Domain name warehousing

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Domain name warehousing is the common practice of registrars obtaining control of domain names with the intent to hold or “warehouse” names for their use and/or profit. Also see Domain Kiting, a related illicit business practice employed by registrars.

Typically this practice occurs after a domain name has expired and the previous owner (registrant) has not exercised his/her right to renew that name within the allotted time frame (approximately 45 days following expiration). Since registrars are privy to the exact expiration date and time to domains registered through their company, domain name warehousing constitutes a unfair advantage over the general public in obtaining expired domain names.

According to GNSO Council Deletes Task Force Report (2003), a council organized under the Internet Corporation For Assigned Names and Numbers (ICANN), three specific modes of warehousing were identified:

1. The registrant allows the domain name to lapse, but registrar fails to delete the domain name during the grace period, resulting in a paid renewal to the registry. The registrar subsequently assumes registration of the domain name.
2. The registrant purchases the domain name through fraud and the registrar assumes registration of the name to resell in order to minimize losses.
3. The registrar registers the domain in its own name outright.

As of this writing the governing body over domain name registration, ICANN, has yet to address the inequities of domain name warehousing. Typically this translates into inflated domain name prices for the most highly sought after web address names. Registrars are in a unique position to impact domain name pricing by introducing competitive bidding or auctions for expired domain names. In the absence of warehousing, the general public might be able to obtain expired domain names for no more than the price of re-registering them. Circumstances are further impacted when registrars opt not to market the domains in the near terms, thereby excluding the recycling of warehoused name indefinitely.