Why domain registrars secretly like VeriSign’s price hikes
Tuesday, February 14th, 2012
They won’t tell you this, but domain registrars kinda like VeriSign’s annual price hikes.
(Just about) every year VeriSign hikes the price of .com domain names 7%. The registrars publicly moan about the price hikes and send notices to their customers about how they have to pass the along the costs.
But consumer domain registrars actually don’t mind. They kind of like these price hikes.
First, they typically raise their prices more than the 7% VeriSign adds. This gives them more profit per domain sold.
Second, they’re able to push early renewals to their customers to beat the price hike.
It’s never easy for companies to raise prices. But when you get to blame a monopoly it’s a lot easier.
Further Reading:
Hey Andrew,
While I think your point might be generally correct, I’d be remiss if I didn’t mention that OpenSRS works on a “Cost Plus” basis. So an increase in the registry price doesn’t help us a bit and in fact costs us for the time and effort it takes to make and communicate the changes.
The price increases may also reduce people’s willingness to buy domains on the spur of the moment, so overall I think it’s a net negative for us (pardon the pun).
Cheers,
Ken.
OpenSRS
@ Ken Schafer – I wasn’t aware of that. All of the retail registrars I know jacked up prices more than the VeriSign increase.
Except Hover of course.
Well, to be fair, Hover has a little margin built in. So does NetSol, Register.com, etc
Both Moniker and Fabulous as far as I can tell raised prices only 50 cents each, which came out to less than 7%. I was kind of surprised by it since normally I’d have agreed with you and was expecting $1+/yr increases, but doesn’t seem to have been the case. Also, for what it’s worth, GoDaddy’s prices with coupons didn’t really go up either.
The only registrar that actually profits from VeriSign’s hikes is GoDaddy. Others are forced to raise the prices while GD, being the largest, can afford to keep prices at around $7.60 using the coupons (not to mention the $1-$2 promotions they often do).
Hm Verisign price for .com is $7.85 + $0.18 ICANN fee the only way Godaddy could afford this is either cross subsidising OR they got secretly discount from Verisign
Many registrars passed on past and present registry price hikes in real numbers, not percentage based. It is a tough marketplace with small margins after all.
Hmmm…my price at Moniker went up 98 cents.