In an effort to convince sellers to list domains a fixed price, Sedo, one of the premier domain aftermarket sites, has changed their commission structure substantially. While I am a proponent of fixed-price listings – 99% of mine are always listed with a fixed price – I feel that Sedo is making a big mistake. Before I jump into my rant, let’s take a look at Sedo’s commission structure.

“All domain transactions are subject to a minimum commission fee, determined by the extension of the domain being sold/purchased.  The party responsible for the commission will pay either the minimum fee (outlined below) or 10% of the agreed sales price, whichever is higher.

Minimum commission fee is 50 USD:

.com / .net / .org / .co.uk / .org.uk / .me.uk / .info / .biz / .us / .tv / .li / .be / .st / .dk / .de / .at / .ch / .name / .ws / .mx / .in / .cc / .to / .eu / .mobi / .nl / .es / .tel

Important:  The minimum commission fee for domains with the above extensions may be waived if the domain is verifiably parked with Sedo for at least 32 days prior to a sale.  This waiver applies to most countries.  The minimum commission for .tel domains cannot be waived (.tel domains cannot be parked).

Beginning October 21, 2009 a new promotion will replace the offer above.  The minimum commission fee for domains with the above extensions may be waived if the domain is both verifiably parked with Sedo and sold for a fixed price.”

The biggest change from the previous structure is the addition of “sold for a fixed price“. This removes much of the practicality of domain auctions that end under $500. Previously, if I sold an LLL.org in auction for $180 and it was verifiably parked with Sedo, their cut would be $18 or 10%. Now, their cut would be $50. Luckily, I was able to test this theory this morning. After a buyer did not pay for an N-L.com  I decided to list it again and start another auction at $60. When that offer came in, Sedo showed that they would be taking a minimum $50 commission on the eventual sale. I *DID* have the domain listed at a fixed price of $395, but this made no difference in the matter as the domain must sell for that EXACT fixed price.

I do realize that this is only a relevant complaint for those auctions that end under $500 and I also know that I am a small fish to Sedo, but as one NamePro member so elequantly put it, “Don’t kill the little fish – they are the future.”