**Why are they all able to sell the same name at different prices? The pricing models seem very well worked out. Who’s making the money here? The Domain Agents who negotiate the sales of premium addresses… what’s their cut? Are they really representing themselves a lot of the time?**
I would love to hear from an industry insider to give us a little glimpse into this mysterious world.
In: Technology
This is my first reaction here so sorry if this is all not ELI5 enough and hopefully I don’t break any rules. I have worked in this industry for well over a decade though and wanted to try my hand at explaining 🙂
First some background info:
The answers here so far are mostly correct, but also seem to be confusing registrar and registry.
A domain has multiple levels:
google.com is a domainname
.com is the ‘Top Level Domain’ for google.com
A registrar manages domainnames, like google.com, for their customers (or themselves), who can use the domain however they want (within terms and conditions of course): create a website to host on it, forward to a different domainname, only use it for mail, etc. Google is the registrar for google.com, so in this example they manage it for themselves.
A registry manages the entire Top Level Domain, so for example all domains ending in .com (google.com, microsoft.com, etc). Every Top Level Domain has exactly one registry that manages it, in the case of .com it’s a company called Verisign.
ICANN was also mentioned but is not actually a registry or registrar: they manage the world wide DNS (Domain Naming Service), which in the most basic explanation is ‘only’ a translation of domainnames you type in your browser to a set of numbers (IP address) that is used to locate the server a website or mailservice is hosted on. ICANN has a lot of influence on who gets to be a registry, especially for generic TLDs (Top Level Domains ending in 3 or more letters like .com, .online, .tokyo). Country TLDs (like .us or .uk, basically anything with 2 letters behind the .) sometimes follow ICANN guidelines for who may use a domainname, but also regularly add their own requirements (like requiring residency in the country itself).
The last piece of background info is regarding the ‘owner’ of a domain. Technically you don’t ‘own’ a domain, you (or your company) owns the ‘right to use’ a domain. This is entered into the registry’s database by a registrar, using your details like name and email address so you can be identified as what is called the Registrant of a domain.
To sum up:
Registry – manages a Top Level Domain – .com
Registrar – manages a domainname in a Top Level Domain – google.com
Registrant – end user that owns the right to use a domainname – Google in case of google.com
Now to the questions, paraphrasing a few:
Who owns the bulk of these domains?
Nobody. Most potential domainnames don’t exist. In general, domainnames may contain anywhere between 3 and 63 characters before the Top Level Domain. While over 150 million .com domains have been registered, the potential number is way higher (I am no math genius, but 36-ish characters spread between all options of 3-63 characters long, you get the idea). Obviously a lot of potential domainnames are also random gibberish that nobody will ever want to use.
What is the power dynamic between registry and registrars?
A bit long to explain, but both need eachother. Obviously bigger registrars like GoDaddy have more sway in a registry’s policies than smaller ones, but no matter their size, they need to adhere to rules set by a registry to prevent not being able to register certain TLDs anymore. And to protect the stability of the internet ICANN, registries and registrars all work together.
Why are there different prices?
Registries set one price for all domains in the Top Level Domain they manage, with the exception of premium domains (see further down). Registrars set their own markup. Some are cheap, others more expensive. All depending on the sort of customer they want to attract and for example level of support they are willing to provide. Basically that is the free market setting in, in the same way different bakeries might sell a loaf of bread for different prices while using the same ingredients.
Why are some domains more expensive than others in the same Top Level Domain?
There are two main options here: either the registry designated a specific domain as being very popular and sets the pricing a lot higher than usual, or someone has already registered a domain and is trying to sell the domain to the highest bidder. This last thing happens mainly with very obviously interesting domains in certain industries (short and generic are usually properties of these domains).
Domain sales agents, what do they do and for whom?
As mentioned above, ‘premium domain’ is a thing that only a registry can declare. Other domains with exceptional pricing are just being sold by the current Registrant. Domain sales agents are sometimes just the current registrant selling the domain, or act as broker between the current registrant and potential buyers (there’s also specific platforms online acting as brokers). I don’t know a lot about their practices honestly, so that’s as far as I get here.
Edit: tried reformatting and added ‘with exceptional pricing’ in the last paragraph
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