Why???

[mouthfuls]

I don't get it. Why do site charge humongous amounts of money to register a domain (i.e. Network solutions & Register.com) while sites like Registerfly or Godaddy exist and they pretty much do the same thing?

[Allowee]

it's all about the money

[thewitt]

Advertising budgets for companies like NetSol completely dwarf the annual revenue from a company like GoDaddy - so there is no way they can even contemplate selling domains for less than $10. It's all about where you position yourself in the market.

The domain "property" may be the same but the services that a company offers also differentiate it.

Does GoDaddy accept POs for domain purchases? Nope. Hardcopy billing? Nope. Annualizing of the bill with a breakdown of who is each contact for the individual domains within a corporate account? Nope. Why not? Because you cannot do this for the margins that GoDaddy gets with their domain sales.

Hate NetSol all you want, but they still have the lions share of the market, and even at the rate they are losing market share, they will be the leader for another 6-10 years.

NetSol had about 9,000,000 domains in their total number of domains managed in the last SOTD report. If they all renewed this year at $35, that would be over $315,000,000 in revenue.

GoDaddy had about 900,000 domains, which if they all renewed at $9 amount to about $81,000,000.

With gross profits of $29 per domain name (not counting the fact that Verisign/NetSol the Registrar, pays Verisign the Registry the wholesale cost for each domain...), NetSol would have operating cash from the sale of 9M domains of $261M. GoDaddy, at a gross profit of $3 a domain would see $2.7M

NetSol spends more than $2.7M on print ads in one year.

There are very few Fortune 1000 companies who even know that there are alternatives to NetSol, and who don't see any issue paying $35 a year for a domain renewal. These guys spend tens or even hundreds of thousands annually on their websites. The cost of a domain name means nothing to them. The cost to process the domain order internally at these companies far outweighs the cost of the order itself. Internal costs for processing a PO can run as high as $150-$500.

Will there be high priced domain registrars in the future? Absolutely.

Do you realize that there are eNom resellers selling domain names for more than $50 a year? How can they do that you ask? They are selling into a market that knows no better.

Don't get me wrong here, I don't laud NetSol for their service or support model - nor do I appreciate losing corporate business to them; which happens to us every day. We offer many of the same corporate services that NetSol offers at less than half their prices, and we cannot get Corporate accounts to switch to our services either. Why? Because the difference between $15 a domain and $35 a domain is not even interesting to them. Our costs to direct market to these corporations far exceed our profits from the sale, but we believe that in the long term, these contracts are worth pursuing. Time will tell.

-t