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.
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.
Which Nameservers Qualify for 15% Commission?
To receive the 15% commission rate, you must have your DNS pointed to one of the following nameservers:
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:
Low Commission Marketplace Alternatives
If looking for a low-cost marketplace, among the alternatives are:
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.
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.
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.
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.
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:
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.
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.
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.
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.
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.
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.
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.
- Dan.com Commission Increase
- What are the best alternatives to Dan?
- Now that Dan updated its commission, what is best approach?
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.
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.
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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