Starting a Domain Business: Registrar vs Reseller

## Starting a Domain Business: Registrar vs Reseller The domain name industry generates approximately $4 billion in annual revenue from registration fees alone — before accounting for the aftermarket, hosting bundles, and premium sales. Thousands of businesses participate in this ecosystem at every level, from individual domain investors to publicly traded registrar corporations. If you are considering building a business in the domain space, the first strategic decision is where in the value chain you will operate. The two primary entry points are: becoming an ICANN-accredited Domain Registrar, or operating as a reseller through an existing registrar's platform. ### Understanding the Domain Industry Structure The domain registration supply chain has three main tiers: **ICANN / Registries** sit at the top. Registries (like Verisign for .com, PIR for .org, and hundreds of new gTLD operators) control the master database of domain registrations for each TLD. They set Wholesale Price rates and sell exclusively to accredited registrars. **Registrars** are ICANN-accredited businesses that have direct contracts with registries. They purchase domains at wholesale and resell to the public. Major registrars include GoDaddy, Namecheap, Tucows (which powers dozens of whitelabel brands), and Name.com. **Resellers** buy from registrars at discounted rates and resell to end customers. Resellers handle customer relationships, billing, and support; the underlying registrar handles registry communication, technical operations, and ICANN compliance. ### Path 1: Becoming an ICANN-Accredited Registrar ICANN accreditation grants you direct registry access and the ability to act as a registrar. It is the high-investment, high-control path. #### Requirements **Financial.** ICANN charges an annual accreditation fee of approximately $4,000, plus a variable transaction fee based on domain volume. More significantly, you must pay **registry deposits** — typically $70,000–$100,000 in aggregate across the registries you want to access (each registry has its own deposit requirement, ranging from $500 to $20,000+). **Technical.** You must operate EPP (Extensible Provisioning Protocol) connections to each registry, maintain 24/7 system availability at defined SLAs, implement DNSSEC signing capabilities, and pass ICANN's technical compliance audits. **Legal.** You must execute a Registrar Accreditation Agreement (RAA) with ICANN, establish an abuse reporting and response process, designate a compliance officer, and comply with all ICANN consensus policies including WHOIS accuracy requirements, transfer policies, and domain deletion procedures. **Time.** The accreditation process typically takes 6–18 months from application submission to operational status. #### Costs - ICANN application fee: ~$3,500 (non-refundable) - Annual ICANN fee: ~$4,000 - Registry deposits: $70,000–$150,000 (refundable but tied up as working capital) - Technical infrastructure: $50,000–$250,000 (EPP gateway, registrar platform, customer-facing systems) - Legal and compliance: $20,000–$50,000 initial, ongoing - **Total initial investment: typically $200,000–$500,000** #### Benefits - Direct registry pricing (true Wholesale Price — no middleman margin) - Full control over platform, pricing, and customer experience - Ability to run your own reseller program - Direct participation in new TLD launches and sunrise periods - ICANN governance participation #### Who Should Pursue Accreditation ICANN accreditation makes sense for organizations that: - Expect to register 50,000+ domains annually (break-even varies by TLD mix) - Have existing infrastructure and technical teams - Want to operate a whitelabel registrar platform for many sub-resellers - Are building a hosting/SaaS business that benefits from deeply integrated domain operations Large web hosting companies (Bluehost, SiteGround), enterprise software vendors (Shopify, Squarespace), and telecom operators often pursue accreditation for this reason. ### Path 2: The Reseller Model Operating as a reseller lets you build a domain business without the regulatory overhead of ICANN accreditation. #### How Reseller Programs Work Major registrars — particularly Tucows (OpenSRS), ENOM, Resell.biz, and Namecheap — operate wholesale reseller programs. As a reseller you: 1. Fund an account with the wholesale registrar 2. Access domains at discounted rates (typically 5–20% below the registrar's public prices) 3. Set your own retail prices (with floor pricing established by your wholesale agreement) 4. Handle customer billing and support through your own systems or the registrar's white-label panel 5. The registrar handles all technical, registry, and ICANN compliance obligations #### Reseller Platform Options **Standard reseller accounts** give you pricing discounts but minimal white-labeling. Customers may see the underlying registrar's brand