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?

 

[AEProgram]

Just moved all my domains into Sedo only.

You removed them from AN?

 

[Sutruk]

Just for fun I asked ChatGPT about its legal opinion on this situation and here is the answer:



@jberryhill I would like to hear your opinion

As per ChatGPT's answer:

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"However, if a company engages in monopolistic behavior or engages in anticompetitive practices, it could potentially run afoul of antitrust laws.

Antitrust laws are designed to prevent companies from engaging in practices that might harm competition and consumers. These laws generally apply to businesses that have a significant level of market power, and they prohibit a variety of practices, such as price fixing, bid rigging, and other activities that might harm competition."
------------------------------------

In my understanding, it's quite obvious that Godaddy (Afternic) has a significant level of market power (Godaddy has by far the highest number of domains registered there, by millions).

So they are taking advantage of this situation (their market power at Godaddy) to harm their competition by increasing a 10% Afternic's fees for people using other companies DNS instead of theirs.

Thast's a clear monopolistic and anticompetitive practice, in my opinion.

 

[youaintme]

NOTE: Import your own leads will continue to operate at the 5% commission rate.

oh yeah. that's all I want.

 

[JB Lions]

Reza (Dan founder) thoughts on this:

My (personal) view on the recent Dan & Godaddy commission alignment: 1: 55-60% of domain sales originate at the biggest and most effective distribution network (Afternic). The commission there is decreased from 20% to 15%. 2: 45%-40% via optimized for sale pages and... 1/4

the commission from direct lander sales will be aligned with what you pay for a distributed sale. Effectively, the average domainer will not see a net negative on his/her sales outcome but in some cases even a positive outcome after this commission alignment. 2/4

Historically domainers react negatively to paying a commission but I've always said that a commission-less domain industry would lead to zero innovation as operating in the field without income results in no R&D and so product development or simply poor service. 3/4

To conclude: the roadmap of Dan & Godaddy for the secondary market is huge and exciting and is delivering tremendous value for all domainers that utilize these services effectively. Nobody likes change but great things are on the horizon 4/4

https://twitter.com/x/status/1611637263896551425

 

[bmugford]

Reza (Dan founder) thoughts on this:

My (personal) view on the recent Dan & Godaddy commission alignment: 1: 55-60% of domain sales originate at the biggest and most effective distribution network (Afternic). The commission there is decreased from 20% to 15%. 2: 45%-40% via optimized for sale pages and... 1/4

the commission from direct lander sales will be aligned with what you pay for a distributed sale. Effectively, the average domainer will not see a net negative on his/her sales outcome but in some cases even a positive outcome after this commission alignment. 2/4

Historically domainers react negatively to paying a commission but I've always said that a commission-less domain industry would lead to zero innovation as operating in the field without income results in no R&D and so product development or simply poor service. 3/4

To conclude: the roadmap of Dan & Godaddy for the secondary market is huge and exciting and is delivering tremendous value for all domainers that utilize these services effectively. Nobody likes change but great things are on the horizon 4/4

https://twitter.com/x/status/1611637263896551425

LOL. Now do the 25% penalty for not using GoDaddy nameservers...

That is the change that I, and many others, have the most problem with.
It is just so blatantly anti-competition I am not sure how you could possibly defend it.

Brad

 

[Sutruk]

Reza (Dan founder) thoughts on this:

My (personal) view on the recent Dan & Godaddy commission alignment: 1: 55-60% of domain sales originate at the biggest and most effective distribution network (Afternic). The commission there is decreased from 20% to 15%. 2: 45%-40% via optimized for sale pages and... 1/4

the commission from direct lander sales will be aligned with what you pay for a distributed sale. Effectively, the average domainer will not see a net negative on his/her sales outcome but in some cases even a positive outcome after this commission alignment. 2/4

Historically domainers react negatively to paying a commission but I've always said that a commission-less domain industry would lead to zero innovation as operating in the field without income results in no R&D and so product development or simply poor service. 3/4

To conclude: the roadmap of Dan & Godaddy for the secondary market is huge and exciting and is delivering tremendous value for all domainers that utilize these services effectively. Nobody likes change but great things are on the horizon 4/4

https://twitter.com/x/status/1611637263896551425

What he gonna say. Godaddy has paid him $71M to buy and subdue Dan.com.

