The Domain Aftermarket: 2024 in review
Afternic introduces Boost and more domain sales platforms launch.
Most domain investors make money by selling their domains through aftermarket platforms such as Afternic and Sedo. This year brought significant developments to these platforms.
The biggest story comes from the largest platform, Afternic, which faced business challenges and introduced changes to adapt.
In August, Afternic disclosed a fresh promotion tier called Afternic Boost. In return for a higher commission, Afternic dresses up boosted domains for exact match searches, includes them in non-exact match search results, and promotes them in email campaigns.
The cost is substantial: Sellers opting into Boost must pay an additional 5% nominal commission on all sales. Depending on whether their domains are parked with Afternic, this increases the total commission by 20%-33%.
While Afternic claims Boost can increase sales by up to 10%, domain investors quickly calculated that the higher commission applied to all sales effectively absorbs 70% of their additional revenue.
Afternic had been providing much of this added promotion for free during the year, so it was reducing exposure for domain investors unless they agreed to pay higher commissions.
The firm explained the change by highlighting internal business dynamics. The aftermarket team wants to sell as many premium domains as possible. On the other side, the team responsible for the search path wants to capture both conversions and revenue.
These priorities can conflict, and to justify allocating more search path real estate to aftermarket domains, the aftermarket side needed to increase commissions.
That’s probably part of the reason behind Boost. It likely also reflects broader pressures on GoDaddy’s aftermarket business.
Aftermarket sales are not recurring, yet they make up a notable part of the firm’s revenue. If the firm sells fewer domains, it can quickly impact topline numbers. Notably, GoDaddy’s Core segment, which includes aftermarket sales, has seen minimal growth.
Earlier this year, GoDaddy’s largest aftermarket client, HugeDomains, removed its entire inventory from Afternic. This might have represented over 20% of Afternic’s inventory. Anecdotally, domain investors tell me they run up against HugeDomains less frequently in GoDaddy expired domain auctions, too.
So a cynic might think the Boost addition is just a way to increase commissions to make up for sales challenges.
Certainly, these aftermarket challenges are part of the reason GoDaddy decided to run frequent aftermarket auctions, counting selling off some of its owned and operated domains.
Meanwhile, fresh platforms are providing domain investors with more options.
In August, brokerage Saw.com launched its platform that allows sellers to self-broker or delegate leads to Saw’s brokers. It has some clever features that can help sellers better manage leads.
Domain Easy, backed by a handful of domain investors, launched this fall, offering additional competition.
Atom has continued to innovate, introducing Commission Match, a feature designed to ease concerns regarding Afternic’s higher commissions when selling domains through other platforms.
Overall, domain sellers are getting more choices.
Despite these fresh choices, Afternic’s extensive sales network remains a dominant force in the industry. Personally, while I sold domains this year on Sedo, Saw, DomainAgents, and Atom, the majority of my sales still came through Afternic.
