Poll: Was the 3% discount to GoDaddy DLS a smart move by NameCheap?

During 2021 NameCheap offered domain aftermarket buyers an unbeatable 3% discount on DLS inventory. Those who queried participating domains via NameCheap.com would see a price 3% lower than any other GoDaddy/Afternic DLS partner.

The 3% discount at NameCheap benefited buyers, all while (presumably) sellers were not affected by this arbitrary pricing. Did you want to buy a domain name listed for $10,000 dollars at Afternic? The NameCheap “beast mode” tool would list it for 3% less, at $9,700 dollars. A domain priced at $100,000 dollars would get a nice $3,000 dollar discount! NameCheap would eat up 3% and both buyer and seller would be happy.

The “party” carried on for months until somehow GoDaddy got whiff of it. As the largest domain registrar in the world, GoDaddy is a publicly traded company that has benefited from its expanded domain marketplace in recent years. Plainly put, its financials are beefed up by the volume of sales that take place on GoDaddy.com and Afternic.

GoDaddy and NameCheap are now publicly sparring over their partnership’s thorny issues.

NameCheap held a 3% sale on DLS inventory for months – Photo by Markus Spiske on Unsplash

When NameCheap decided to discount such domains, it was a calculated risk: NameCheap would apparently pay that 3% from its own DLS commission, potentially gaining a repeat customer that’d spread the word. Meanwhile, other DLS partners priced these domains up versus down, attempting to make a profit from the negotiated terms of the commission. The end result: an increase in volume of domain sales at NameCheap, with a matching drop for GoDaddy/Afternic and other DLS partners.

There’s no doubt that GoDaddy isn’t the only party not happy with such arbitrary domain pricing at NameCheap.

First off, any domain sales reported in the past year or perhaps, longer, via NameCheap, are in fact 3% higher. If a domain was reported as sold for $9,700 dollars, the true price before commission was $10,000 dollars. Secondly, domain sellers would see their domains listed “at a discount” that did not match their vision and expectations of their property’s value. This discount of DLS inventory at NameCheap tweaked the industry’s performance of domain sales as a whole to the tune of 3%.

As GoDaddy and NameCheap are now negotiating the renewal of their DLS partner contract, we don’t anticipate that the 3% discount party at NameCheap will return. But here’s a poll about the overall decisions made by NameCheap:

Was NameCheap smart to take a loss of 3% on DLS commission?

View Results

Loading ... Loading ...
Copyright © 2022 DomainGang.com · All Rights Reserved.

Comments

2 Responses to “Poll: Was the 3% discount to GoDaddy DLS a smart move by NameCheap?”
  1. Brad Mugford says:

    I do find it rather amusing that GoDaddy has an issue with NameCheap discounting the cost by 3%, but have absolutely no problem with other registrars raising the prices. For instance Name.com (and probably others) add their own surcharge to Afternic prices.

    I have mentioned this many times in the past.

    Why is it OK for a partner to raise the price arbitrarily so that it does not match Afternic, but not OK to discount it? Please explain…

    Brad

  2. DomainGang says:

    Brad – Because upselling is part of the existing agreement, presumably. I’m guessing the terms mentioned nothing about selling lower than the asking price!

    With NameCheap being the #2 registrar this type of competition created problems at GoDaddy as far as volume of sales & revenue goes. Other registrars are considerably smaller – no threat to GoDaddy.

Leave a Reply

Your email address will not be published. Required fields are marked *

 characters available