Where does your money go

[Entreprenuer]

Who gets paid when someone registers a name who owns all the domains of the world to make money on them?

 

[Gene]

Would you kindly rephrase that? I cannot make heads or tails of your question. Very confusing.

 

[Entreprenuer]

what i mean is where does my 8 dollars or what ever actually go when i purchase a domain
how much does a domain cost godaddy for example and who are they paying to get the domain. If they were free to godaddy.com why can't everyone register them for free

 

[Gene]

I believe the current price is $6.00 to registrars like GoDaddy. There are tens of thousands of domains being registered every day. Somebody has to manage all of that data. Someone has to be fully accountable and responsible if domains get lost. Someone has to provide the bandwidth and equipment. How can this possibly be done for free?

And consider this. If registering domains were free, every possible domain would be registered. EVERY one. There would be NO domains available.

 

[yandig]

I'm interested to find out the answer to this question as well. Is it Verisign who's making all the dough on domain sales? I know registrars like Godaddy get charged for each domain purchase, but I'm not sure who's charging them.

 

[Fleege]

Al Gore - AKA - The founder of the Information SuperHighway.

no seriously - good questions.

 

[Bannen]

I don't know enough about this either; but from what I gather, ICANN gets only a small fee per reg (.25 cents) from every registrar; some registrars include this in the sale price, others tack it on top.
But aside from that, I haven't found where any registrar pays any other fees out of your reg fee, to any 'overlord' governing agency; I think that's what ICANN is for, and all the other coin goes to the registrar for their (considerable) services provided for each of your regs.
I'm assuming that's why there can be such huge sways in reg'ing any name; you can pay anywhere from 1.99 to 30 clams to reg a dot.com, depending on where you go, and it doesn't make sense that they'd have to give a further chunk of that to someone else...
Anyone know more than that?

 

[Gene]

I don't know enough about this either; but from what I gather, ICANN gets only a small fee per reg (.25 cents) from every registrar; some registrars include this in the sale price, others tack it on top.
But aside from that, I haven't found where any registrar pays any other fees out of your reg fee, to any 'overlord' governing agency; I think that's what ICANN is for, and all the other coin goes to the registrar for their (considerable) services provided for each of your regs.
I'm assuming that's why there can be such huge sways in reg'ing any name; you can pay anywhere from 1.99 to 30 clams to reg a dot.com, depending on where you go, and it doesn't make sense that they'd have to give a further chunk of that to someone else...
Anyone know more than that?

Sorry, but that is not accurate. It costs all registrars approximately $6.00 per registration. When a registrar sells for $8.95, they make under $3.00 profit. Some registrars sell wholesale for $6.75, and make only 50 cents to 75 cents because they only sell wholesale to volume buyers.

 

[yandig]

Found this:
"Currently, VeriSign charges a base fee of $6 per domain name to resellers, which then can charge what they wish to register domains for consumers."

 

[Bannen]

Thanks Gene. More questions:
That $6.00 cost for the registrar... do they pay any of that to someone, or is that their estimated cost just for their own managing of your domain?
And how could 1and1, for example (I know people hate them), afford to charge 5.99 for every dot.com/dot.net? And other registrars who sell even cheaper... are they actually losing money on each reg at that price, just for the sake of trying to get more $ from us for other services?
To clarify, I think the question we're all asking is, do registrars pay money to anyone else (aside from the ICANN fee), or is it entirely theirs, for the services they provide?
I don't know any of this.

Found this:
"Currently, VeriSign charges a base fee of $6 per domain name to resellers, which then can charge what they wish to register domains for consumers."

That seems to answer a question; do all registrars pay this fee to Verisign?

 

[Gene]

And how could 1and1, for example (I know people hate them), afford to charge 5.99 for every dot.com/dot.net? And on and on. And other registrars who sell even cheaper... are they actually losing money on each reg at that price, just for the sake of trying to get more $ from us for other services?

