Here’s why NameMedia sells more of its own domains than clients’ domains.
Every once in a while I feel like going on a rant. So here goes.
There’s been a lot of talk on both my blog and others about NameMedia, which operates BuyDomains and AfternicDLS.
NameMedia owns its own portfolio of domains which it sells through its platform. It also allows other domain owners (i.e., you) to sell domains via its AfternicDLS system, which then syndicates through its sales network.
Here’s the issue people raise: when NameMedia used to report its weekly sales, most of the domains that sold were NameMedia’s own domains. Why was there not a proportionate number of customer domains selling?
I’ll tell you why. Because NameMedia has a disproportionate amount of reasonably priced and categorized domains for sale on its premium distribution network.
Priced (reasonably) and categorized
When you list with Afternic you have a choice of listing a price or as “make offer”. If you list an actual price your domain is much more likely to sell to an end user.
You can also categorize your domain. Domains that are categorized are 2.8 times more likely to sell than uncategorized listings.
So if you haven’t priced your domains and categorized them, you won’t sell nearly as many as NameMedia does. And if you don’t price your domains within the end-user sweet spot of under $5k (more like $1k-$2k), it will be even harder to sell.
Promotion Levels
You have three choices when it comes to selling your domains with NameMedia through AfternicDLS.
The first is Basic Distribution. This means your domains are just listed on Afternic.
I suspect that most people who complain about lack of success with AfternicDLS choose basic distribution and don’t price their domains.
There’s absolutely no way you can sell the same percentage of your domains on AfternicDLS as NameMedia does if this is how you’re listing your domains.
The second level is Expanded Distribution, which syndicates your listings to 20 partners. This is definitely a step up from basic listings, and all things being equal your domain on Expanded is three times as likely to sell as on Basic.
But the magic is in the third listing level, Premium Distribution. These domains also show up when people search for domains at Network Solutions and Register.com. More importantly, customers are able to buy the domains directly at those registrars and instantly get the domain in their account.
Domains listed in Premium Distribution have 18x the sales velocity of domains in Basic Distribution.
So let’s assume you have actually priced all of your domains reasonably and categorized them well. Let’s also assume your domains are comparable to NameMedia’s own portfolio and you have as many domains at the company owns. But you list them on Basic. NameMedia is still going to outsell you 18-to-1.
You’re really comparing apples to oranges if you gripe about that.
Now there’s only one advantage NameMedia has to you if you actually use the Premium level and all other factors are kept constant: NameMedia’s own domains are syndicated through the GoDaddy registration path. That is not currently an option for its customers (although you can do that directly with GoDaddy).
But isn’t there a salesperson conflict of interest?
This is a fair question. Wouldn’t NameMedia’s phone sales reps have an incentive to sell the company’s own domains rather than yours?
The answer is yes, only if you don’t price your domains correctly and list them at the Premium level.
Sales reps make the same commission selling one of your names as one of NameMedia’s. But let’s put yourself in a sales rep’s shoes.
Phone rings. Person is interested in two domains, one of which is a customer domain and one is the company’s own domain. I can quote the buyer a price on the NameMedia domain and sell it to them instantly, which is a big advantage for me as a salesperson. If the AfternicDLS customer has priced the domain, I can quote the price and sell it instantly only if it is priced and listed at Premium level.
Now the customer starts to bargain. Both domains are priced at $3,000 and the seller wants to spend $2,000. For the NameMedia domain I can run down the hall to my sales manager and see if he will let it go for $2,000.
I can’t do that with the client’s domain. Or can I? Actually, yes. If the client put a floor price on his listing, I can negotiate directly with the buyer without even contacting the seller.
So, in a nutshell, here’s how to get a NameMedia sales rep to sell your domain on part with its own:
-Price it reasonably
-Add a floor price
-Choose Premium Distribution so they can sell and transfer the domain immediately to the buyer
The bottom line
Have you ever purchased a product at Amazon.com that was sold by a third party? It’s interesting. Amazon actually lists its competitors and their prices next to the product. You can either buy it from Amazon or buy it from a partner and Amazon takes a commission. They don’t discriminate; if a third party seller offers it for less they’ll actually list the competitor above Amazon.com in the purchase options.
