news Dan.com to increase comission from 9% to 15% effective Feb 1st 2023

[MadAboutDomains]

Just received this email from Dan.com about commission increases (snippet of email):

Thoughts?

 

[DomainBarracksRob]

.

 

[Dot Superstore]

I think when Godaddy took over DAN we all knew this was going to happen eventually, but don't send everyone an email making it sound like they're doing us a favour. How stupid do they think we are.
I don't think DAN are justifying 15% now, and in all honestly their commission was not always 9%, if you wanted you funds withdrawn to Paypal, anything over $2K(which it always mostly was) was charged at commission of between 10-14% which they never really mentioned before.
I will be moving my domains out of DAN eventually, there has gotta be some other half decent marketplace with commissions of 10%. SEDO has not been lucky for me, too many non-payers and fakers.

 

[NameInbox]

@Dot Superstore
Daaz - like Dan in India, but don't tell GoDaddy

p.s. I sold there on xx all was fine, auctions were useless for me

 

[domaindevil]

Another option is to raise prices by 7% on all domains? That way you would still end up getting roughly the same as before Godaddy and Dan's dick move?

 

[bmugford]

Another option is to raise prices by 7% on all domains? That way you would still end up getting roughly the same as before Godaddy and Dan's dick move?

I often hear that as a common response to rising commissions, sure it works in theory...the problem is a domain is far more likely to sell the lower the price is, so if you need to add extra fees into the price it is less likely to sell.

Brad

 

[NickB]

The worrying thing is they probably won't be stopping anytime soon on the acquisition side of things....

Since 2012 they have bought or merged with at least 1 company - normally 2+ per year........

Which leads on to this year.....they most likely will be looking at 1+ acquisitions this year - will it be on the domaining side or other parts of the business?....time will tell

Things are not going to improve in the Godaddy / domainer relationship..... if anything it will get worse going forwards....

 

[domainer111]

https://www.justice.gov/atr/antitrust-laws-and-you

Antitrust Laws And You​

Many consumers have never heard of antitrust laws, but enforcement of these laws saves consumers millions and even billions of dollars a year. The Federal Government enforces three major Federal antitrust laws, and most states also have their own. Essentially, these laws prohibit business practices that unreasonably deprive consumers of the benefits of competition, resulting in higher prices for products and services.
The three major Federal antitrust laws are:

• The Sherman Antitrust Act
• 
  
• The Clayton Act
• 
  
• The Federal Trade Commission Act.

The following information on these laws comes from the Antitrust Enforcement and the Consumer guide.

This makes sense. But like so many laws ... do they get enforced at all?

 

[Future Sensors]

Another option is to raise prices by 7% on all domains? That way you would still end up getting roughly the same as before Godaddy and Dan's dick move?

That's how many retailers are currently reasoning. But at some point your prices may be too high and your sales will decrease. Where your optimal price point is, is different for everyone, but think about this when pricing your domains.

Incidentally, it is interesting that DAN has not used the word "inflation correction" anywhere as a reason for the commission increase, as currently all companies seem to get away with it, especially in Europe.

 

[NickB]

Incidentally, it is interesting that DAN has not used the word "inflation correction" anywhere as a reason for the commission increase, as currently all companies seem to get away with it, especially in Europe.

Are American companies using this excuse? If not, that's probably why as Godaddy is......

 

[domaindevil]

That's how many retailers are currently reasoning. But at some point your prices may be too high and your sales will decrease. Where your optimal price point is, is different for everyone, but think about this when pricing your domains.

Incidentally, it is interesting that DAN has not used the word "inflation correction" anywhere as a reason for the commission increase, as currently all companies seem to get away with it, especially in Europe.

Just thinking that domain names and valuations are not an exact science and it is hard to price domains as is. I doubt that a 7% increase in the lower price ranges (4 figures) would change that much?

 

[Acroplex]

@James Iles @Doron Vermaat has there been any official word about changes to commission for DAN API Integratiors, e.g. Efty and Domain.io?

If you guys at Domain.io don't already know, I wonder how much of a slap job this price increase plan was at GoDaddy! I mean, zero feedback to affected API integrators? Less than 30 days notice to the platform users?

Perhaps they were trying to beat the February report of Q1/2023. Any reasonable company would have given 90 days heads-up at a minimum.

 

[bmugford]

Are American companies using this excuse? If not, that's probably why as Godaddy is......

Incidentally, it is interesting that DAN has not used the word "inflation correction" anywhere as a reason for the commission increase, as currently all companies seem to get away with it, especially in Europe.