Now they have to raise their commission to refill that $71M hole with something. But the job has been already done, and that's buy and finish with Dan's competition.

What leads to zero innovation is to buy every competitor company just to make their monopoly stronger, THAT'S WHAT LEADS TO ZERO INNOVATION.

 

[JB Lions]

LOL. Now do the 25% penalty for not using GoDaddy nameservers...

That is the change that I, and many others, have the most problem with.
It is just so blatantly anti-competition I am not sure how you could possibly defend it.

Brad

Or join the club and now only pay 15% instead of 20%. And Sedo is an option at 20%, they probably like this move.

As far as:
1: 55-60% of domain sales originate at the biggest and most effective distribution network (Afternic). The commission there is decreased from 20% to 15%. 2: 45%-40% via optimized for sale pages and... 1/4

Effectively, the average domainer will not see a net negative on his/her sales outcome but in some cases even a positive outcome after this commission alignment. 2/4

Goes with what I posted earlier, probably true in the end.

I used to pay 20% and 9%
Now I pay 15% and 15%

Those that will pay 25% have to figure something out. Maybe go to Sedo MLS if that's an option and pay 20%

 

[bmugford]

https://twitter.com/x/status/1611785977193799681

 

[Sutruk]

Or join the club and now only pay 15% instead of 20%. And Sedo is an option at 20%, they probably like this move.

As far as:
1: 55-60% of domain sales originate at the biggest and most effective distribution network (Afternic). The commission there is decreased from 20% to 15%. 2: 45%-40% via optimized for sale pages and... 1/4

Effectively, the average domainer will not see a net negative on his/her sales outcome but in some cases even a positive outcome after this commission alignment. 2/4

Goes with what I posted earlier, probably true in the end.

All BS. The real goal of the "update" is to harm competition, to increase their monopoly and to destroy any attempt of competiton.

That's why many people are already migrating their landers to Godaddy's "network" of landers.

That's why the "USE MY LANDERS OR PAY 10% MORE IN AFTERNIC".

 

[JB Lions]

All BS. The real goal of the "update" is to harm competition, to increase their monopoly and to destroy any attempt of competiton.

That's why many people are already migrating their landers to Godaddy's "network" of landers.

That's why the "USE MY LANDERS OR PAY 10% MORE IN AFTERNIC".

Of course the update is to harm competition, that's the point. You're supposed to wreck the competition.

But actually if it drives people to their competition it helps their competion.

Sedo. Does this move hurt or help Sedo? How does it hurt them? I see people posting their now going to try out their landers, try out their distribution network since it's now cheaper. That seems like a win for Sedo to me.

 

[Sutruk]

The ChatGPT has given a clearly good answer to this practice:

-----------------------------------------
"However, if a company engages in monopolistic behavior or engages in anticompetitive practices, it could potentially run afoul of antitrust laws.

Antitrust laws are designed to prevent companies from engaging in practices that might harm competition and consumers. These laws generally apply to businesses that have a significant level of market power, and they prohibit a variety of practices, such as price fixing, bid rigging, and other activities that might harm competition."
-----------------------------------------

The key here, as we all know, is the level of market power that Godaddy have in the domain industry. They host millions of domains more than their next competitor. And they use their market power here to harm competition.

Crystal clear.

 

[Sutruk]

Of course the update is to harm competition, that's the point.

So, the point is that's a clearly anticompetitive and monopilistic practice that goes against Antritrust laws.

 

[bmugford]

Of course the update is to harm competition, that's the point.

