In today’s instant feedback, always-on information age, online companies can pay dearly when examples of bad faith become public.

As a reseller, you encounter a variety of challenges to the health of your business every day. Spam, stretched resources, razor-thin profit margins, hackers, phishers, and, of course, competitors all pose challenges to your business. In some ways, your own parent registrar also competes with you, although not purposefully so. This quiet competition is frequently a function of the structure of the registrar’s relationship. In fact, the very design of the reseller-registrar relationship leads your registrar to communicate with your end-users. There are steps you can take, though, to tend to your customer base.

First of all, there’s no need for paranoia among resellers that their registrars are trying to steal from them. In fact, no data exists to suggest that registrars taking business from their resellers is a big problem. In fact, ICANN says it has not received any complaints from resellers alleging that their registrar is trying to lure away their customers. Nonetheless, it’s worthwhile to illustrate how competition naturally occurs; how resellers can protect themselves from surreptitious or “structural” competition from their own registrars; and what you can do to care for your business.

Registrars who sell domains wholesale and retail are inherently in competition with their resellers. You’re both in the business of selling and managing domains. In addition, most of the retail registrars are no longer simple domain companies. Domains have become the hook for selling hosting, email and other more lucrative services. These service offerings used to be more the province of resellers. But now registrars offer most of the same services as their resellers.

Of course, in competing with one another, your registrar likely enjoys several major advantages over you. In general, it has a larger marketing budget, stronger brand awareness, more overall resources, and can offer domains more cheaply than you. Your registrar also has two other huge advantages: your customers often turn to them directly for support, and your registrar routinely contacts your end-users to send domain renewal notices and other legitimate information. This often prompts the end-user to contact the registrar for one reason or another.

The Norm
Despite the skewed competitive field, most registrars aren’t bent on alienating their resellers. Nor do they fiendishly plot to steal customers from their resellers. Since they profit from the sales generated by their resellers, they’re not keen on upsetting you and potentially tarnishing their reputation in the industry. A handful of resellers have reported their customers receiving direct solicitations via email from their registrar, but this isn’t the norm. On the other hand, registrars can take business from you in numerous ways. All registrars have your clients’ contact information because it is a standard part of the WHOIS process. And, most registrars use WHOIS information in their own marketing databases. They simply don’t do a good job of comparing and vetting the names of your clients from their own marketing lists.

Registrars communicate with your end-users in other ways as well. As required by ICANN, registrars must send your customers emails about domain renewal deadlines and updating WHOIS records. This direct contact with your end-users, as well as the public information identifying the registrar in WHOIS profiles, lets your customers know that their actual registrar is not you. If such an email spurs your customer to call the registrar about the renewal or for other information, it gives the registrar an opportunity to upsell them. It also prompts the end-user to wonder who the registrar is, why they bought from a reseller, and if they might get a better deal by going directly to the registrar.