It’s the same thing here. If you compare apples to apples, NameMedia will sell the same proportion of your domains as it does its own.
I’ll leave you with one thought: if NameMedia sells so few client domains, why does it spend so much money courting domainers to sell on its system? Surely it should just cut domainers out of the picture and concentrate on selling its own domains. That would save a lot of hassles.
Hmm. I hope the tides never change so much that NameMedia considers doing that. That would be a big loss for domainers.
Mike Law says
For a ‘rant’ that was really informational. Thanks for helping more of us understand how all of NameMedia’s services work.
Bobby Lafaye says
Isn’t it true that to choose Premium Distribution the domain in question must be registered with Network Solutions?
Andrew Allemann says
@ Bobby – they have to be at NetSol or Register. If you have a lot of domains you can use an API system that gives them access to your domains for instant transfer (I’m fuzzy on the details of this).
I think a big win would be getting Moniker on board — not for distribution but for access to domains.
Leonard Britt says
I only sell about one domain a year via Afternic despite pricing and categorizing most domains. When Afternic reported their sales in detail it was easy to find numerous examples of comparable domains which sold for several times where mine were priced. Selecting Expanded promotion has not improved my sales rate. If a buyer says I’m looking for a domain about ___ the sales agent makes a higher commission on the higher-priced domain, no?
Andrew Allemann says
@ Leonard –
It is true that most commissions are based on the price of the domain. Just like selling a car, you want to put them in a more expensive domain. But I don’t think this is an issue if all the domains are in a similar price range.
And again, if it’s just on ‘expanded’ the sales rep can’t instantly transfer the domain.
Robert Haastrup-Timmi says
Interesting analysis Andrew.
Does Afternic not charge a fee for listing at the premium level? So if they do, and assuming you have priced your domain in the circa of 2k to 3k, would you not still be competing with their own portfolio of domain names?
It would seem to me they will always push their domains first above customers and if they do charge for premium listings, then that is a further revenue incentive for them to attract more domains on Afternic. So you could be paying for a premium listing but still be competing directly with Afternic! They win, you loose your premium listing fee.
If this is the case, it certainly doesn’t raise a lot of confidence from a domainer’s perspective right?
Andrew Allemann says
@ Robert – there’s no listing fee for the “Premium” level. I think you’re thinking of the “Featured” box option.
Jamie says
“NameMedia’s own domains are syndicated through the GoDaddy registration path. That is not currently an option for its customers (although you can do that directly with GoDaddy).”
Customer listed domains on Afternic are listed on the auction platform if you use Expanded promotion and have the domain priced with a buy it now.
Andrew Allemann says
@ Jamie – correct, but they don’t get syndicated to the registration path (which is the best sales channel).
Alexander Teo says
One reason NameMedia actively gets domainers to sell on its system could be, the prospects and customers that domainers bring would become NameMedia’s clients to buy more domains and other services.
Deke says
You can list your domains in the reg path at GoDaddy through the Premium Listing option.
It’s a 30% commission rate though….so price accordingly. Mine are priced very high there b/c of this, but being in the reg path like Andrew says is where you want your domain to show.
My personal belief about Afternic is that they work both sides of the fence. I think they have lots of established buyers and dev groups that are waiting to buy domains, and Afternic favors them over the sellers. They seem to beat down the prices so those buyers get great deals and keep coming back for more, which means more commissions. IMO….they care about creating a commission machine and not getting a decent price for sellers.
I’m assuming they don’t cut the great deals for domains in their own portfolios and hold out for higher prices, thus higher reported sales for their own domains when they used to report.
RH says
Andrew while that was a great post, most domainers are not going to transfer to Network Solutions or Register.com and anyone suggesting they should sounds irresponsible.
Andrew Allemann says
@ RH – indeed, I understand why a domainer might not want to transfer their domains. That said, we still can’t complain about the sales differences b/c of that 🙂
Also, if you have a big account you can give api access to afternic and keep your domains with your current registrar.
SL says
Andrew, nice article.
