How do registrars price domains?

[Voodoomoodoo]

I've been wondering this for a long time: How do registrars (such as GoDaddy, Namecheap etc) decide on the prices of domains. For instance, we all know that a .com is different price to a .io etc etc.

Does anyone know how this works?

Additionally, how much do registrars pay ICANN etc?

I'd love for someone to enlighten me, or even point me to some resources (i've googled this, but most posts seem to be very vague and lacking in concrete information).

 

[Chirag]

In My Opinion, the amount paid by registrar to ICANN depends on number of sales it does. And Based on that Registrars decide their pricing structure. Biggies like Godaddy must be banking more on renewal profits rather than profits on registration (as thr registration price is quiet less if you use coupon)

 

[tomcarl]

I assumed GoDaddy was breaking even or actually losing money with coupons but makes up for it in renewals. I can only speculate that I believe that has something to do with price structure. It depends on the business model of the particular registrar. Sometimes they'll lower registration fees to where they break even or lose a dollar, others will charge the full amount possible, etc. All their personal strategy.

 

[Kate]

I've been wondering this for a long time: How do registrars (such as GoDaddy, Namecheap etc) decide on the prices of domains. For instance, we all know that a .com is different price to a .io etc etc.

That depends a lot on their target market.
For example, Netsol or register.com charge $35 per year for a domain without any special add-ons.
This is because they have a lot of corporate customers (that don't move domains a lot) and old clients from the early days.

Then you have registrars like Namecheap, that are discount registrars.

Others like Enom rely a lot on resellers and have a tiered pricing structure.

Of course, the big registrars are able to attain economies of scale.
But nonetheless Nodaddy has apparently been a money-losing venture for most of its history.

Additionally, how much do registrars pay ICANN etc?

It depends on the extension.
For example, I think it's $7.85 for .com + Icann fee.
The registrars pay a fee to the registry for each domain they register. But Icann also get a small cut for gTLDs.

 

[Voodoomoodoo]

Interesting. Thanks guys.