I have found that the commission structures for domain name sales at Afternic and GoDaddy are confusing. Depending on the type of sale listing and how the buyer found a domain name, the commission percentage could vary pretty widely. This is being simplified going forward.
Afternic and GoDaddy is in the process of emailing customers to announce a change to the commission structure to make it more simplified and straightforward across the two brands. Instead of having to think about the type of listing and promotion to determine the commission rate, the new commission structure is strictly based on the sale price of the domain name.
The commission structure for aftermarket domain name sales on GoDaddy and Afternic is as follows:
- $50-$5000 @ 20% ($15 minimum)
- $5,000-$25,000 @ $1,000 +15% of amount over $5k
- $25,000+ @ $4,000 +10% of amount over $25k
The company has set a minimum listing price of $50 for buy it now auctions and a $100 minimum for premium listings. They are also setting a $20 minimum listing price for 7 day auctions and offer/counter offer domain listings.
For customers selling domain names at GoDaddy, the commission change will result in more proceeds to the seller. For customers selling on Afternic, the commission rate is going to cost a bit more. I suppose you can look at it as paying for the added GoDaddy network exposure.
Customers of both companies will receive an email notifying them of these changes, if the email has not already arrived.
As always, your feedback is welcome, and I am sure GoDaddy will address comments and concerns.
Most of the Afternic sellers were already taking advantage of the Premium Promotion (Fast Transfer) level, which already came with a 20% commission. For these sellers they will actually receive a reduced commission on sales over $5000.
Always felt 15-20% commission on automated sales with minimal inventory handling was much to high. Godaddy has run thru the numbers, and realized what operational percentages will yield the most profit, so there you have it.
“For customers selling domain names at GoDaddy, the commission change will result in more proceeds to the seller.”
Not True. Commission was 10% in GD auctions and is now 20%. If you sold in Premium it used to be 30% and will now be 20% so you will save in Premium listings.
A good majority of our public sales were via premium listings, not GD Auctions. So, although note every case will reduce commissions, the majority of them will.
“The company has set a minimum listing price of $50 for buy it now auctions and a $100 minimum for premium listings.”
It seems like now that if you have a GD auction listing you will have to opt into it to become a Premium Listing. Don’t you think all minimums should be the same across the board and all names listed on GD auctions and on Premium listing be simultaneous. The commission is the same on either one so why all the extra confusion. It makes sense to make everything the same. If you add a name to the Godaddy system all names are treated equally and are added to both GD auctions and Premium Listing. Set the minimums the same. It just makes sense.
Good point and that is the plan. We are working on various ways to make it easier for you to list your domain name in one place at one price and automatically have it exposed to the most potential buyers. This is planned in a later release down the road.
Another issue I always see is when a person types in my name on a mobile device the link doesn’t go to my sales listing but to the entire GD auctions system. They follow my link to nowhere basically.
I would like to know more about that so I can look into it. Can you email me the steps you take to have this happen please? I would be happy to check into it for you. jstyler at godaddy is my email.
Will do. Thanks.
The majority of my sales thru Afternic were 15%.
This means my commission cost will go up.
I guess I will have one price at Sedo and another price at Afternic.
Lets look at old and new commission cost.
$ 9,000. sale use to be $1,350. Now, $1,600.
$ 4,000. sale use to be $600. Now, it will be $800.
$ 2,000. sale use to be $300. Now, it will be $400.
Since, I sell very few domains thru Afternic over $ 10k. The majority of those sales are direct. And, I put it thru Escrow,com .
I guess Godaddy does not fear the loss of business to other competitors like DNS and Sedo.
Like Ron, I believe 20% is too high for a simple, automated transaction.
GD figures we will just raise our prices. But, their is a simple economic principle, higher the price – less potential buyers. Which means we will sell less domains thru Afternic.
Thanks for the comments. Please keep the feedback coming as I will continue to monitor the article and am always available to help with any concerns or questions. We worked hard to come up with a commission range that would work across all the networks. There were many considerations involved but the main driving principle was making the process easier for people selling domains (one commission instead of two at Afternic and two at GoDaddy) and finding the right price for that service. This makes it easier to manage your portfolio across multiple platforms.
While some commission costs did increase others were lowered to achieve this flatter structure such as the GoDaddy premium domain sales commission of a flat 30% and the sliding scale based on the final sale price of your domain. Our sales velocity on names listed for fast transfer is higher than non fast transfer names and those names are able to be listed on many major registrars giving your inventory a very broad reach and the ability to be seen by millions of potential buyers. Couple that with the fact that you have sales teams that offer the inventory to customers calling in to buy domains and support teams to field questions about the value of premium names and you should see an increase in sales.
Please keep the feedback coming as I will continue to monitor the article and am always available to help with any concerns or questions.
