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I just wanted to raise awareness around the Dan.com business model and in particular the markup fee.
I think Dan.com are overall doing a great job to shake up the industry but one of the reasons their business model is so effective is the huge cut they take from lease-to-own arrangements.
In my opinion it's not really clear how Dan.com fees work so I will break it down in an example.
I've seen the term 'domain financing' used a lot in the coverage of Dan.com. This is poor wording. If Dan.com were to provide the seller with a full payment upfront this would be 'financing'. As it stands the risk is still squarely on the domain seller.
Let's take an example sale of $9,600.
The domain is priced at $8,000 on Dan.com and a plan is selected to pay over 24 months.
Your fees payable in this instance are $400 (assuming the lead came through your own lander) and then a tasty $800 service fee for managing the installments. $1200 total, so the final fee is actually 12%.
Now let's look at installments through Escrow.com.
For a sale of $9,600 the upfront fee is $175 and then a monthly management fee of $25 is payable for self-managed DNS. This is as simple as setting up a Cloudflare account and away you go. For me this gives me ongoing control over the domain in the unlikely event Dan.com goes out of business, and my buyer doesn't have any trust preference between Dan.com vs Escrow.com anyway.
The total payable in this case is just $775. That's another $425 in your pocket and a closer relationship with your buyer (which in my opinion is good for business).
By my calculation for any domain priced above $6,000 the installments are cheaper to manage through Escrow.com.
Just something to be aware of.
I think Dan.com are overall doing a great job to shake up the industry but one of the reasons their business model is so effective is the huge cut they take from lease-to-own arrangements.
In my opinion it's not really clear how Dan.com fees work so I will break it down in an example.
I've seen the term 'domain financing' used a lot in the coverage of Dan.com. This is poor wording. If Dan.com were to provide the seller with a full payment upfront this would be 'financing'. As it stands the risk is still squarely on the domain seller.
Let's take an example sale of $9,600.
The domain is priced at $8,000 on Dan.com and a plan is selected to pay over 24 months.
Your fees payable in this instance are $400 (assuming the lead came through your own lander) and then a tasty $800 service fee for managing the installments. $1200 total, so the final fee is actually 12%.
Now let's look at installments through Escrow.com.
For a sale of $9,600 the upfront fee is $175 and then a monthly management fee of $25 is payable for self-managed DNS. This is as simple as setting up a Cloudflare account and away you go. For me this gives me ongoing control over the domain in the unlikely event Dan.com goes out of business, and my buyer doesn't have any trust preference between Dan.com vs Escrow.com anyway.
The total payable in this case is just $775. That's another $425 in your pocket and a closer relationship with your buyer (which in my opinion is good for business).
By my calculation for any domain priced above $6,000 the installments are cheaper to manage through Escrow.com.
Just something to be aware of.
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