Is GoDaddy adding 5% on top of its Afternic 15% commission?

[Recons.Com]

I was up for very unpleasant surprise today.

The names that I, for example, have priced for $2499 are showing as $2724.11 at Godaddy. Apparently, this change might be experimental for now as it is not showing the same for all, but it will have very adverse effect on all domain investment community. And it is grossly unfair too.

GD announced with lots of fanfare that it is reducing the Afternic commission from 20% to 15% to justify raising Dan commission from 9% to 15%. Apparently, there have been plans to recoup that and more, as 5% on the gross is more than 5% on the original price.

So what will be the impact on all of us? If GD does go ahead with it (and for the period and scope of the experiment) we will lose at least 5% of our sales if the price elasticity is straight line. But, we all know that it is not and there are psychological thresholds. E.g. 2499 to 2724, from my experience, will result in 10-20% loss for two reasons: a) again, it crosses 2500$ limit; b) the "magic" endings like 00, 99, 88, 50 are ruined for someing like 24.11 ending. GD itself in its blog had published an experiment involving namefind names that showed 8% increase in sales from going to 2499 from 2500, so this changes are meaningful.

See also the attached slide by Darpan (SH founder) showing how important those thresholds can be. Crossing $5k barrier, e.g., can result in 35% loss in sales numbers.

Now couple this with the upcoming 7%-10% increase in .com pricing, and loss of 10%-20% in sales so that GD can make extra 5% can be devastating to all of us.

If GD does go ahead with this, we should all look for an alternative to both Afternic and Godaddy, as they will eventually squeeze us all out of the business. If Godaddy does implement this, I will look into moving my 34000 .com domains out of Godaddy and will stop using Afternic landers.

This is just getting ridiculous. Godaddy, decide already, if we are your partners in the business or the competition.

 

[korganian]

Just when we thought things couldn't get any worse at Godaddy. That is actually a 9% markup from your example.

 

[Recons.Com]

Just when we thought things couldn't get any worse at Godaddy. That is actually a 9% markup from your example.

you are right (

 

[Recons.Com]

So new GD commission is going to be 1 minus 2124 (net to seller) / 2724 (gross paid by the client) = 22% and in case of no lander it will become about 1/3.

 

[Recons.Com]

One way or the other, there should be consequences for GD for this kind of abuse of power. In 2-3 years, my folio will be 100 000 .coms from current 34000. And if they are with GD's competitor, say Dyna or Spaceship, that is 200 000 difference for Godaddy (less 100k from them, plus 100k to their competition).

And it won't be just renewals, but also AN commission, auction buys etc. that I will do my best to minimize. Currently, I spend over $500k a year with GD between renewals, auction buys and commissions and that number will be around $2MM a year in 2-3 years that GD won't be getting from me.

 

[draco]

Did they announce this anywhere?

 

[Recons.Com]

Did they announce this anywhere?

haven't seen announcement. Moreover, some don't see it as added yet, so it is experiment...

And here is another screw up:

bin landers show price in CNY (Chinese yuans) for a US visitor. And, judging by the phone to call, it is not simply geolocation mistake.

 

[rohitgoyal]

I was up for very unpleasant surprise today.

The names that I, for example, have priced for $2499 are showing as $2724.11 at Godaddy. Apparently, this change might be experimental for now as it is not showing the same for all, but it will have very adverse effect on all domain investment community. And it is grossly unfair too.

GD announced with lots of fanfare that it is reducing the Afternic commission from 20% to 15% to justify raising Dan commission from 9% to 15%. Apparently, there have been plans to recoup that and more, as 5% on the gross is more than 5% on the original price.

So what will be the impact on all of us? If GD does go ahead with it (and for the period and scope of the experiment) we will lose at least 5% of our sales if the price elasticity is straight line. But, we all know that it is not and there are psychological thresholds. E.g. 2499 to 2724, from my experience, will result in 10-20% loss for two reasons: a) again, it crosses 2500$ limit; b) the "magic" endings like 00, 99, 88, 50 are ruined for someing like 24.11 ending. GD itself in its blog had published an experiment involving namefind names that showed 8% increase in sales from going to 2499 from 2500, so this changes are meaningful.

See also the attached slide by Darpan (SH founder) showing how important those thresholds can be. Crossing $5k barrier, e.g., can result in 35% loss in sales numbers.

Now couple this with the upcoming 7%-10% increase in .com pricing, and loss of 10%-20% in sales so that GD can make extra 5% can be devastating to all of us.

