Industry Spy: Domain & Hosting
By Ryan Bradman
Domain reselling is a widely popular business on the internet today and the world wide web is replete with several glittering ads and all smiles faces claiming to earn a fortune through this simple and almost free business.
Take it with a pinch of salt but yes, even if we cut the flab, we would still agree that if practiced properly, the domain reselling is a business that can offer a sustainable income, high growth opportunities, and a good profit! But what about domains that sell for jaw-dropping amounts!
Premium takes can shoot up your income instantly but selling names like insure.com is externally rare and depends upon your good stars. Occasionally we do come across positively surprising prices. However, it needs extra grey matter and keen business acumen that you “can’t learn but earn with experience!”
However, as with any other promising business, the domain name business also attracts the attention of the elements that resort to questionable practices for gaining maximum profit. One such practice is Domain Name Front Running.
What is Domain Name Front Running? (In detail)
In short, it is a practice that involves monitoring your domain inquiry activities and immediately register any domain name that you searched for but didn’t buy. The objective is to sell that domain name to you at premium prices. Apart from that, the same or similar practices can also be used by businesses to discourage competition and enjoy a certain monopoly. We would know about the same in this article:
A typical scenario of DNFR (Domain Name front Running) Incident…..
* Suppose you are searching a great domain name for your laundry services and search the availability and prices of www.xyzlaundryservices.com at a registrar site. It is available and priced at 5 USD
* You didn’t buy the domain instantly and went to other sites for price comparison
Meanwhile…
* Someone followed your online query and immediately registered the domain name www.xyzlaundryservices.com
After a few seconds…
* Not finding any better offer you again returned to the same site and buy the domain name www.xyzlaundryservices.com but to your utmost surprise the domain name has already been registered by someone else
Your Loss: Now you will have to buy the domain name from the reseller at premium prices and instead of paying USD 5 you may need to pay USD 30, USD 50 or any similar fancy price!
Other’s gain: The domain seller (Let’s call him Mr.Com) didn’t have to do any intense market research or adopt any business strategies to buy and resell the domain names. He didn’t even have to buy a website to list the domain names. All that Mr.Com did was stalking your online query and registering your desired domain name at negligible prices. He sold you the same domain name at a premium price and earned the hassle-free profit without incurring any running cost.
DNFR…behind the scenes
More studies are needed to prove that such practice exists on a fairly large level and is prevalent on a wide scope. However, it is assumed that some insiders with access to the key information collect the required data, check the availability of searched domain names, and then buy them instantly to resell them at premium prices. Availability of a huge number of DNFR victims’ records it can safely be assumed that such practices do exist on significant levels.
Similar Practices by unscrupulous name registrars
The above context reminds of a similar interesting case that was unearthed some time back. A specific registrar company was found to be practicing a smart technique for escaping competition and enjoying a certain monopoly on most saleable domain names.
They would monitor the domain searches done on their domain registrar site and instantly register all the domain names that were searched. However, it was somehow different from Domain Name Front Running as the company would still sell the domain names at an advertised price without hiking it. But, as the domain name was already registered by that specific registrar, it deterred the other registrars to sell it. It helped the company to remain largely unaffected by competition for specific domain names (that were searched on its portal). The registrar company intended to discourage the competition.
Now the ethical propriety of such practice is highly debatable. While this case cannot be termed as Domain Name Front Running, it did discourage the healthy competition using unprofessional means. Besides, their advertised prices were said to be way higher than the competitors.
Real Vs.Hype
There could be some reality in it but the matter has been heavily spiced up on the internet. The speculations and assumptions have been offered unnecessary length while real research data is least talked about. Anyways, being on a safe side doesn’t harm. So what’s the harm in taking precautions while you purchase domain names? Here are a few useful tips to remember before you buy domain names
* Instead of checking the desired domain name availability with several different registrars, you should try to go directly to the registrar from where you want to buy the domain name.
* Minimize (if not eliminate) the online research steps requiring you to submit your desired domain name. Even typing that name in the browser can attract the attention of online predators.
* It is not wise to check a domain name and then keep on comparing the prices. Especially, if it is a question of just a few dollars, avoid taking the risk of delaying much. The more you delay the higher is the risk of losing your desired domain name to someone else even before you buy it.
* In the case of confusion among several domain names, consider buying the entire set if you can afford it. You can resell the unused domain name later.
* Never post a query in domain forums, networking sites or Facebook groups asking a suggestion for the domain name you wish to buy. It will allow unscrupulous Domain reseller to immediately register your desired domain name and sell you at premium prices.