Originally posted by hosting3.com
Is it still 70k per year for 1 connection or something, for a ICANN accredited provider, plus hundreds of dollars in security deposit for verisign?
The individual registries all have their own rules and deposit/payment requirements. Verisign requires you to have on deposit with them, a security deposit equal to the number of domains you will purchase in a month. They will stop selling you domains if you sell more than this deposit amount within the month - though you can increase it during the month.
Basic ICANN accreditation requires at a minumum the following:
$2,500 non-refundable application fee. They can turn you down and keep this...
$4,000/year accrediation fee for the first TLD, and $500/year for each additional TLD.
$70,000 in working capital. This requires an independantly verified financial statement, and must either be in working capital or a line of credit.
Maintain a commercial liability policy of $500,000.
In addition to these fees to begin playing, there is a quarterly accreditation fee which varies depending on how many domains you have registered. The most successful you are, the higher this fee. This is one of the reasons that some of the "domain grabbers" who do not offer public registration services immediately transfer their domains to another registrar.
You must also run a publically accessable whois server - on both port 43 and port 80.
This does not count the costs of running an actual registration business - should you open up registration to the public.
If you just registered CNO, the accrediation fees would be about $6k a year depending on volume, and if you sold these domains maintaining a profit of $5 (post cost profit) you would have to sell 1200 domains just to pay the accreditation fees. If you look at the State of the Domain Report and the total number of domains each registrar holds - and the net change in a month - you'll see a number of registrars who are losing money JUST on paying their accreditation fees, not counting the costs of running their business...
Our business plan for becoming fully accredited requires significantly higher registrations than this, maintaining a reasonable profit margin.
As another example, eNom had a 97k registration growth month last month. If they sold all these through resellers averaging a $2 margin, their gross profit would have been under $200k. Their variable costs from ICANN would have taken a chunk of this. They have to pay employee salaries, costs to run their services, etc with the balance. This does not support a large staff - which tells me they are still running off venture capital... Pure speculation of course...
-t
