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?

 

[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).

 

[Reallybigidea.com]

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

Can you list on sav not sav domains?

 

[Reallybigidea.com]

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.

 

[internext]

Why not just use SEDO and pay 10% instead? Is there a downside that I don't know of? Their new landers look great.

Yes. I don't like having to list all my domains at BIN to get a good rate, and there are no payment options.

 

[twiki]

I just had an idea.

I should be building a marketplace, and one day have it acquired.

 

[Future Sensors]

Incidentally, I do indeed think that many domainers will now increase their prices to cover their perceived loss, regardless of whether that is wise or not. It remains to be seen whether this will have the desired effect for GDDY. It is already a slack time and purchasing power is visibly declining. It is complicated to predict, but this day will undoubtedly have all kinds of consequences in the domain market.

 

[twiki]

Can you list on sav not sav domains?

Yes you can.

 

[Rhinnnn]

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?

$2,999 + 7% = $3,209

$1,999 + 7% = $2,139

Buyers are WAY more likely to pull the trigger at $2,999 or $1,999 than at the prices on the right, even if 7% is not that much of an increase.

 

[domainer111]

More buys.

Well... it would be like doubling down! But what the heck, the debt can always be written off...eventually.

 

[Future Sensors]

@James Iles

Does this commission model change also affect the share that Afternic network partners (or Afternic itself) receive on a sale?

 

[Future Sensors]

If a large proportion of domainers now increase their Afternic (or DAN) prices as a result, the domains from GoDaddy's own NameFind portfolio will become more attractive at the same price. Whether and how GoDaddy passes on the commission internally is a whole chapter in itself.

 

[DomainBarracksRob]

Is Dan loading right now for you all? .....hasn't for me last 10 mins

 

[domaindevil]

Is Dan loading right now for you all? .....hasn't for me last 10 mins

No problem for me.

 

[DomainBarracksRob]

No problem for me.

okay may just need to rest my wifi thank you

 

[Vivere]

GoDaddy really tried to package this commission 'alignment’ as an all-around positive for domainers, but that’s just not the case.

They led with the shiny “reduced 15% commission” bit, so at a cursory glance one would see this as a great move. But they conveniently buried the fact that the former tiered commission structure (which was a huge benefit/consideration for higher sales) has now been nixed. They based their before-and-after comparison table on some incorrect rates. And they downplayed the fact that they have now also introduced a higher commission rate (25%) for domains that aren’t pointed to their nameservers.

As it stands, this seems to be the situation for DAN and Afternic users:


DAN:

• Before: Domains using DAN nameservers = 9% commission. After: Domains using DAN nameservers = 15% commission.
• Before: Domains not using DAN nameservers = 9% sales commission. After: (i.) Not using DAN nameservers but using other GoDaddy nameservers = 15% commission (ii.) Not using DAN nameservers or any other GoDaddy nameservers = 25% commission.
• Before: Domains integrated into Afternic DLS via DAN = 20% commission. After: No longer a relevant factor... because "aLiGnMeNt" (and it has done its job).
• Unchanged: Commission for imported leads -- 5%.

Afternic:

• Before: $0 - $5,000 domains using Afternic nameservers = 20% commission. After: $0 - $5,000 domains using Afternic nameservers = 15% commission.
• Before: $5,001 and above domains using Afternic nameservers = Tiered commission. After: $5,001 and above domains using Afternic nameservers = No longer tiered. 15% flat commission. Terrible news for higher sales. Examples: Before, a $60k sale would’ve incurred a 12.5% commission ($7.5k). Now, a $60k sale will incur a 15% commission ($9k). A $100k sale would’ve incurred an 11.5% commission ($11.5k). Now, a $100k sale will incur a 15% commission ($15k). A $250k sale would’ve incurred a 10.6% commission ($26.5k). Now, a $250k sale will incur a 15% commission ($37.5k). On and on. Just obscene.
• Before: $0 - $5,000 domains not using Afternic nameservers = 20% sales commission. After: (i.) not using Afternic nameservers but using DAN / other GoDaddy nameservers = 15% commission, (ii.) not using Afternic nameservers or any other GoDaddy nameservers = 25%.
• Before: $5,001 and above domains not using Afternic nameservers = Tiered commission. After: No longer tiered: (i.) not using Afternic nameservers but using other GoDaddy nameservers = 15% flat commission. Terrible news for higher sales. (ii.) not using Afternic nameservers or any other GoDaddy servers = 25% flat commission. Even more terrible. Examples: Before, a $60k sale would’ve incurred a 12.5% commission ($7.5k). Now, a $60k sale will incur a 25% commission ($15k). A 100k sale would’ve incurred an 11.5% commission ($11.5k). Now, a $100k sale will incur a 25% commission ($25k). A $250k sale would’ve incurred a 10.6% commission ($26.5k). Now, a $250k sale will incur a 25% commission ($62.5k). This is beyond crazy.

