This is the process by which domains names are registered, expire and are then backordered.
The Process
1. A domain name is AVAILABLE for anyone to register.
2. A person registers a domain name for a period of time, typically between 1-10 years. Once registered, the domain name becomes ACTIVE. During the first 5 days of registration, the domain can be deleted by the registrar and the money refunded to the individual who purchased the domain name. This is called [Domain Tasting]. However, its important to note, that not all registrars allow you to do this. Some charge a small fee for the privilege.
3. After the registration period expires, the domain changes status to Redemption Grace Period. This is where the domain names website and email are no longer functional. If the domain name is registered with a particular registrar (who has an agreement with a backordering company), then the backordering company is typically alerted to this fact. They subsequently promote the name as being available "soon" to backorder. However, a user may decide to renew their domain name at this point and pay an excess fee to do so.
4. If the domain name is not renewed, then it changes state into "Pending Delete". This 5 day period is closely monitored by domainers to backorder the name at their favorite backordering company.
5. After the Pending Delete period, the name then goes into "The Drop". This means that the domain name is released by its registrar and becomes available to anyone to register. However, some backordering companies have agreements with specific registrars to "hand over" their expired domain names. The backordering companies then put them up for auction.
6. If a domain name is secured by a backordering company, and that backordering company has a number of bidders for that specific domain name, then it goes to auction. The auction typically lasts a few days and the highest bidder will receive the domain name.
7. The domain name is then registered to the highest bidder. Some backordering companies have agreements with registrars to register the name (after the auction) with them. As such, the auction winner typically receives an email informing them of who their new registrar is.
8. Typically, professional domaining companies will backorder every domain name that expires. They do this to test how much traffic the domain name receives. Those that they can't monetize (don't receive a certain amount of traffic) are then left to expire. It's at this stage that the domain name becomes AVAILABLE to register again.
The cycle continues....