I recently completed a sale through them for a domain that had lots of (somewhat) lowball offers and was pleased with the overall transaction. In this case I had the better domain than Namemedia (non-hyphen vs. their hyphenated) and the customer presumably was looking for both. The final net price worked out to about twice the highest offer it got in the past. The entire process was smooth and professional.
Be aware that if they ask for your floor price, make sure you’re comfortable selling it for that number minus the 20% commission. Which is perfectly fine, just don’t set the minimum and expect it to work up from there.
Also, I’m not a big fish so api access is not an option. But I do have a few pretty good quality names and use Moniker exclusively for my registrar. That’s the biggest gripe with Premium listings, I don’t even bother listing the best ones on Afternic since they won’t reach end users via Premium exposure. And no way I’d consider transferring to Netsol (Register, maybe but not worth the effort).
So a big thumbs up to getting Moniker integration with Premium listings.
(Oh, and a gripe: fix column sorting in Account|Domain Statistics. It hasn’t worked for the last few months.)
Mike - DomainAnimal says
“Also, if you have a big account you can give api access to afternic and keep your domains with your current registrar”
@Andrew are you doing this currently? Any idea how big a portfolio would justify this?
great post, btw.
another suggestion i have brought up to Afternic before is that if categorizing your domains really increases the sales velocity that much then they should implement some type of auto-categorization similar to Sedo. Obviously those scripts dont get the right categories all the time, but more honestly, domainers that upload large portfolios are either too lazy or dont have time to manually categorize hundreds or thousands of domains, one at a time. I think if Afternic wants to increase their sales its not a bad idea to shell out a few development bucks to create such a script for auto-categorization
Andrew Allemann says
Here are details on the API system
Not sure how many domains you need, but I suspect it’s at least 5k, and maybe more.
Stephen Douglas says
Dub-A
That was a backhanded compliment to Name Media.
If you’re going to rant, draw blood, don’t be apologetic for your victim. You spent more time (words) telling your readers how to keep their domains from being overlooked into what we really want to know. (And I thinnk I know what that is – when I confirm the info, I’ll blog full dog)
(I see you worrying about loss of advertising income from NM). tsk tsk.
Other than that, glad to see you nominated for Traffic’s Annual Domainer Best — you deserve the kudos.
See how I did that?
Andrew Allemann says
@ Stephen –
it’s not meant to be a backhanded compliment at all. It’s meant to explain how people are comparing apples to oranges, and that their numbers are bunk.
Chadi Ghaith says
Some of my best domains ever have been acquired for the most reasonable price via namemedia’s buydomains.com.
Thus, I really do not give a damn crap about all this.
As a matter of fact, namemedia, in doing what it does (which is its right to do), is normalizing the prices of domains and the domainees behavior, forcing them to respect gravity a little more, pumping blood into this relatively stagnant market.
I just checked out a domain I was really interested in for a real business I needed to build around it using dn history to discover that it has been purchased in 2007 for 2k, via Afternic.
Guess what the buyer is now asking for it: 80k (as a reserve price).
He is simply not willing to take any offers below that. Hell, you can’t even reach the guy to say hi for a second…
If only it was still listed at Afternic, there would now be a meaningful site attached to it and not some stupid
parking page.
Viva NameMedia….
Chadi Ghaith says
Oh and one more thing I forgot to mention about namemedia… They accept CreditCards and countless payment methods… You don’t get stuck with a wire transfer procedure or some PayPal form you have to fill, especially if you come from a country that does not support PayPal, you’d understand what this could mean… HOPE and great awareness that there are other people in this world who are serious about this industry….
Meyer says
Chadi,
In all due respect, your comments are the
same comments I’ve heard over and over for
many years that when someone buys a domain
they should work on a cost plus bases
rather than its market value.
Do you really think NameMedia follows that
policy?
They don’t.
They prefer to buy low and sell high just
like most domainers.
Chadi Ghaith says
Hi Meyer,
No problem… That’s what we comment for.
Sure BuyDomains are in there to make profit. However, they are reasonable about the profit they make, and it doesn’t hurt if they acquire this reasonability from bulk sales (being a grand co). If they acquire a domain for 500$, they are willing to sell at 750$.
