Crew and Bodis utilizing the links/ads they provide. Before the increases were announced, when a visitor clicked the banner at the top of the landing page it would take the person to Gddy or Dan where they could make a purchase or inquiry.

Now, when a visitor clicks the link (banner) to inquire about my name, they will be taken to a inquiry page offered thru PC or Bodis. When that offer comes in and I begin the negotiations, up front I will let the interested party know that if they use my 'preferred marketplace' the price I quote is all they will have to pay. Of course they will have the option to choose any marketplace they want to make the transaction, but they will have to pay the difference between the percentage my 'preferred marketplace' charges and the one they select charges.

Additionally, they can pay me direct, (paypal, bank wire, etc) and I will give them a discount on the price quoted.

So, they can pay me 1000 for a name using my 'preferred marketplace' or they can pay 1000 plus 16% additional to use Gddy or Dan or they can pay me directly and save 5%.

I wonder how many will opt for the $160 dollar increase?

The landing page of a domain is THE most important way for a name to be 'discovered'. The pitch about how many others are in the network as a reason for us to turn over our product to their landers is falling on deaf ears...why else would they be penalizing users for not pointing to their approved (non penalized) landers?!? It is because they know the power of the landing page.

(Thank you Bob for another great article!)
Good points, thank you.
 
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I can host your for sale lander. My commission is 888%
If your domain sells to the buyer who comes from organic traffic, I keep all the money, plus you pay me 788% on top.
I need money to pay for ai generated 5 star reviews.
 
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Gorilla

Established Member
Impact
595
I love Daaz and have used them before, they have low commissions and they also payout in crypto currencies if needed.
 
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