The Disconnect Between Go Daddy and Domain Investors On Their Recent Commission Changes

Recently Go Daddy announced changes in the commission structure at Go Daddy and Afternic. The move is being made to streamline commissions and to lower fees on higher end sales. The changes are not sitting well with most domain owners who use Go Daddy and Afternic to sell their domain names.

Go Daddy announced:

We also want our fees to be simple and straightforward, so they’re now based on your domain sale price. The three commission tiers look like this:
Sale price of domain >>> Commission fees
$0-$5,000 >>> 20% ($15 minimum)
$5,000-$25,000 >>> $1,000 +15% of amount over $5k
$25,000+ >>> $4,000 + 10% of amount over $25k

Please note we’re setting a minimum of $50 for Buy-It-Now Auctions and $100 for Premium listings. We’re also setting a $20 minimum listing price for 7-Day Auctions and Offer/Counter-Offer domain listings.

Along with the changes to new listings moving forward, we’ll be converting existing listings over to the new system over the next 3 to 4 weeks for an early April launch.

• If your domain is below the new minimum offer price, we’ll bump the minimum offer up to $20 for 7-Day Auctions and Offer/Counter-Offer listings.
• If you have a Buy-It-Now Auction listing priced below $50, we’ll switch it to an Offer/Counter-Offer listing with a minimum price of $20.
• If you have a domain that’s listed as both a Premium Domain and a Buy-It-Now Auction, we’ll consolidate it and use the higher of your two price points.

To help you list and sell more domains inventory, we lowered our minimum sales prices. The buy now minimum is only $50 (versus $250), and the minimum offer amount decreases to only $20 (from $250).

Reaction from Go Daddy Customers

In a five page long thread at Namepros many have expressed their outrage, some have decided to pull their names from the platform as they just don’t understand why Go Daddy thinks these changes are good. To his credit Joe Styler from Go Daddy has been in the thread actively posting and answering questions.

My take is that Go Daddy is saying look most sales come from the premium listings, being in the registrar path and that commission has been a flat 30%, whether the name was priced at $500 or $50,000. They are trying to lower commissions for those selling for higher prices.

Namepros members are pointing out that most sales take place in the $5,000 and under range, and they were used to using Go Daddy Auctions, not the premium listings, they only had to pay 10 % commission.

After Shane Cultra brought up the point that Go Daddy “has the scale to make it the cheapest, easiest, and fastest way to auction names and instead you blew it and made it more complicated and raised the prices. Congratulations to Flippa and Namejet. They just added customers and didn’t have to do a thing.”

Joe Styler replied, “It is more complex than a straight commission. We considered that before changing but thought saving sellers more money on higher dollar transactions was worth the confusion over a straight 20%.”

I would say to Mr. Styler it is not more complex, or rather this:

The fact of the matter is you should have one marketplace Afternic and Go Daddy makes little sense, combine it to one entity.

Secondly auctions are not in the registrar path, you should have kept that at 10%, the person using the 7 day auction is looking for different things than the person who wants their names to show up in the registrar path.

No one ever and I mean ever gave you feedback that they would like to pay 20% on auctions vs 10 % SO just stop.

If you can have tiers you can separate Premium Listings and Auctions, two separate and distinct products.

10% for auctions
20% max tiered for premium listings.
Afternic has been an abomination in many ways, here is one fun fact, I have no names parked at Afternic every time I log in you show me traffic and clicks and revenue, nowhere on Afternic does it say what this money has amounted to, and it should be zero. I have had emails don’t forget to approve the premium listing with your registrar, opt in, NO email comes.

Change the system, Flippa will continue to eat your lunch for auctions, then you will just have premium listings. So this is a net loss for you guys, plus the people who already have decided to leave Go Daddy.

I believe that Go Daddy Auctions is a different animal and should be kept that way, a domain investor who is trying to put their names in the registrar path is running their business differently than someone conducting 7 day public auctions.

Separate the products and leave the 10% commission for auctions, I am willing to pay more to be in the Go Daddy registrar path, but the auctions we work more on our own to promote them and 10% is fair.

Namepros member Stub summed up the frustration:

For most of us here, whose bread and butter is selling domains <$5k, you’ve thrown us under the bus. It’s a straight 100% increase in commissions. We don’t actually care what commissions you charge over $5k. It seems your new commission structure benefits the big sellers over the little sellers.

Now we probably move to your Premium Listings because we get better monetization, for exactly the same commission of 20%. Why would anybody just want to list on your auctions anymore when Premium Listings are the same price. You better be prepared for your volume increases in Premium Listings. Whereas we ate the 10% commission, we are not going eat the 20% commission. But we maybe increase our prices between 20-40% (because we want something out of this sale too). Which will probably involve less sales completions. Also, you are probably going to severely damage Make Offer pricing with this move. At least for the initiated. And I think single handedly have increased prices for domains sold under $5k, which doesn’t gel with your marketing posture of being in the corner of everyman/woman.