Author: Francois
May 27, 2012

Hi,

I started this post few days ago but as I had the mind at the level of my shoes I did not found the courage to finish it. Today I received the email asking to renew my blog’s hosting, it’s when I noticed my last post was posted in August, in other words, my posts are costing me a hundred dollars!
It’s time to lower my cost per blog post, but unfortunately I will start with a bad story:

As Rick Schwartz uses to say, numbers don’t lie!

DONA.com has been launched 10 days ago, and after a good media coverage from the domain industry the numbers are here:

- 0 registrations.
- 0 transfers.

It may looks a joke but it’s real. I got a true slap!!!

 

 

Below you can find ranked by date few headlines (thanks for the coverage) from Domaining.com about the service so you can better understand if you miss the DONA promotion:

My initial idea was to launch a registration service allowing us to help finance the Internet Commerce Association (ICA).

 

Home

I thought:

If domain owners are reluctant to donate money to help the association who defends domain owners rights maybe they can indirectly contribute by using a domain registration service where a significant part of the profit is reversed to ICA.

So I used my most valuable domain: DONA.com (DOmain NAmes) to launch this service.
As I don’t have enough resources, nor software, nor staff to be a registrar myself then I simply wrapped the popular ENOM reseller service under the catchy DONA name.

I wanted provide the best registration price so I started with a .COM registration price at $10.50 ($0.28 as gross margin).

The registration price was very attractive but not for the main audience targeted: domainers!

So it became critical to quickly find an extra to justify a higher registration price, it’s when the “UDRP insurance” concept was invented. But the problem was with a so small margin it was impossible to offer this extra, so the registration price was raised to $11.15 ($0.92 as gross margin).

But despite most people claimed having found the concept attractive the numbers don’t lie: DONA has been a failure!

The main causes are probably:

  • Nobody like to change of registrar.
  • Registration price is the #1 concern of domainers.
  • Help ICA don’t motivate to spend a bit more on registation.
  • All domains don’t deserve to be defended.
  • Domain owners are only willing to “insure” their better names.
  • Everybody think insurance is a lost of money, that UDRPs happens to others.

On my end I must assume:
As a reseller I will never be able to offer the low prices domainers expect because my ENOM reseller rates are already over what cheapest registrars are offering to domainers and/or registrars are constantly offering big discount coupon.

So should I totally abandon or try a different approach like offer the UDRP insurance as a standalone service domain owners can use for their best names without have to change of registrar?

After having contacted few domainers for their “real feedback” it’s clear they should only be willing to use such service for their best premium names and/or the ones at risk.
In other words, the names for which the rate to get get an UDRP is the highest, this means probably such service should charge annually $50+ per insured name to can cover UDRP refunds!!

So today my decision has been taken: The “UDRP insurance” service has been cancelled.
Rates have been raised at DONA to be in the average others registrars are asking to the public.

Maybe I opened the eyes of established registrars, and in the future they will propose something around the “UDRP insurance” or will help finance the ICA. If this should happen then my failed attempt will have not been a total waste of time.

The lesson is you can have a very great name (DONA.com), an innovative and original idea (UDRP insurance), good intentions (help finance ICA), a good promotion (bloggers coverage + ads), the first point is offer a service that can fit needs and make sense for the user or nothing happens. I am certainly too fast to implement my ideas!

In a more positive note I am already working on a new service that has absolutely no relationship with DONA but again with domains (I am persistent). I just hope it will have more success, even if according the numbers of DONA: It’s sure!!!
..


17 Responses to “The UDRP Insurance project has been CANCELLED!”

  1. Dietmar Stefitz says:

    Francois, I apreciate your openness in your statements.
    You are really doing great things for the whole Industry, and you are never getting tired in trying new things.
    Some work, some don’t. Please keep on trying !

  2. Jason Stewart says:

    Hi Francois,

    I must say I commend you on your efforts and a great concept. That said I am not surprised, in the past I have also tried to launch a re-seller and the results were similar. The margins are incredibly so, and GoDaddy really has the market cornered, domain name registration is not a market I would want to compete in. The low margins are also some registrars push hosting, SSL and the works, thats where the spreads are.

    Cheers.
    J.

  3. Francois says:

    @Dietmar
    Alrededor de mi me dicen que pare ya lo de los dominios que eso no da nada. La verdad es que hasta ahora no he conseguido crear ningun servicio acerca de los dominios que consiga darme de comer, y cada vez es mas duro tener la fe. Espero encontrar algo pronto porque la cosas se estan poniendo chungas!

  4. Francois says:

    @Jason
    You are right but I think domain resellers can still do well, but not targeting domainers. Sites like Register, NetworkSolutions, … are charging up x2 x3 the cheapest registrars. Now the ones who want to compete with GoDaddy, … are obligated to do incentives, coupons, sell at loss and after try to make money through hosting, SSL, …

  5. steve says:

    Wow you found out domainers are single minded, only for themselves, and work alone.
    Domainers fight domainers more than anyone.
    But you gave Godaddy an idea to patent with the other 1000′s they have.

