dns – If ICANN only charges 18¢ per domain name, why am I paying $10?


Why do some top level domains cost considerably less than others?

Top level domains such as .com, .net and .biz have fixed wholesale prices negotiated between the registry and the non-profile Internet Corporation for Assigned Names and Numbers (ICANN), which is kinda like a domain regulator

The pricing of older generation TLD domains have a limit what they can be sold for and this limit is set by ICANN which is why some domains hardly ever move in price. However it should be noted that this cap does not include already purchased domains that you often see at auction for thousands of dollars.on.

Newer gTLD’s domains such as .club, .sexy and .security have no ICANN limitations on how much a wholesaler can charge, this also applies to two letter country domains such as .us and .ca.

Whom are these Domain Wholesalers?

Wholesalers is just another term for domain registry, the registry is not to be confused with a registrar, for example Nominet is for registry for ccTLD domains in the UK. Nominet does not sell domains directly to customers, they are sold through registrars, it is Nominet who set the cost of the domain under the agreement with domain regulator.

VeriSign is the registry for .com and are limited by ICANN how much they can charge, but they have many other top level domains that may not have the same agreement.

Where does my money go?

  1. Domain Registrar
  2. Payment Fees (Debit, Credit, PayPal etc.)
  3. Domain Registry / Wholesaler
  4. Domain Regulator

What percentage goes to the regulator, registry and registrar?

The percentage of the sale of each domain varies because it has variables such as:

  • ICANN fee agreement with the registry
  • Registry fee agreement with the registrar.

It’s impossible to know exactly how much the registrar makes because often this is inside only information, some registrars strike better deals than others depending on the volume of sales they expect to meet, but what can be said for certain is that the registry will receive the most money and net profit will only be made once the sales exceed the cost of their application and yearly regulator fees.

It’s worth pointing out that gTLD domains generally cost more because the application for such domains run into the £250,000+ excluding the annually fees.