If GD does go ahead with this, we should all look for an alternative to both Afternic and Godaddy, as they will eventually squeeze us all out of the business. If Godaddy does implement this, I will look into moving my 34000 .com domains out of Godaddy and will stop using Afternic landers.

This is just getting ridiculous. Godaddy, decide already, if we are your partners in the business or the competition.


Show attachment 254198

There is another flip side to it especially in case of outbound. Many times we ask the buyer to purchase the domain directly from Godaddy website as per the agreed price and when they see different price over there then its gonna raise lots of red flat in their mind. Even without outbound , pricing would be different in different platform which would cause confusion and red flag in the mind of buyer.

 

[Recons.Com]

There is another flip side to it especially in case of outbound. Many times we ask the buyer to purchase the domain directly from Godaddy website as per the agreed price and when they see different price over there then its gonna raise lots of red flat in their mind. Even without outbound , pricing would be different in different platform which would cause confusion and red flag in the mind of buyer.

Can you imagine also the moral side of GD offering something for let's say 2000$ on landing page with its logo on it and for $2180 if it is searched on its site? This is beyond ugly. Not sure who came up with the idea, but he/she should be fired.

Let's assume GD was selling $50 mill worth domains via its site with 15% commission totaling 7.5$MM/year for it.

Now it adds 9% hoping to earn extra 4.5$MM/year. But, here is the actual math will work, if the sales drop by 20% due to higher prices, random ending prices and crossed thresholds. $50MM will become $40MM, 15% commission earning will become $6MM (net loss $1.5MM to GD) and the 9% surcharge will be not $4.5MM, but $3.6MM. So, net gain might be just $2.1MM and that is if it doesn't backfire via alienated buyers and sellers and doesn't force all the stakeholders to stop tolerating the monopoly position of GD in the aftermarket. $2MM extra cash at the cost of lost tens of millions for its partners and risk to its overall business is the stupidest possible decision.

 

[Jannes]

It's as if there happens a conversion from euros to dollars.

 

[Recons.Com]

It's as if there happens a conversion from euros to dollars.

nope, just usd... Also, conversion from USD to Euro would result in smaller number.

 

[Jannes]

nope, just usd... Also, conversion from USD to Euro would result in smaller number.

read again (as if & from euros to dollars)

 

[Recons.Com]

read again

It still doesn't make sense, as my prices are listed as USD, not Euro and there is no option in my afternic to list them at different currency. So, listed USD, showing on GD in USD, not sure where you see conversion creeping in.

There are two scenarios that I am hoping for though.

: a) it is just purely scientific experiment for them to understand implications of price differences and is done on a small scope; b) they have screwed up the geolocation and have identified me as some country that requires 9% sales tax on top (then, again, why US number?).

 

[Jannes]

Yeah I really hope it's a glitch, whatever the cause may be.

 

[Furquan]

@GoDaddy

 

[Armageddon]

It still doesn't make sense, as my prices are listed as USD, not Euro and there is no option in my afternic to list them at different currency. So, listed USD, showing on GD in USD, not sure where you see conversion creeping in.

There are two scenarios that I am hoping for though.

: a) it is just purely scientific experiment for them to understand implications of price differences and is done on a small scope; b) they have screwed up the geolocation and have identified me as some country that requires 9% sales tax on top (then, again, why US number?).

If you access random a domain listed on Afternic & show in GBP , must go to Godaddy.com & on up right corner is a message say " you or your currency is GBP or what ever" you change it & when come back to that random domain will show currency you set prev.

 

[fardomai]

Maybe this is a glitch in the GoDaddy reg path.
Which language/region you're using?

For example in the Australian version with $USD and not the $AUD.
It shows a higher price, but when I add the domain to the cart it shows just the original price listed on Afternic.

Noticed the same thing with closeouts

 

[EJS]

I just checked a domain name I listed for sale and parked via Dan.com for $4,995 (CrushTheShorts.com). I did not separately add the domain name to my Afternic account, so it is exclusively listed at Dan and syndicated through the Afternic network. When I searched for the domain name on GoDaddy, it shows up in the registration path with the $4,995 listed price.

I also looked up a name I have parked at Dan and listed in my Afternic account at the same $1,988 price point (HogRoasts.com). That, too, shows up in the registration path for $1,988. I tested this on different browsers - one of which is logged in to my GoDaddy account and the other is not.

Maybe @James Iles can offer some insight since I did not detect anything abnormal. You can also check these two names to see if they're showing up at different prices for you.