To me as a customer, I’m glad there is out there the opportunity to purchase great generic domain names, without having to face some stubborn seller who believes that the world stops at his domain.
Also, the brokers at BuyDomains always make me aware that a given domain is owned by them, once I ask for it; and its only natural that I’d much rather hear them say to me: “Wait some minutes and we’ll see if we can get your offer approved on it…”, than say: “We’ll contact the seller and inform them of your offer…”
This is not an intentional strategy they are taking to harm the sellers that place their names with them, because if you truly want a domain, you’ll wait for the seller to be contacted even if he lives in Alaska.
If you don’t, falling for another is like switching TV channels. It really does not take any broker tricking you into buying another the company owns.
After you settle on the name you like for the price you want, Buydomains sends you a link through which you have more than 6 choices via which you can pay for the domain, including the credit card choice.
You pay, and if the domain is owned by NameMedia, it hits your account at the gaining Registrar of your choice in a matter of very few hours.
It will not refer you into a transfer page, bother you with tens of automated e-mails and 100s of procedures and instructions, that if you happen to be traveling or offline, things could get really messed up and ugly for you.
So, bottom line…They know how to create a win/win situation, they deserve all the merits…
There is nothing ethical about this whole industry, at least let their be something practical and pleasant about it…
Regards
Chadi
Meyer says
Quote –
“There is nothing ethical about this whole industry”
I believe there is the same ethics in this
industry as any others. But, that is a totally different topic.
Quote –
“If they acquire a domain for 500$, they are willing to sell at 750$.”
You are naive or wishful thinking.
They will only follow that formula if the domain is a dog.
Otherwise, (just guessing) they mark up their domains by 10 to 20 times what they pay for them. And, discount from there.
Chuck Hambling says
Rant? That was a good NameMedia sales pitch.
Andrew Allemann says
@ Chuck – it was a rant, but against people who are comparing apples and oranges
Chadi Ghaith says
I have no hidden reason to praise BuyDomains, and I wish I knew how to pitch.
I had an excellent experience with them (period), and I do not feel they can logically be wronged for the reason they seem to be wronged for.
And, having purchased premium domains (in thousands) from many companies along the years, I think I speak out of real experience and not wishful thinking.
I think they cater to the needs of a Global community of customers, and are not stuck in some local bubble mentality.
This is my modest opinion…
Chadi Ghaith says
Oh and one more thing:
If they are clever enough to be able to purchase a domain for 1$, to resell it for 500$, when similar domains are sold for 5000$ (in the least) in other companies or by individual owners, then be it…
Their Customer is still a winner.
Why?
Maybe, They know which domains to acquire at what price, and can better predict for which price could it be reasonably resold.
They are better speculators than
you and me.
Again, this is not vilifying in any way/
Mike Mann says
I wish I thought of that, I prefer http://DomainMarket.com/
Dave Bhatia says
Brokerage fee is 10% at sedo.com , 20% at afternic.com and 30% at godaddy.com . But what has absolutely NO justification is that godaddy takes 45 days after the month in which sale took place to pay to seller.
Let us say sale took place on Jan 1. They would pay 45 days from Feb 1 (around 3/16).If sale took place on Jan 31 the payout date will still be around 3/16.
In best case scenario they pay seller after 46 days . In worst case scenario after 76 days. And that after taking a hefty 30%. I have written to godddy requestng that Bob Parsons should tell us why he needs 30% commissin plus hold on to the seller’s money for 76 days. I am still waiting for a reply.
Andrew Allemann says
@ Dave – the good news is that GoDaddy doesn’t force you to sell domains with them 🙂
I think it’s in case of chargebacks and fraud.
Chadi Ghaith says
Godaddy is absolutely the best registrar to register, transfer to, manage and renew domains at.
Its the registrar where you’d best consolidate your domain portfolio at.
Not any extra services than the ones I’ve mentioned are worth the money and effort at Godaddy.
Sorry Godaddy…. Gotta be honest…
Chadi Ghaith says
As for Sedo, its the best place to really find out if the status of the domain you want (i.e. Available, Unavailable, for Sale, Not for sale etc…) and to discover the reserve price set on it.