Some go even lower. There are usually strict limitations, like how many you can reg at that price etc. They are simply trying to get more clients, by losing a buck or two. Think of it as a form of advertising. Instead of throwing big bucks at TV spots, they entice customers with below cost pricing. They know that a portion of them will renew at regular or inflated prices. They know that a portion will purchase other services. They know that a portion will buy at regular prices just because they already have domains in their account that they previously purchased at below cost.

 

[.Matt]

Interesting question there!

I never fully knew how much money went to registrar etc. Nice read! ~ Reps shared! :tu:

 

[Bannen]

I get that now. Just the big question left - who do Godaddy, Namecheap, all other registrars pay that $6 fee to? Is it Verisign? And why?
Thanks for the input.

 

[combs84]

I get that now. Just the big question left - who do Godaddy, Namecheap, all other registrars pay that $6 fee to? Is it Verisign? And why?
Thanks for the input.

That was answered 4 times.

 

[Bannen]

My domaining pard and I use some of Verisign's services - and pay a hefty sum for them - but we didn't know that every registrar out there pays them 6 clams for each registered name. Had a look around their site for this info, but haven't found it yet.
Yes, the question was answered in ways that might be obvious to those who already know these things... but I'd never heard this before, and I wanted clearer statements and more in depth reasons. I like to know very accurate and clear specifics about anything I may be talking about later. I'll go looking around for them. Bannen out

 

[hawkeye]

didn't know that every registrar out there pays them 6 clams for each registered name

.

They only oversee .com's and .net's. Other tlds are done by other companies.

 

[Entreprenuer]

wow this in depth for a question i thought only i didn't know the answer to

 

[stscac]

Al Gore - AKA - The founder of the Information SuperHighway.

no seriously - good questions.

:lol:

Registrars like GoDaddy pay between $4-$6 for every domain registration to ICANN. That is why they want you to biu their other software products and services so they can turn a higher profit.

-Steve

 

[Bannen]

That goes against the above statements that the $6 fee is paid to Verisign, and only a .25 fee goes to ICANN for each reg. Very confusing; explain?

 

[stscac]

That goes against the above statements that the $6 fee is paid to Verisign, and only a .25 fee goes to ICANN for each reg. Very confusing; explain?

Thanks for catching me, I meant to say Verisign.

-Steve

 

[localpub]

For .com:

USD6.00 goes to Verisign (this will increase, as per current Verisign/ICANN aggreement)
USD0.25 goes to ICANN

Everything else is registrar's profit.

For different TLDs, registry's portion is different and not all TLDs are paying to ICANN.

 

[Lasher]

Verisign, symbol VRSN

From reading this board all weekend, timed with the oversold situation of tech stocks after last weekend, it seems like the smart way to play domains may just be to buy Verisign stock and go to the beach for a year

 

[Milk]

Just want to add my two cents to this conversation. What everyone has said is true for .com/.net the fee of $6.00 goes to the registry (Verisign) and approximately $.25 goes to ICANN. Now the registry manages the master list of all domains registered, registered name servers, and who faciliated the domain registration (Registrar of Choice IE GoDaddy or Network Solutions). Now the registry also keeps lists of all of the IP address for .com/.net domains, now each different TLD can have a different registry, for example .biz is done by Neulevel (I believe a part of Neustar). Now each registry can and sometimes does set a different price range for domain registrations. For example because they are trying to grow the .info registry they are probably offering discounts on registrations, this locks in more customers who as said previously allows the opportunity to re-register domains later at a higher cost. This benefits the registrar, the registry and the end customer since everyone wins. This is also why there are variations in specific domain processing, for example a transfer of a .biz or .org requires a Transfer ID, Authentication Code or other information obtained from the losing registrar.

If you have more in-depth questions please feel free to PM me.

 

[localpub]

What everyone has said is true for .com/.net the fee of $6.00 goes to the registry (Verisign)

Let me correct you here.

$ 6.00 is NOT true in .net case. I can't tell you exact amount, but it's something like $4.xx (I have strong feeling that this is 4.25, but can't guarrantee). This is part of Verisign agreement with ICANN about taking over .net, I believe.

The worst part of this is that not all registrars are passing these savings to customers...

 

[holeinone]

No for .net its $3.50 for verisign and $0.75 for ICANN fee.