Prices are expected to continue rising slowly due to increasing internet usage and the rising number of businesses propelling demand.
Los Angeles, CA (PRWEB) March 05, 2014
Internet domain names have a buyer power score of 3.8 out of 5.0. Registering a domain name is virtually risk-free from an economic standpoint; there is a high level of competition among a large number of suppliers. Additionally, regulation put in place by the Internet Corporation for Assigned Names and Numbers protects buyers from the risk of suppliers going out of business. “The market has now fully recovered from a recessionary slowdown,” says IBISWorld procurement analyst Pierre Dessertenne. “Domain name registrations are taking place faster than in previous years and prices are increasing slowly over time.”
A rise in domain registrations by consumers and businesses has been driving prices up in the past three years. In addition, extra features are being bundled with domain registration, resulting in higher prices. Despite recent price growth, however, the abundance of discounts and promotional offers has partially mitigated price increases. “Declining prices for IT equipment also diminish input cost growth for suppliers, which helps to further limit large domain name price increases,” says Dessertenne. Buyers can therefore expect to pay low and constant prices for the registration of internet domain names.
Over the next three years, the number of domain name registrations will continue to increase, and prices are expected to continue slowly rising as a result. The lack of effective substitutes for domain names will also continue to limit buyer power. Additionally, domain name registrars do not offer room for negotiations, as prices are fixed with predetermined discounts and promotions. Although prices vary widely, discounts, promotions and package deals make the total cost similar across many registrars.
However, very low switching costs will help maintain the competition among domain name providers, benefiting buyer power. Registrars will continue to differentiate themselves by improving the quality of their services through security enhancements, bundled features and strong customer support, giving buyers many choices in finding the supplier that best fits their needs. Major suppliers in this market include Sedo Holdings AG, Melbourne IT, Tucows and Web.com Group Inc.
For more information, visit IBISWorld’s Internet Domain Names procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of internet domain names. Internet domain name registrars assign a unique domain name of their customers’ choosing, so long as it is not already registered. The Internet Corporation for Assigned Names and Numbers (ICANN) accredits registrars to assign generic and country-code top-level domain names. This report focuses mainly on initial domain name registration, although the domain aftermarket is overviewed.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.