  6. andy kelly says:

    Francois

    I wouldn’t give up on this just yet.
    You got great traction initially with this with Ron and other bloggers covering it and it is a great idea.
    Others will replicate so Jason is right but if you keep at this and try other marketing ideas you have to be onto a winner.
    Even dropping your already reasonable (for a reseller) reg rates as much as possible (even if it means making nothing initially)
    There are other ideas that will help

    Running competitions
    Special transfer in deals etc

    regards

    andy

  7. Francois says:

    @Andy

    - As a RESELLER, even earning $0 commission on domain registration my rates will be higher than the cheapest registrar are offering or domainers are getting for volume. So I cannot definitively compete on price.

    - In the other hand I just remember you I promised to reimburse up to $5,000 for each won UDRP. If I look at my own stats, less than a hundred catchy names has been sufficient to be hit by an UDRP in less than 4 years and apparently domainers will only use the service for their best domains (the most appealing for hijack) and the ones with the more risk (trademarked). It appears that statistically it’s probably a gross margin of dozen dollars that I should charge the .COM to just to can cover won disputes, and I don’t speak about what will happen if URS should be accepted… The only solution is having a VERY HUGE volume, and stats not outline that this should happen.

    - Last point, if when the service got the more promotion thanks to blog posts I got ZERO!!! registrations how much should I expect further when nobody will no longer speak about it? I think I got more than clear signs this will NEVER work!

  8. Eric Borgos says:

    I am not an expert on this topic, but I think in the USA you legally would need to register as an insurance company in each state to offer any type of insurance. That would take a huge amount of time, effort, and money.

  9. Francois says:

    @Eric
    When I was working on the project “UDRP insurance” is the term that naturally came to my mind to describe the service. But yes you are right, this is the reason it was scheduled to reword it differently if the service should have continue. Example: Dispute assistance.

  10. Francois says:

    @Steve
    Personally I feel there is such abuse regarding Internet patents.
    Many company are spending their time and money trying to patent almost any existing or popular web process in a way that after this blocks anyone that would like/need to implement something similar.
    It’s a true shame!

  11. Matt says:

    Ah that’s bad luck man, I think it’d hard to compete while other registrars are releasing their “$2 coupons”.. Not easy to compete with that. I still think this UDRP insurance idea is a good one as a stand alone product.. I think there are plenty of domainers out there who might be interested in it. If I owned any 3 letter .coms I would almost definitely buy UDRP insurance for it.

  12. Francois says:

    @Matt
    But will be you interested on paying $50+ per domain and year for this?
    This is the question because probably it’s the bottom rate for which this service could works without losing money.

  13. Dave Zan says:

    In the long run, it depends on what you want, and what you’re prepared to do. While your planned UDRP insurance wasn’t necessarily realistic, at least you tried.

    Wishing you well still. Cheers.

  14. Joe says:

    I’m sure your idea was great, Francois, but I think the main reason for what you reveal is pricing. Yes, as someone has pointed out, it’s hard to compete with large registrars issuing $1-$2 almost weekly.

  15. andrewli says:

    Francois,
    This was another great idea whose time may not have come yet. I do believe the higher cost model you discussed is justifiable especially if you’ve invested thousands of dollars in a domain and fear a UDRP challenge. I know I have this fear that because I just park my domains someone will come along and try to take them because I’m not actively marketing the “brand”. With the recent UDRP decisions favoring challengers (not domainers) I believe this to be a very real threat and concern. But to your point, I’m not interested in changing registrars or registering domains at a higher cost, however, that’s not the target market for a service like this IMHO. I would gladly pay $50 insurance because hiring an attorney could cost upwards of $3,000.00 to file and defend a challenge.

  16. Kate says:

    François,

    The problem is that Dona is not a fully fledged registrar, it’s a reseller scheme running on top of Enom. I personally don’t trust them. I prefer not to deal with resellers either, regardless of how reputable. I prefer to deal with a registrar direct, that is bound by icann rules etc.

    You said: “Nobody like to change of registrar.”
    We have been dealing with known registrars for years, don’t expect that people will switch en masse to another outfit that just opened.

    You said it yourself: some domains are not worth defending. The majority of UDRPs are well-founded.
    So I don’t think UDRP insurance was a good idea to begin with. You obviously want to make money, you don’t want to pay for liabilities. Anyway, it’s the best domains that deserve extra protection, not all of them.

    Also you are targeting a small market: domainers. You are not going to run a successful registrar business just by catering to the specific needs of domainers.

    If you were setting up a real registrar, people would look at it differently.

  17. Matt says:

    @Francois yes I would, it’s more then worth it considering the massive value of a LL.com or LLL.com.


You are more than welcome to comment this post:





 



 



 



 

 
 
Domaining.com  |  Valuate.com  |  CAX.com  |  ECOP.com  |  DOFO.com  |  DONA.com