Well, that can't really be a thing based on a % commission as the total amount is always 100%.
I mean I have seen companies use it, but it makes no sense.

So while you might be able to raise prices with the justification (often BS) of inflation, it is hard to justify a percentage as the total is always 100%.

For instance if GoDaddy raised the minimum fee by $10, that is different than raising the percentage.

Brad

 

[Future Sensors]

Are American companies using this excuse? If not, that's probably why as Godaddy is......

If it had been an inflation correction, I would have experienced the announcement a little differently than I do now. But only in case only DAN would have changed its commission model for this reason (and Afternic's model remained unchanged).

 

[BrandingGo]

Any other options?
Flippa - 10%
Sav - 2%
Efty - Free

Can you list on sav not sav domains?

 

[BrandingGo]

Hey guys, Does Flippa have bitcoin withdrawal?

 

[domainer111]

The worrying thing is they probably won't be stopping anytime soon on the acquisition side of things....

Since 2012 they have bought or merged with at least 1 company - normally 2+ per year........

Which leads on to this year.....they most likely will be looking at 1+ acquisitions this year - will it be on the domaining side or other parts of the business?....time will tell

Things are not going to improve in the Godaddy / domainer relationship..... if anything it will get worse going forwards....

Yes they have been on a spree Nick haven't they!

I had a look at the Godaddy Balance Sheet and while I don't understand most of it, a few figures caught my eye:-

From WSJ:
https://www.wsj.com/market-data/quotes/GDDY/financials/annual/balance-sheet

This is 2021 year end:

Cash & Short Term Investments

1,256

Total Current Assets

1,890

Intangible Assets

4,926

Total Current Liabilities

2,437

Long-Term Debt

4,001

Non-Convertible Debt

3,858

Total Liabilities

7,334

Total Liabilities / Total Assets

98.88%

Long term debt shot up between 2020 and 2021.

Taking the non-convertible debt at $3,858,000,000.

Since 2008, we have seen interest rates slashed to near zero and even below zero in Europe.

Let's say the interest rate is at 1% over the last few years for the Godaddy debt. That's a bill of $38,580,000 in interest charges.

Now the Fed rate is 4.25%-4.5% according to Google. Let's say 4%.

That's an annual bill of $154,320,000. And you thought your renewals were bad.

And what happens if rates go up to 6%? 7%? 8%?

 

[xynames]

DAN increases its commission from 9% to 25% for sales that derive from their marketplace unless you use their landing pages, in which case it will be 15%. This 25/15 commission structure will be the same across the board at Afternic, DAN, Uniregistry come February 1, 2023.

Their service for sales that you bring in just to use their escrow remains at 5%, but that's pretty sky high compared to escrow.com

Anyway, unless GoDaddy puts a lot of advertising dollars into DAN I don't see how or why its marketplace - for sales that do not use DAN landing pages - would increase much. DAN marketplace is pretty dead compared to Afternic (for that matter, so is Uniregistry).

 

[twiki]

Just thinking that domain names and valuations are not an exact science and it is hard to price domains as is. I doubt that a 7% increase in the lower price ranges (4 figures) would change that much?

I have to disagree.

At this time, except for top quality domains, a 7% increase might be felt quite significantly in sales as per my latest observations

 

[NickB]

Yes they have been on a spree Nick haven't they!

I had a look at the Godaddy Balance Sheet and while I don't understand most of it, a few figures caught my eye:-

From WSJ:
https://www.wsj.com/market-data/quotes/GDDY/financials/annual/balance-sheet

This is 2021 year end:

Cash & Short Term Investments

1,256

Total Current Assets

1,890

Intangible Assets

4,926

Total Current Liabilities

2,437

Long-Term Debt

4,001

Non-Convertible Debt

3,858

Total Liabilities

7,334

Total Liabilities / Total Assets

98.88%

Long term debt shot up between 2020 and 2021.

Taking the non-convertible debt at $3,858,000,000.

Let's say the interest rate is at 1%. That's a bill of $38,580,000 in interest charges.

Now the Fed rate is 4.25%-4.5% according to Google. Let's say 4%.

That's an annual bill of $154,320,000. And you thought your renewals were bad.

And what happens if rates go up to 6%? 7%? 8%?

Oh Daddy. What have you done Daddy.

Thanks for that - some interesting figures - they seem to be sitting on a decent cash reserve though....ready to pounce this year.....

 

[twiki]

Thanks for that - some interesting figures - they seem to be sitting on a decent cash reserve though....ready to pounce this year.....

More buys.