If you plan to create a website, you will go to someone like Godaddy or HostGator to buy a domain name (e.g. www.2dpoint.net).
GoDaddy/HostGator are Domain Name Registrars (aka Registrars), who are like car showrooms.
Just as car showrooms don’t make cars but source them from manufacturers, Registrars don’t manage or maintain domain names but source them from Domain Registry Operators (DROs).
DROs are different organisations such as Verisign (manages .com & .net), PIR (manages .org) and Educause (manages .edu), and only after DROs officially allow the Registrars to assign domain names can Registrars do so.
A Registrar is free to sell the domain names at any price it wants, but each time it sells a domain name, it pays a small fee to the DRO.
To become a Registrar, one must register with ICANN (Internet Corporation for Assigned Names & Numbers).
The fee for an ICANN application is about $3,500 (as of 2020), plus the Registrar is also required to pay $4,000 annually.
So, to sell .com, .net, .org & .edu, GoDaddy would have registered with ICANN (for the fee mentioned above) and then registered itself with Verisign, PIR and Educause separately.
In addition to Registrars, there are resellers in the market, who sell domain names on behalf of Registrars and charge a small commission to them.
To be a reseller is cheaper as there are no expenses for registering with ICANN.
And since resellers don’t provide any customer support (that Registrars provide), buying from resellers works out cheaper (but could be risky if the reseller is a scammer) for consumers.
Registrars use resellers because it works out cheaper for them as well – they don’t have to allocate resources for providing customer support.
Today, buying/selling domain names has become a huge business, where people research and buy ‘high-potential’ domains at low prices, wait and then sell them at auctions or forums (GoDaddy Auctions or afternic.com are famous websites for this).
Mike O’Connor, who sold corp.com to Microsoft (supposedly for over $1.7 million) in April 2020, had bought this domain name 26 years ago.
