Namecheap and GoDaddy fight regarding domain aftermarket

Namecheap CEO Richard Kirkendall and GoDaddy President of Domains Paul Nicks traded barbs the prior week.

GoDaddy owns Afternic, and Namecheap is a partner that syndicates domains in the Afternic network. When Namecheap sells one of these domains it splits the commission with Afternic.

The disagreement started with Kirkendall noting that GoDaddy restricted some Afternic inventory from showing up at Namecheap. He suggested that GoDaddy did this to try to maximize its revenue by getting more aftermarket sales at GoDaddy. (GoDaddy keeps the full commission on sales on its sites.)

Godaddy likes to do “tests” that censor out certain registrars since they have more sales. Their optimization involves trying to get the most sales to Godaddy themselves.

— Richard Kirkendall (@NamecheapCEO) March 31, 2022

Nicks responded:

Let’s break down what’s going on here.

First, regarding Afternic inventory. GoDaddy lets partners mark up sellers’ prices to capture more commission. Last month I analyzed how registrars do these markups of up to 15%.

Namecheap offered a slight discount of 3% instead. It took this hit on its commission but gained some sales since people knew Namecheap had lower prices. I’ve steered a few people to Namecheap to make their aftermarket purchases since of the discount.

Apparently, Afternic lets partners markup prices but not discount them. GoDaddy took its NameFind inventory down from Namecheap as punishment.

I’m inclined to side with Namecheap on this one. I’d be fine with GoDaddy requiring registrars only to sell domains at the list price, but if you’re going to let them add commission, you ought to let them reduce it, too. Complaining that Namecheap wouldn’t honor the buy now prices doesn’t seem fair given that registrars can increase the prices. (That stated, if Namecheap didn’t respond to requests to talk regarding it, that’s not good, either.)

The second part has to do with Namecheap’s expired domain inventory. Namecheap partnered with GoDaddy Auctions to sell its expired domains until November last year, when it moved the domains to its own marketplace.

It appears that Namecheap was pulling back an outsized number of domains late. When you buy an expired domain at GoDaddy that is registered at a partner registrar, there’s a chance that the transaction won’t be fulfilled since the registrant ends up renewing/transferring the domain. All registrars have different deadlines, but this is really frustrating as a buyer. I find it especially surprising when a domain gets to the final days of closeouts, and the domain is renewed following I buy it.

I don’t know the extent of Namecheap’s pullbacks, but I can say that GoDaddy needs to do what it can to fulfill as many completed aftermarket purchases as possible.

I messaged with Kirkendall this afternoon. He made the following points:

•  In addition to GoDaddy removing Namefind domains from Namecheap, Afternic also pulled Namecheap’s portfolio from syndication.
• It was following this that Namecheap decided to pull its expiry from GoDaddy Auctions.
• Namecheap then removed the 3% discount on Afternic names in an effort to normalize the relationship.

It would be a shame if Namecheap no longer sold Afternic inventory. I hope the firms can work this out.