The only reduction here seems to be a decrease in commission from 20% to 15% for domains that are (a.) within the $0 - $5,000 range AND (b) using any of GoDaddy’s nameservers.

If your $0 - $5,000 SH or BB premium domains are listed on Afternic, you won’t enjoy said reduction because your premium domains will, by requirement, be pointed to your brandable marketplace’s nameservers.

TL;DR: GoDaddy's revised rates are extremely unfriendly and unfair.

I hope they reconsider this move. At a minimum, the tiered commission system should be brought back.

 

[Reallybigidea.com]

Yes you can.

Can i use marketplace balance funds for new domain reg on Sav?
Thanks

 

[bmugford]

GoDaddy really tried to package this commission 'alignment’ as an all-around positive for domainers, but that’s just not the case.

They led with the shiny “reduced 15% commission” bit, so at a cursory glance one would see this as a great move. But they conveniently buried the fact that the former tiered structure of commissions (which was a huge benefit/consideration for higher sales) has now been nixed. They based their before-and-after comparison table on some incorrect rates. And they downplayed the fact that they have now also introduced a higher commission rate (25%) for domains that aren’t pointed to their nameservers.

As it stands, this seems to be the situation for DAN and Afternic users:


DAN:

• Before: Domains using DAN nameservers = 9% commission. After: Domains using DAN nameservers = 15% commission.
• Before: Domains not using DAN nameservers = 9% sales commission. After: (i.) Not using DAN nameservers but using other GoDaddy nameservers = 15% commission (ii.) Not using DAN nameservers or any other GoDaddy nameservers = 25% commission.
• Before: Domains integrated into Afternic DLS via DAN = 20% commission. After: No longer a relevant factor... because "aLiGnMeNt" (and it has done its job).
• Unchanged: Commission for imported leads -- 5%.

Afternic:

• Before: $0 - $5,000 domains using Afternic nameservers = 20% commission. After: $0 - $5,000 domains using Afternic nameservers = 15% commission.
• Before: $5,001 and above domains using Afternic nameservers = Tiered commission. After: $5,001 and above domains using Afternic nameservers = No longer tiered. 15% flat commission. Terrible news for higher sales. Examples: Before, a $60k sale would’ve incurred a 12.5% commission ($7.5k). Now, a $60k sale will incur a 15% commission ($9k). A $100k sale would’ve incurred an 11.5% commission ($11.5k). Now, a $100k sale will incur a 15% commission ($15k). A $250k sale would’ve incurred a 10.6% commission ($26.5k). Now, a $250k sale will incur a 15% commission ($37.5k). On and on. Just obscene.
• Before: $0 - $5,000 domains not using Afternic nameservers = 20% sales commission. After: (i.) not using Afternic nameservers but using DAN / other GoDaddy nameservers = 15% commission, (ii.) not using Afternic nameservers or any other GoDaddy nameservers = 25%.
• Before: $5,001 and above domains not using Afternic nameservers = Tiered commission. After: No longer tiered: (i.) not using Afternic nameservers but using other GoDaddy nameservers = 15% flat commission. Terrible news for higher sales. (ii.) not using Afternic nameservers or any other GoDaddy servers = 25% flat commission. Even more terrible. Examples: Before, a $60k sale would’ve incurred a 12.5% commission ($7.5k). Now, a $60k sale will incur a 25% commission ($15k). A 100k sale would’ve incurred an 11.5% commission ($11.5k). Now, a $100k sale will incur a 25% commission ($25k). A $250k sale would’ve incurred a 10.6% commission ($26.5k). Now, a $250k sale will incur a 25% commission ($62.5k). This is beyond crazy.

The only reduction here seems to be a decrease in commission from 20% to 15% for domains that are (a.) within the $0 - $5,000 range AND (b) using any of GoDaddy’s nameservers.

If your $0 - $5,000 SH or BB premium domains are listed on Afternic, you won’t enjoy said reduction because your premium domains will, by requirement, be pointed to your brandable marketplace’s nameservers.

TL;DR: GoDaddy's revised rates are extremely unfriendly and unfair.

I hope they reconsider this move. At a minimum, the tiered commission system should be brought back.

Thanks for that. I appreciate the detailed analysis.

Again, it is galling how GoDaddy packaged this.

They put a shiny coat of paint on a turd. At even a cursory glance anyone can spot this is a turd.

Brad

 

[DomainBarracksRob]

okay may just need to rest my wifi thank you

No problem for me.

That worked! Thanks