Namecheap and GoDaddy battle over domain secondary market – Domain Name Wire

Namecheap CEO Richard Kirkendall and GoDaddy President Paul Nicks traded barbs last week.

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

The disagreement began with Kirkendall noting that GoDaddy blocked some Afternic inventory from showing up at Namecheap. He suggested that GoDaddy did this to try to maximize revenue by getting more secondary market sales from GoDaddy. (GoDaddy retains all commission from sales on its sites.)

Nicks replied:

Twitter conversation between GoDaddy's Paul Nicks and Namecheap's Richard Kikendall

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

First, regarding the Afternic inventory. GoDaddy allows partners to mark up sellers’ prices to earn more commissions. Last month, I analyzed how registrars make these markups of up to 15%.

Namecheap offered a slight delivery 3% instead. He took that hit on his commission but gained some sales because people knew Namecheap had lower prices. I referred a few people to Namecheap to do their aftermarket shopping because of the discount.

Apparently, Afternic allows partners to mark up prices but not to reduce them. GoDaddy removed its NameFind inventory from Namecheap as punishment.

I’m inclined to side with Namecheap on this one. I would agree with GoDaddy requiring registrars to only sell domains at the list price, but if you let them add a commission, you should also let them reduce it. Complaining that Namecheap wouldn’t honor buy-it-now prices doesn’t seem fair given that registrars can raise prices. (That said, if Namecheap hasn’t responded to requests to talk about it, that’s no good either.)

The second part is about 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 seems that Namecheap was late removing an inordinate number of domains. When purchasing an expired domain from GoDaddy that is registered with a partner registrar, the transaction may not be completed as the registrant ends up renewing/transferring the domain. All registrars have different deadlines, but it’s really frustrating as a buyer. I find it especially surprising when a domain reaches the last days of closing and the domain is renewed after it is purchased.

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

I texted Kirkendall this afternoon. He made the following remarks:

  • In addition to GoDaddy removing Namecheap’s Namefind domains, Afternic also removed Namecheap’s wallet from syndication.
  • It was after this that Namecheap decided to withdraw its expiration from GoDaddy Auctions.
  • Namecheap later removed the 3% discount on Afternic names in a bid to normalize the relationship.

It would be a shame if Namecheap no longer sells Afternic inventory. I hope the companies will be able to get out of this.

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