Some will win and some will lose under new commission structure.
GoDaddy’s (NYSE: GDDY) long-awaited “commission alignment” will go into effect on February 1. The new structure offers an incentive for people to use landers in the GoDaddy family of companies.
Commissions will be a flat 15% for domains that are parked on a GoDaddy service, including GoDaddy, Afternic, Uni or Dan, regardless of whether the domain sells through the lander or Afternic network.
Domains parked elsewhere will carry a 25% commission when they sell on the Afternic network.
This compares to Afternic’s current rates of 20% for transactions up to $5,000, 15% on the amount up to $25,000, and 10% on the amount above that. Dan.com currently charges a 9% commission and Uni charges 3% for self-brokered sales.
Under the new structure, customers could pay a lower commission on Afternic network sales than they do now. But they’ll pay a higher rate on domains they sell at Dan.com or Uniregistry.
I haven’t done a complete calculation, but my back-of-the-envelope math suggests I would have saved a bit of money if this structure had been in place last year. I sold many more domains on Afternic than I did on Dan, and most were under $5,000, so the 5% reduction in commissions on Afternic would outweigh the 6% extra at Dan.
But for people who mostly sell on Dan.com, or who mostly sell higher-ticket domains above $5,000, the new structure will probably cost them more. And if your park your domains outside GoDaddy’s ecosystem, be prepared to pay a higher commission than before.
The commission schedule could have an adverse impact on alternative landing page and parking services. Domain investors can park their domains on competing landers such as Sav (4% commission), SquadHelp (7.5%), or Efty (0% without escrow). However, if they end up selling the domain at Afternic, they’ll pay 25% rather than 15%.
GoDaddy confirmed to me that it is retaining the import-a-lead option at Dan. The fee for that service remains 5%.
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