I’ve apparently had an incorrect view on the exact schema and costs of how domain registration works. I had always assumed that to become a registrar (the companies that normal people register domains through) of any .COM domain, you just had to get accredited by ICANN, and then pay $0.20 per domain. However, accreditation is an expensive and tough process, including (taken verbatim from the link):
- US$2,500 non-refundable application fee, to be submitted with application.
- US$4,000 yearly accreditation fee due upon approval and each year thereafter.
- Variable fee (quarterly) billed once you begin registering domain names or the first full quarter following your accreditation approval, whichever occurs first. This fee represents a portion of ICANN’s operating costs and, because it is divided among all registrars, the amount varies from quarter to quarter. Recently this fee has ranged from US$1,200 to S$2,000 per quarter.
- Transaction-based gTLD fee (quarterly). This fee is a flat fee (currently $0.20) charged for each new registration, renewal or transfer. This fee can be billed by the registrar separately on its invoice to the registrant, but is paid by the registrar to ICANN.
- Please refer to http://www.icann.org/general/financial.html for the most recent ICANN Budget to find additional details about invoicing, including options for relief.
- Please refer to http://www.icann.org/financials/payments.htm for instructions on how to submit payments to ICANN.
So I had thought
that becoming an accredited .COM registrar would pay itself off in the first year if you had ~1,177
- BASE FIRST YEAR FEE=$2500 application + $4000 yearly + ~$1500 ICANN operation fee = $8000
- PER DOMAIN DIFFERENCE= $7.00 to register a domain at a good registrar - $0.20 ICANN FEE = $6.80 savings per domain
- TO BREAK EVEN= BASE FIRST YEAR FEE / PER DOMAIN DIFFERENCE = $8000 / $6.80 = ~1,177 domains
but unfortunately, I was incorrect in that you ALSO
have to pay Verisign
(who owns the .COM TLD
) a hefty fee per domain.
So once you become an accredited ICANN register, you have to hook your system up to Verisign, who charges an additional (to the $0.20 ICANN fee) $6.42 per domain. Even worse is that they require you to pay all of their fees up front for the number of domains you plan to register on a yearly basis!!!!
Taking into account these new findings, it would actually take ~21,053 domains (with PER DOMAIN DIFFERENCE being adjusted to $7.00-$0.20-$6.42=$0.38) to break even the first year when becoming your own registrar (as opposed to going through another registrar), YIKES!
I've always personally recommend gkg.net as a registrar, but their registration prices recently took a major hike, like most registrars, due to Verisign raising their per domain fee. I may have to reevaluate registrars at some point because of this.