The majority of # of transactions are under $25K, Godaddy knows this, for the vast number of transactions you are looking at $250-$5000 where the highest percentage hit is. These are the same people buying their expired auctions, and churning these sales, and making them double income.
The table presents the raw more commissions.
All comments only reflect the fees and do not include (prima)bonus are very high indeed are most appreciable.
For me, the commission levels are way too high. When you consider that most physical auctions don’t exceed 10%, a 20% scale for what is an automated transaction is truly painful.
The commission levels may also put a damper on domain sales overall. Basically, it drives prices up 20%, and that money literally leaves the marketplace. The seller doesn’t get it, but the buyer still ends up paying for it one way or another. So domains have to be sold at a premium to their actual value for sellers to make what they feel they want, and if they want to buy a similar class of domain to replace that one, they will have to pay 20% more. Artificial inflation?
I can also see where raising the minimum to $20 and generally pushed for $50 will turn away most sellers of lower end domains entirely. That would appear to leave more domains to just expire (and end up on the auctions as expired domains, I guess).
Not sure that this is a step forward. High commissions and higher minimum prices would seem to be forcing sellers to go it alone rather than use an auction service.
I believe the new rate structure will backfire in the short and long run. I feel for the Afternic/Godaddy brokers in trying to get more blood out of a turnip then they are already are getting. Higher commissions = higher prices = higher pressure on brokers. I think in a few months the current active brokers will shift elsewhere within Godaddy. Then new brokers that will last shorter and shorter periods of time before moving on.
The future will be a sale and lease model like you find through Epik.com on their Marketplace. I have 2 privately branded Marketplace sales portals running on two of my domains that were built out by Rob Monster. They do quite well, autocompletion of sales and leasing with domains at his registrar. A turnkey system, otherwise anyone can use his primary Epik Marketplace to list names for sale and lease. The ability to have a privately branded sales and lease portal is essential in my opinion. I have been running them for almost a year and they work beautifully. Elliot, you should probably talk to Rob about how he helped me in the build out and hosting, you would find it quite fascinating and liberating.
More simplified? Haha. Just look at the discussions on the domain forums. There is mass confusion about the new commission rates.
It wasn’t long ago that GoDaddy commissions were 5%, then it went up to 10%, now it’s 20%. GoDaddy is getting too greedy. Plain and simple. The new rates are more expensive for the majority of the transactions.
This is bad for the domain industry.
It may take time, but this gives a competitor an opportunity to come in and do things right.
I think it’s more simplified compared to the various commission rates before.
It might be a bit more complicated to figure out commission rates by hand now, but the same can be said for other services that use a tiered commission structure (like many escrow services).
One thing that would be helpful would be a commission fee calculator so you can easily see the fee by entering in the sale price.
This is the perfect, simple and easy solution to end any confusion related to the cost of selling a domain name.
An inline commission calculator is planned as a release in the next few months. This will allow you to see your net sales amount in real time as you go through the process of listing your domain for sale in real time.
I agree this new commission structure is not as simple as a flat one but we did it in an effort to charge less money to the seller the higher the sale price goes.
Looks like the commission on a $60k sale is $7,500, or the same commission that you’d pay on DomainNameSales using their flat 12.5% commission. For higher priced sales, it would actually be cheaper to sell the domain through GoDaddy.
While 20% is high, part of that is going to pay for the Super Bowl commercials that brought your buyer to GoDaddy to begin with.
Here is where there is confusion and the service supplied.
If Afternic/Godaddy has to act as a sales negotiator, I agree the commission should be higher. Very few endusers will buy a domain which cost over $10k (possibly $5k) without speaking to someone.
However, if I am sending my traffic to a Afternic sales page with a BIN price (between $2k and $9k), why should I pay a premium commission for an automated transaction?
If anything, I am probably bringing a potential customer to Afternic and the customer probably will search Afternic database for a possible alternative.
Since, Escrow,com is now offering an automated transaction button, it would be smarter move for domainers to build individual sale pages so the domainer does not lose the transaction to another domain available thru Afternic.
Some sharp domainers are already doing that with success.
With the amount of brokerage firms within the industry, I feel that a 20% fee is a bit aggressive. Unlike the old days, the average domain owner today has a variety of options when selling a domain. Many professional brokers out there would gladly accept 5% less than GoDaddy.
But they don’t have the reach of GoDaddy…
I suppose that’s a valid point. However, I may argue that an experienced broker may be motivated to command a higher price than GoDaddy and find a better fit for both the buyer and the seller. GoDaddy certainly has the audience to sell domains quickly.
That’s probably accurate, but what broker is going to work on the names in the $1-5K range that sell without human assistance? I think that is a big draw.
True enough. I would definitely agree that for the majority of names that sell in that low bracket on GoDaddy, that it may be a no-brainer. However, on the flip side, a seller may not even realize that some of their 1-5k domains might actually be 7-15k names with the assistance of a broker, who’s willing to take a lower commission.