My accidental afternic experience (3.Viewing)

Well, I apparently had an old dan listings that I still hadn't deleted, and they got ported automatically to Afternic. I had abandoned Dan landers a long time ago and changed the nameservers back to other free landers or my own. But yesterday I get an offer from Afternic/godaddy broker making a gross offer of $12,474 USD for a one-word domain. The old listing price was $25K USD at Dan. So I asked what's the commission or net to me? I said that as a Canadian corporation I also have the obligation to collect & remit sales taxes, which I can't do unless I know the buyer. I said that if I find out AFTER the transaction that would be fine. This was their response:

Hi Rob, thanks for your message.

Currently the sales commission is 30%. If sold at $25,000 USD gross, net proceeds would be $17,500 USD. For more information about our sales commission, please see here: Sell Domains | Buy Domains | Park Domains. You may qualify for 15% sales commission if you remove "Boost" on the listing and update the nameservers to the following:
ns1.afternic.com
ns2.afternic.com

How to deactivate Boost:

• Log into your Afternic.com account.
• Top right, click on your name, then "My Account"
• Click on "Setting"
• Click on "Afternic Boost" tab
• Click "Downgrade"

In regards of the buyer's country base, we are unable to disclose any information about the buyer. If a deal is done, our transaction assurance team will handle the transfer process & payment to you.

Please confirm the asking price and floor price in gross value.

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So I responded with:

What the hell is boost? I certainly didn't opt into that and nor did I agree to Afternic's 30% commission structure.I also have tax obligations and part of that requires knowing the buyer and the buyer's billing address in order to apply the appropriate tax.

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So unless Afternic/GoDaddy is going to be the buyer (and not broker) and is willing to pay those taxes and use their Canadian billing address, then I don't want to have anything to do with a system that avoids proper taxation procedures.

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So the only way I'll proceed with any transaction here is under the following terms:

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1. I need to know the name & billing address of the buyer at the conclusion of the transfer. I understand the anonymity before conclusion, but I would need Afternic/Godaddy's assurance that the buyer information will be turned over after the domain is transferred. You can easily get permission from the buyer to do so.

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2. I'll honour the original price listing of $25K USD and the original commission of 15% I had with Dan.com, such that I net $21,250 USD, sales taxes inclusive. I will have to back-calculate the effective sales price based on the proper tax rate which is based on the buyer's billing address. I will then create an invoice reflecting the proper tax amount and my corporate tax ID which the buyer can then use to claim back the taxes as an Input Tax Credit.

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Alternatively, please just cancel the negotiation and I will delete the domain from afternic. I have already deleted the rest of the domains.

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Their reply was:

Hi Rob, Please see this article that will explain what "boost" is: Introducing Afternic Boost: More domain visibility, more domain sales - Afternic Blog

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As we are unable to share any information about the buyer, I'll close this inquiry. Best,

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I feel like my request for buyer information is certainly reasonable after the conclusion of the transaction, otherwise how is one to handle GST or HST? I don't even know what rate to charge or remit. And if the buyer was willing to agree to that, why would godaddy/afternic care? The buyer could claim back their taxes and no one would be at risk of tax evasion. Yet I'm pretty sure the broker didn't even bother to ask the buyer if that was ok.

In the end, they closed out the inquiry and I deleted the domain (along with the rest of them).

I avoid all of these platforms because:

1. out of control commissions & fees
2. not flexible with currency
3. refusal to handle proper taxation issues
4. lack of customization to landing pages
5. I want to know my customer, like every seller should
6. no control over what the broker is telling (or not telling) the buyer
7. no ability to pitch the sale or educate the buyer
8. not flexible with terms, payment plans, JVs, etc...
9. complete lack of transparency in the entire transaction which benefits everyone but me

Anyone have any other points to add to that list for reasons not to work with a sales platform/broker??

Maybe I'm shooting myself in the foot occasionally, but I really don't care.

There is a lot of power in having direct access to the buyer. I find that the best sales are often the ones that happen because you picked up the phone and called the buyer and built up some rapport and trust.

Oh, I just thought of another one.

So the buyer is going to pay taxes one way or another because I will have to build it into the price. So by going through a broker, you are paying commission on the taxes too. And then you have no way to recover the taxes as an Input Tax Credit. So, lets say you are buying a $10,000 CAD domain (net to the seller). They add enough to cover taxes (which is up to 15% in Canada), so now we're now at $11,500. Now they add enough to cover the 30% commission and that adds up to $14,950. So you just paid 49.5% more than the you should have, all for the luxury of having gobaddy be your broker.

I have a trick I use...

One of my catalogs is listed at all the services but the name servers are not pointed, so when I get an offer I simply ignore it knowing the potential end user will eventually type the domain in the address bar and come to my lander.

So you can still use the services but pay 0% commission.

SAW.com communicated with a client using AI which I hated. You are not able to turn it off and it made me stop using SAW on my test catalog.

DomainEasy, hides most of the customer info so giving up that control for a temporary 0% which will change, also made no sense.

GoDaddy... give me a break, that is a whole new subject.

Every single one of my domains hits my lander... see Pure.ca as an example.

Lastly... lets give an example...

Domain1.ca acquired for 10k

Domain1 sold with boost no name servers at 30%

Sold for 20k, great profit right?

Commission = $6,000 + HST

Technically that is 60% once you factor in acquisition cost, plus anyone without a real business claiming sales tax has top absorb the additional 13% sales tax.

Plus if it's just a part time business they run the risk of having to pay income tax.

I estimate more than half the domainers I know don't claim sales tax and such so absorbing the sales tax is a real thing.
(don't be that guy, make it a real business, the sales tax matters).

If you were to factor in the sales tax on the whole amount the cost is now 86% and you would think that is all right?

Nope, if you paid through TBR you also had sales tax on the 10k at 13% now add that $1,300 which now takes your cost to $9,900 giving you a grand total profit of...


Are you ready????


$100 if you do everything wrong

MapleDots said:

$100 if you do everything wrong

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Yep, and I keep telling people that domain math will absolutely kill you if you don't understand and respect it.

If they really want the domain you’ll probably see an offer come in on your own lander now.

Wherever anyone lists they really need to look at all the fees and rules to make sure they’re ok with it. Obviously in this case you didn’t even know the domain was listed there after Dan closed, so hopefully this is just a one off situation. the fees are crazy if the domains are pointed.