For, if its not “for sale” on Sedo, chances are its not for sale anywhere else.
As for their payment and transfer services, they suck.
I’ve bought many domains from Sedo for tens of 1000s of dollars, and when I sold one stupid domain for 250$, they couldn’t figure out a way to send the money to me.
They couldn’t WireTransfer it, and the only other option they had was PayPal which is not a Global service as many think it is.
Its not supported by all countries in the world.
So, I ended up deducting the amount from another domain I purchased through them.
When it comes to catering to the needs of international customers, I believe BuyDomains are the best – both in terms of their borkerage, their payment and transfer procedures.
SL says
Whoa there Chadi, imho that’s too strong of a statement about Godaddy being the best.
Overall, Godaddy is the *largest* and *cheapest* registrar, built up from their marketing prowess and 60-day lock in rule.
But that doesn’t equate to best. Best would include many other factors like quality customer service, streamlined control panel, ease of checkout, etc. None of which Godaddy excels at.
Big difference.
Not to get too philosophical here, and this isn’t about hippie free love and success envy. It’s about seeing the writing on the wall wrt competition.
Companies that bulldoze their way to majority marketshare always lead to an unhappy ending for the marketplace as a whole (think Microsoft’s embrace/extend/extinguish philosophy, Walmart’s scorched earth policy and NetSol’s shenanigans last decade).
And once that threshold has been reached, beyond the control gained by the dominant position, there’s always a flood of unintended consequences that results.
(soapbox off)
Meyer says
You realize BuyDomains does not pay for
testimonials.
🙂
For ALL sales companies, it is always nice
to have a couple satisfed customers/buyers.
But, this discussion was from the position of
‘domain sellers’ utilizing BuyDomains sales platform.
It is a ‘given’ that BuyDomains has
excellent salesmanship.
Stephen Douglas says
Dub-A,
Here’s what Chuck said:
“Rant? That was a good NameMedia sales pitch.”
That’s exactly how I interpreted your article. Kind of a “dig” with apologetics and explanations of why they’re doing what they do.
If they’re doing something that affects the domain investors outside their camp, which is, selling low on domains by the hundreds because they bought them even lower – that’s what they’re doing. But the conflict of interest is very apparent that they are accepting domains by the millions at their “listing service” AfternicDLS. We all subscribe to it, pay them money to be “involved” with their service, but they aren’t spending any money to promote our domains.
If our domains sell through Afternic, it’s just because someone searched for keyword domains that matched our domain and the price was right. Hardly worth paying 20% commission. Oh well, most domainers are being led down a very dubious road by the biggest domain companies that hold most the cards.
That’s ANOTHER story to write about… which I’ll do when the time is right. I have worked for these companies, I’ve seen what they do. I don’t predict I’ll be working for any large domain companies in the future, because I’m tired of making them rich (I know there are at least 10 guys I know who have done a lot to help EVERY PPC company and registrar make lots of money, and got shafted in the end.
I prefer to continue showing loyalty to those companies who don’t treat me or their clients like they’re disposable. Name Media and their subsidiaries has never done anything for me or any domainer I know about, in making AfternicDLS be a profitable “membership” activity for domainers trying to sell domains. (And I’m not saying that most domainers have domains that can sell).
Just telling you that the way your article panned out, it was a “dang I hate Walmart’s business practices and treatment of their employees, but their prices are so low, they’re doing the rest of us a service!”
When any of us take advantage of benefits given to us by a company that hurts a certain amount of people to give us those benefits, we’re all guilty. Me included.
Afternic Is Scam says
I paid for a domain for $400 to afternic.com on April 17 2017.
Afternic has failed to transfer the domain to my registrar. about 10 days after I heard nothing from them I threatened them to open a dispute on paypal if they dont refund my money or transfer the domain to me. At that time They unlock the domain and sent me the Authcode, When I started the transfer they rejected the transfer in middle.
I opened a paypal dispute in return and Now they are not transferring nor refunding my money.
Afternic.com is scamming its customer.
Screenshot attached.
http://i.imgur.com/3bIXmpe.jpg