 

[BaileyUK]

Actually, when you think about it, I'm surprised there isn't more of this about. They certainly aren't the first company to implement what is basically 'front-running' your sales listings. Since the Godaddy take-over of Dan I have moved all my listings to Sedo only. Then surprised to see all my domains appear on 123-Reg (The largest UK based registration service) with a 10% premium to my Sedo pricing. There may well be a relationship between Sedo and 123-reg that I'm not aware of.

My first thoughts were this must be the work of one individual, but no, this is through the 123-reg purchase platform and it is a consistent 10% across all domains of mine. Been going on there for some while

When you think about it, it does make for a tempting business model. I just wondered how the contractual obligations stack-up. Could get rather messy for the buyer unless there was a real-time link into the Sedo platform. Then of course there's the ethical issue of my relationship with Sedo.

 

[BaileyUK]

Ps. I meant to add, I don't allow syndication of my domain listings through Sedo, in order to keep the flat commission rate, I just don't like the fact that commission could be anywhere from 15 to 25% instead of a flat 10%.

But, I guess that doesn't stop Sedo doing their own syndication and putting the additional lost commission onto the buyer. Somewhat similar to what seems to be going on with the OP's example.

 

[equity78]

I just checked a domain name I listed for sale and parked via Dan.com for $4,995 (CrushTheShorts.com). I did not separately add the domain name to my Afternic account, so it is exclusively listed at Dan and syndicated through the Afternic network. When I searched for the domain name on GoDaddy, it shows up in the registration path with the $4,995 listed price.

I also looked up a name I have parked at Dan and listed in my Afternic account at the same $1,988 price point (HogRoasts.com). That, too, shows up in the registration path for $1,988. I tested this on different browsers - one of which is logged in to my GoDaddy account and the other is not.

Maybe @James Iles can offer some insight since I did not detect anything abnormal. You can also check these two names to see if they're showing up at different prices for you.

James is out til March 25.

 

[equity78]

Actually, when you think about it, I'm surprised there isn't more of this about. They certainly aren't the first company to implement what is basically 'front-running' your sales listings. Since the Godaddy take-over of Dan I have moved all my listings to Sedo only. Then surprised to see all my domains appear on 123-Reg (The largest UK based registration service) with a 10% premium to my Sedo pricing. There may well be a relationship between Sedo and 123-reg that I'm not aware of.

My first thoughts were this must be the work of one individual, but no, this is through the 123-reg purchase platform and it is a consistent 10% across all domains of mine. Been going on there for some while

When you think about it, it does make for a tempting business model. I just wondered how the contractual obligations stack-up. Could get rather messy for the buyer unless there was a real-time link into the Sedo platform. Then of course there's the ethical issue of my relationship with Sedo.

No Bailey I first started writing about this years ago, Some registrars mark up your domain names, reps from Sedo and Afternic at the time said well some do that because they might not participate if they cannot make more money. Now you can contact them and tell them I don't want to be on registrars that mark up prices. This seems different as GoDaddy was not showing different prices. This here could be a glitch, as Elliot and others are not seeing different prices.

https://www.thedomains.com/2017/07/19/lot-shady-things-coming-light-week/

Afternic Chief Revenue Officer Bob Mountain:

Select partners are testing markups on Afternic domain names. There hasn’t been a fundamental shift, we’re just working with some of our partners at their request. If you would like to have your names removed from being listed at these markup resellers, please contact Afternic customer service.

 

[BaileyUK]

No Bailey I first started writing about this years ago,

OK, thanks for that, I mistakenly believed that once you selected. No to participating in Sedos partnership programme, That was that. I have only ever paid the lower rate on sales

So are you stating this is basically NO different to what the OP is bringing to our attention. Thanks.

This may also explain Sedos rather over-emphasising of my flat rate commission every time I make a sale. Their wording being "You have selected Sedo Only as your sales platform, therefore you are only going to be charged our basic 10% commission on this sale"

Just seemed rather strange wording for what for me was the obvious, but now I can see it from a different angle. Maybe the buyer coughed-up more than he needed to

 

[zomainhacks]

Other times I've seen such prices discrepacies VAT was the reason but a 8% doesn't sound like a VAT rate.

Have you checked the domain from a VAT country?

 

[equity78]

OK, thanks for that, I mistakenly believed that once you selected. No to participating in Sedos partnership programme, That was that. I have only ever paid the lower rate on sales

So are you stating this is basically NO different to what the OP is bringing to our attention. Thanks

I think this might be a glitch, because this is GoDaddy and they never had a higher price. The partners marking up has been around for close to a decade.