But actually if it drives people to their competition it helps their competion.

Sedo. Does this move hurt or help Sedo?

I think it is easy to see what the changes are designed to do.
The unknown is what they actually do.

It could drive domains, especially higher end domains, out of their ecosystem entirely.

It is also going to drive people to explore other options, where they probably would not have otherwise.

Brad

 

[JB Lions]

So, the point is that's a clearly anticompetitive and monopilistic practice that go against Antritrust laws.

There is no shortage of options, ones you've skipped over in your replies.

Again, address Sedo.

Because of this move, more people are likely to go to Sedo, right? Doesn't harm Sedo one bit, it's going to help them. Sedo should send them a gift basket.

 

[Sutruk]

But actually if it drives people to their competition it helps their competion.

You must be joking. Tell that to Efty, Bodis, or whatever alternative marketplace using their own dns.

Sedo. Does this move hurt or help Sedo? How does it hurt them? I see people posting their now going to try out their landers, try out their distribution network since it's now cheaper. That seems like a win for Sedo to me.

Sedo should be the first concerned with Afternic's move. Starting from the fact that they cannot use Godaddy on their MLS network. Clearly excluding them from the biggest registrar of the world.

Godaddy takes advantage from their market power to exclude Sedo listed domains from appearing at Godaddy domain search. And that's another clearly anticompetitive and monopolistic behaviour.

 

[JB Lions]

You must be joking. Tell that to Efty, Bodis, or whatever alternative marketplace using their own dns.

Not following, how does this hurt Efty? I've actually seen people asking about them because of this. I have Efty as well. You could handle the sales on your own via Escrow, Stripe, many other methods.

"Starting from the fact that they cannot use Godaddy on their MLS network."

You can list directly on GoDaddy plus use the Sedo network.

Going thru their registrars, it looks like it's the only major one they don't have - https://sedo.com/us/sell-domains/promotion-options/#c2529

 

[Sutruk]

Not following, how does this hurt Efty? I've actually seen people asking about them because of this. I have Efty as well. You could handle the sales on your own via Escrow, Stripe, many other methods.

Not sure if you are joking or what.

When you use Efty, you have to use their DNS. So then if you also list your domains at Afternic and they get sold there, you will end paying 25% of commission instead of 15%.

I hope you can follow now.

 

[JB Lions]

Not sure if you are joking or what.

When you use Efty, you have to use their DNS. So then if you also list your domains at Afternic and they get sold there, you will end paying 25% of commission instead of 10%.

I hope you can follow now.

I hope you follow that you can use Sedo MLS and list directly at GoDaddy, same coverage.

Actually, I don't follow. What do you mean 10% at afternic with Efty?

 

[bmugford]

Not following, how does this hurt Efty? I've actually seen people asking about them because of this. I have Efty as well. You could handle the sales on your own via Escrow, Stripe, many other methods.

Well, you essentially have to make a difficult choice.

1.) You use Etfy landers. The domain is not @Afternic at all.
So you don't have access to Afternic's distribution network.

2.) You use Efty landers. You also list it on Afternic.
It sells on Afternic. You have to pay a 25% commission.

In a way the commission penalty acts like some type of exclusivity, where any choice not to use their namesevers is penalized.

If the name sells via Afternic, I am not sure why the commission should not be the same regardless of what landers you use.

Imagine you had something for sale on eBay and Craigslist.

Would it make sense for eBay to charge a higher commission if it sold on their venue, only because the product was also listed somewhere else? No. That is essentially what GoDaddy is doing here.

Brad

 

[Sutruk]

"Starting from the fact that they cannot use Godaddy on their MLS network."

You can list directly on GoDaddy plus use the Sedo network.

I see that you really have problems to follow me.

I am talking about Sedo as a company. Sedo cannot use Godaddy in the Sedo MLS network. Sedo MLS domains will not appear at Godaddy when you search for a domain. So this clearly benefits Afternic over Sedo.