in WHOIS or emails. **White-label platforms** (like OpenSRS's Reseller Club or ENOM's reseller program) provide a fully branded front-end where your customers see only your brand. The underlying registrar operates invisibly. **API integration** lets you build a completely custom front-end using the registrar's EPP/API, with full control over UX while the registrar handles backend operations. #### Reseller Economics The margin structure in reselling is thin for commodity .com registrations but improves for: - **Premium aftermarket sales** — listing domains for sale on marketplaces with broker commissions - **Bundled services** — packaging domain registration with hosting, SSL, email, and website builders (where margins are higher) - **Niche TLD specialization** — focusing on specific TLD categories where you can add genuine curation value - **Value-added services** — domain monitoring, portfolio management, transfer concierge for large portfolio holders A typical reseller account structure: | Fee Type | Wholesale Cost | Retail Price | Margin | |----------|---------------|--------------|--------| | .com Registration Fee | $8.50 | $12.00 | 41% | | .com Renewal Fee | $8.50 | $13.00 | 53% | | .com Transfer Fee | $8.50 | $10.00 | 18% | | Domain Discount / Coupon promotions | $7.00 | $1.00 first year | Negative (acquisition) | Resellers often use first-year promotion pricing (funded by the registrar's acquisition subsidies) to acquire customers, then earn margin on multi-year renewals. #### Starting a Reseller Business: Practical Steps **1. Choose your wholesale registrar.** Evaluate Tucows OpenSRS, ENOM, Namecheap's reseller program, and Resell.biz on: TLD coverage, API quality, white-label depth, support quality, and pricing structure. Request demo accounts and test the EPP/API before committing. **2. Define your niche.** The most successful resellers specialize. Options include: - Geographic focus (domains for a specific country/language market) - Industry vertical (domains for real estate agents, medical practices, law firms) - Investor services (portfolio management tools, appraisal, brokerage) - Technical audience (developers who want an API-first registrar experience) **3. Build or configure your platform.** Off-the-shelf reseller storefronts (WHMCS, HostBill) integrate with major wholesale APIs and get you operational quickly. Custom development is appropriate if your differentiation depends on unique UX. **4. Establish pricing strategy.** Run the Domain Cost Calculator to benchmark your wholesale costs against competitor retail prices. Decide whether you compete on price (thin margin, high volume) or value (higher margin, niche audience). **5. Handle compliance.** Even as a reseller, you must comply with your registrar's abuse policies, WHOIS accuracy requirements, and applicable consumer protection laws in your jurisdiction. ### Hybrid Models Many domain businesses operate as resellers while also building an aftermarket trading component — buying domains at wholesale or from the secondary market, developing some into content sites, parking others, and brokering sales. This hybrid model does not require ICANN accreditation and can be highly profitable at scale. Domain portfolio companies like Undeveloped (now Dan.com) and DomainMarket.com started as resellers and evolved into sophisticated aftermarket players with their own valuation and brokerage services. ### The Investment-First Path A third path that does not require either accreditation or reseller setup: pure domain investing. Buying Premium Domain (Registry Premium) names on the Domain Aftermarket and selling them later requires no infrastructure beyond a standard registrar account. This is how most individual domain investors operate. The economics are asset-intensive: you carry Renewal Fee costs on your entire Domain Portfolio while waiting for sales. A portfolio of 100 domains at $15/year each costs $1,500/year to maintain. Sales must cover carrying costs plus generate a return — which requires either high sale prices or rapid turnover. See Domain Aftermarket: How the Secondary Market Works for how the secondary market operates, and economics-domain-renewal-pricing for understanding the cost structure of domain ownership. ### Conclusion Building a domain business in 2026 is more accessible than ever at the reseller level, and more demanding than ever at the registrar level due to ICANN's increasingly rigorous compliance environment. Most entrepreneurs starting out should begin as resellers — the economics are favorable at smaller scale, the capital requirements are manageable, and the operational complexity is bounded. Pursue ICANN accreditation when you have proven the business model at reseller scale, have the capital for registry deposits and technical infrastructure, and have a specific strategic reason (volume, whitelabel reseller network, or deep product integration) that justifies the overhead.