Due to a recent question on DNForum by DNGod (“Can buy ICANN-accredited registrar“), I decided to finally update and publish this post, which had been sitting around as a draft for a while. Thank you for the inspiration 🙂
Apply versus Buy
If your organization has decided to become an accredited registrar, there are two choices in order to become operation. You can either apply for a new accreditation, purchase a company that owns an existing registrar or lease an existing registrar. Either way has it’s advantages and disadvantages.
While we will also be looking at the cost of the actual transaction, please keep in mind that this article does not consider the actual cost of running a registrar, which is the same, no matter if you buy an existing accredited registrar or apply for a new accreditation.
Buying an existing Registrar
In reality in most cases you will actually not just be buying a registrar accreditation, but rather a company that is ICANN accredited. The price point is up to $30,000 USD for an offshore registrar, but we’ve seen prices under $10,000 USD recently. In most cases you will be operational faster than when going through a new registrar accreditation, but there are a number of other factors to consider. Most likely the registrar you will be buying is at least accredited for the COM & NET registries.
One time Cost:
- $10,000 to $30,000 USD
- plus reimbursement of any deposits/fees (registry credits)
- Lawyer Fees
- Possible Consultant Fees (about $2,500-$5,000 USD)
- If you are planning to have a retail presence, you may be starting out with some existing clients.
- You don’t have to incorporate a new entity.
- Existing contracts may mean a delay before the registrar is yours and yours alone, for example if the registrar was used for drop-catching domains, there may be a 3 month notice needed in order to allow the drop catching registrar to attempt to move out their customers.
- Depending on the responsiveness of the seller the sale may slow down as well.
- Many registrars that are for sale are only set up to register a limited set of TLDs, so adding additional TLDs may be as time consuming as it is for a new accreditation.
- Depending on where the company is registered you may have to change the jurisdiction of the company.
- The registries may ask you to re certify and re-file paperwork such as credit applications once they are notified about the ownership change.
- ICANN usually asks registrars with an ownership change to re-verify that the new owners meet all the requirements of the Registrar Accreditation Agreement (RAA).
- You may have to continue to use the registrar system that the registrar has been using before, depending on your needs and existing contracts.
- Enlist a lawyer’s help to review the purchase contract.
- Make sure the seller has provided you with all of the credentials & access for ICANN & the registries.
- Ensure you are aware of any existing obligations contracts of the registrar, as well as any potential earnings.
- Make sure that the registrar is in good standing with ICANN and all the registries and has been fulfilling all their requirements according to the RAA. Examples to watch out for here is for example the compliance with Registrar Data Escrow program.
Applying for a new registrar accreditation
One time Cost:
- ICANN Application fee ($3,500 USD)
- Possible Consultant Fees (usually from $6,000 to $10,000 USD)
It is important to note that there may
- Proof of $70,000.00 USD working capital required (letter from bank etc.)
- Commercial General Liability Insurance coverage of at least $500,000 (can be purchased from $500 USD & up)
- No existing registrants to worry about.
- Starting from a clean slate, you don’t have to worry about the registrar’s history
- Accreditation process can be time consuming.
- Time frame for the completion of the accreditation can be unpredictable, but can be as fast as under one month.
- Try to partner with a company that has gone through the process before and already has personal contacts at the registries and registrars.
- Select your technology partner early in the process in order to ensure speedy completion of the registry signups and tests.
Leasing an existing Registrar
While this used to be a third option through an offering such as MyRebel.com (which appears to have been discontinued), we’re not aware of any current offerings allowing you to lease an existing registrar, but in order to be complete, I’ll still list our recommendations.
- Leasing a registrar does have a low initial setup fee.
- The monthly cost, which includes access to a simple hosted registrar management interface, is about $1,500 USD per month.
- You can get started quickly without having to wait to change ownership on an existing registrar or needing to complete paperwork.
- You have full access to the registry interfaces.
- Any transaction is directly sent the registry, so you see the unfiltered registry response without any delay.
- Since the service includes a hosted solution the service provider takes care of issues such as RDE, WDRP compliance and other code updates.
- The registrar is not owned by you.
- You depend on the provider’s technical staff to provide you with access to your registrar.
- You do not have control as to where the leased registrar is incorporated.
Conclusions and recommendations
If you are not in a huge rush to start using your ICANN accredited registrar, I would always recommend applying for a new accreditation rather than purchasing an existing registrar.
Disclaimer: DomainCocoon provides ICANN Accreditation Consulting, Frank Michlick is the founder of the company.