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Afternic has quietly implemented a change that will hurt sales for most of the investors.
Afternic was fantastic in 2018-2019 for me, as well as for most others, but for last 40 days it has been very quiet. With portfolio of around 3800 names listed, that is surprising.
So I checked what might have changed. And came across a very bad news.
With few partner registrars, my listed prices were showing with plus 15% price from Afternic/GD actual price.
So, if you have a name listed at $2000, it will show at Epik, Name etc. at $2300, while you'll still be netting $1600. The effective commission for names not sold directly at GD/Afternic is now $1600/$2300 which translates to about 31.5%, close to what marketplaces like BB, SH charge, while also doing logo, promotion etc. for you. That is over 50% increase in commission without announcing anything. And more than doubling commission for high end $xx,xxx names.
So what, you might ask? We get the same money, right? Wrong. Most goods sold, unless it is oxygen or life saving medicine, or some super luxury goods, have a built in price elasticity. You increase price, you decrease demand. So that 15% increase in prices, can very well translate into 15% to 30% loss in sales.
I estimate that 2/3 of Afternic sales were via partners. So expect to lose 10% to 20% of your sales for the year.
Afternic, meanwhile, might not lose anything, unless we all, as sellers, do something about it.
I am not sure how the profit sharing is done with partners, but let's assume before GD was giving half of 20% to them and then also taking care of charges etc. with another 2%, so netting 8%.
If 2/3 are partner sales, it was getting weighted
2/3 * 8% + 1/3*20%= 5.4%+6.7% = 12.1%.
And now, if it still gives the partners 10%, but from 1+15%, then partners get around 11.5% of the actual price, while GD gets to keep 20% there.
2/3 *20% +1/3*20%=20%.
So, GD's return per sale increases just like that by 60%.
If the sales from partners are down by 20%, GD still wins (1-0.2)*(1+0.6)=1.28.
28% in net profits! Plus some of those sales might be also re-captured, if buyer did search more and found GD offering.
So, reduced sales, but GD profitability up. So who loses? Partners and sellers.
Very bad strategy for GD and near sighted approach. Hopefully, they reconsider and CEOs of partners put pressure on GD about this. There is literally no need for this except for greed.
@Rob Monster could you shed some light on this?
@Joe Styler could you comment on this change please?
Afternic was fantastic in 2018-2019 for me, as well as for most others, but for last 40 days it has been very quiet. With portfolio of around 3800 names listed, that is surprising.
So I checked what might have changed. And came across a very bad news.
With few partner registrars, my listed prices were showing with plus 15% price from Afternic/GD actual price.
So, if you have a name listed at $2000, it will show at Epik, Name etc. at $2300, while you'll still be netting $1600. The effective commission for names not sold directly at GD/Afternic is now $1600/$2300 which translates to about 31.5%, close to what marketplaces like BB, SH charge, while also doing logo, promotion etc. for you. That is over 50% increase in commission without announcing anything. And more than doubling commission for high end $xx,xxx names.
So what, you might ask? We get the same money, right? Wrong. Most goods sold, unless it is oxygen or life saving medicine, or some super luxury goods, have a built in price elasticity. You increase price, you decrease demand. So that 15% increase in prices, can very well translate into 15% to 30% loss in sales.
I estimate that 2/3 of Afternic sales were via partners. So expect to lose 10% to 20% of your sales for the year.
Afternic, meanwhile, might not lose anything, unless we all, as sellers, do something about it.
I am not sure how the profit sharing is done with partners, but let's assume before GD was giving half of 20% to them and then also taking care of charges etc. with another 2%, so netting 8%.
If 2/3 are partner sales, it was getting weighted
2/3 * 8% + 1/3*20%= 5.4%+6.7% = 12.1%.
And now, if it still gives the partners 10%, but from 1+15%, then partners get around 11.5% of the actual price, while GD gets to keep 20% there.
2/3 *20% +1/3*20%=20%.
So, GD's return per sale increases just like that by 60%.
If the sales from partners are down by 20%, GD still wins (1-0.2)*(1+0.6)=1.28.
28% in net profits! Plus some of those sales might be also re-captured, if buyer did search more and found GD offering.
So, reduced sales, but GD profitability up. So who loses? Partners and sellers.
Very bad strategy for GD and near sighted approach. Hopefully, they reconsider and CEOs of partners put pressure on GD about this. There is literally no need for this except for greed.
@Rob Monster could you shed some light on this?
@Joe Styler could you comment on this change please?
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