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How the commission discounts work.
Yesterday, Afternic announced it’s launching lease-to-own (LTO) deals. The company will charge buyers a service fee for longer-term deals and will share some of this fee with sellers in the form of reduced commissions.
There has been a bit of confusion about this, partly because Afternic has a two-tier commission structure: 15% if the domain is parked on an approved server and 25% if it’s not.
So officially, here’s what Afternic is charging buyers:
And here’s how discounts are passed down to sellers:
So if you park your domain on an approved nameserver and the buyer selects a term greater than 36 months, the effective commission of your list price will be 0%.
If the domain is parked elsewhere, it will be 10%.
This is very similar to how Dan.com has run LTO since the beginning. It charged the same markup and then split the markup with sellers.
For example, yesterday Kellie Peterson sold mega .xyz through Dan.com LTO for a list price of $129,000. It was parked at Dan. The buyer opted to pay over 60 months, so the total was $167,700 with the 30% service fee.
This means Kellie will effectively pay 0% commission on her ask price of $129,000, divided across 60 payments for as long as the buyer keeps paying (fingers crossed!).
Categories: Domain Sales
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says
So Kelly will save $19,350 over the period of 60 months and Afternic will make $38,700 over this period. Am I right?
says
That is correct Aamir. Certainly the 37+ month leasing plans work out best for the seller if A) the seller can afford to wait to collect all of that cash, B) the buyer doesn’t actually default (and the longer the term the more likely that is, but seller retains the asset), and C) the financing charge doesn’t put off the buyer – but the buyer selects the term so it’s up to them what they can afford.
says
That’s right Aamir.
says
Thanks for sharing.
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