On Sat, May 15, 2004 at 03:02:56PM +1000, Sean Finn wrote:
> Magic,
> 
> Please dont treat this reply as personal, im just attacking the topic, not
> you.
> (I needed to qualify that since 80%+ of posts on this list are targeted at
> individuals / groups rather than issues).
> 
> 
> The answer has to lie with Economies of Scale..

No, it doesn't.

Economies of Scale generally only kick in where physical goods are involved. 
To produce 1 widget costs $1; to produce 100 costs $50. Thus by producing
more (100) I can sell each individual item for less ($0.50).

In the case of Domain Names - which aren't 'sold', merely licensed - the
marginal cost of providing service for an extra client is nil. It costs
X amount to setup and run a company to service Y clients. It still costs X 
to service Y+1 clients.

> you can get a TLD domain for what, 5, 6 bucks?
> 

yes - that is _retail_ too.

[snip]
> 
> Au Domains wholesale for around that mark, just as TLD's can wholesale
> around the 5-6 buck mark.


So, fundamentally, why is it that .au domains are so expensive? I mean
AusRegistry applies a 260% average mark-up before on-selling them. I'm
not sure what other kinds of businesses you've been involved with but
most people are lucky to get away with 30%.

In competitive environments generally 15-20% is common. Anyway back to
the question I posed earlier (why is .au so expensive). I believe this
is the result of auDA believing that domain names are price inelastic
(i.e. they are necessary for every Australian entity, so they'll pay
whatever price).

However a lot of organisations are realising just how expensive .au is
and are making use of other gTLDs (e.g. cityrail.info,
sydneyhomeshow.com, etc.) instead. With those kinds of URLs getting
widespread coverage and being heavily promoted I believe you'll find
fewer and fewer people who need to be told '.com but not au'.

Anyway, I'm down to three domains stuck in .au and since I've got them
for another 2 years, I'll be able to transition them away fairly slowly.
However if I was involved with the .au domain industry I'd seriously be
asking why auDA/AusRegistry/whoever are trading short-term profit for
long-term viability.

Anand

-- 
 `` All actions take place in time by the interweaving of the 
 forces of Nature; but the man lost in selfish delusion thinks 
 that he himself is the actor.'' 
        Lord Krishna to Arjuna in _The Bhagavad Gita_