Why Do Domain Prices Vary So Much?

This page may contain affiliate links from which I may make a commission at no cost to you. See How SideGains Makes Money for more information.

Domain Prices

You have an idea for your business or blog and are super excited to start this new chapter in your life. You haven’t yet looked at domain prices though.

Do you have a name for your idea yet?

Perhaps you’ve already decided upon a name for your new venture and are wondering whether you can buy it as a domain name?

Or maybe you have a domain name you know is available and have looked at different companies to buy it?

We’ve spoken in more detail about checking your domain name idea and how to purchase it here: How to Register a Domain.

But for the purposes of the discussion now, let’s assume you have a domain name idea. Let’s also assume you have already checked it is available and now want to buy it through a domain registrar.

If you’ve researched companies to register your domain and also checked to see how much it will cost, you may have noticed that domain prices vary a lot.

I’ll demonstrate.

Testing Domain Prices Across Registrars

I’ve checked an available domain with several registration services to see how much the price varies.

For my test, I’ve used the first 10 results found in a number of searches for “register a domain” type queries. My aim is to reflect the registrars that anyone might come across.

For the test I have chosen to acquire the domain for a 1 year period: that domain is domainpricetest.com.

To be clear, these are the prices quoted for just purchasing the domain alone. They do not include adding services such as WHOIS protection.

And here are my results:

  1. Namecheap: $8.88/yr
  2. Godaddy: $11.99/yr
  3. Network Solutions: $2.95/yr (special offer)
  4. Google Domains: $12.00/yr
  5. Bluehost: $11.99/yr
  6. Hostgator: $12.95/yr
  7. Domain.com: $9.99/yr
  8. Shopify: $14.00/yr
  9. Hover: $12.99
  10. Name.com: $8.99/yr
  11. 1&1 IONOS: $1.00/yr (special offer)

So just looking at these 10 services the prices vary between $1.00 to $12.99 for a 1 year purchase.

You will see beside a few of the prices I’ve found that some of the registrars are promoting a special  offer.

So Why do the Example Prices for this Domain Vary So Much?

Domain Price Variance

Network Solutions and 1&1 IONOS prices (at $2.95/yr and $1.00/yr respectively) are both special offers.

After the first year the price the domain renewal price on Network Solutions increases to $37.99/yr. For 1&1 IONOS it increases to $15.00/yr.

These is a classic loss leader technique where the initial price is very low. In this technique the upfront loss to win new business is sacrificed for gains later through price increases.

This may seem a shabby thing to do. However, many people who take on a domain will not renew it after the initial period of ownership ends. In this case the registrar makes a loss on that customer.

There may be a whole bunch of services and support offered by the two loss leader examples I’ve shown above. As a result I won’t comment on the value you’d get from either if you renewed your domain name with them after your initial 1-year period ends.

My point here is that they are both using a legitimate marketing technique to win new business. And that’s one of the reasons why in this test there is so much price variance.

In fairness, almost all domain registrars increase prices to retain a domain when the initial period has passed. But some may charge a lot more than others! 

Other Reasons Why Domain Prices Can Vary

So we’ve established that initial loss leader techniques can result in some registrars selling domains at a discounted rate. There are of course other reasons for price variance.

Volume of Registrar Business

Some of the larger registrars are able to negotiate discounts with certain registries simply because of their size.

Let’s say I’m a domain registrar managing 30 million domains. My business will be important to registries that make domains available, since I’m a higher value customer. 

This gives me bargaining power to negotiate volume discounts on domains from a registry.

I can pass these discounts on to you to make the price of a given domain more competitive and therefore more appealing.

Since I am such an important domain registrar, I also have special agreements with new domain registries. This is especially true for specific domain types they need to allocate. This leads to me being able to offer huge discounts for promoting a specific type of domain extension (such as. “.newdomain”, “.anothernewdomain”, “.exampledomain”, etc.).

Your Personal Data

There is a common theory about domain price that goes something like this. If it seems like you are getting something for nothing… you probably aren’t!

It is rumoured that some registrars sell news of your recent domain purchase along with your contact details to partner companies. These partners will then contact you with offers of hosting, web design or any other service that might be of interest to the owner of a new domain.

Now I don’t believe that most larger companies do this but there may be some smaller registrars that do. For these ones you would likely have to agree to this in their terms and conditions as a part of the checkout process. If you didn’t agree you’d have to forfeit the purchase through them.

This practise is not to be confused with opting out of the WHOIS registry when you purchase your domain. In this instance your contact details are accessible to anyone.

WHOIS Scraping

Some companies use the WHOIS database to look for recent domain registrations as they could be potential leads for the services they offer. This is completely legal, even if it is bothersome to receive calls and emails from people promoting their business.

Since registering SideGains.com and making my personal details available, I have received upwards of 30 phone calls and countless emails. So I can personally vouch that this happens!

Now, if unlike me you don’t want your details made available when you register your domain, you should make sure that you:

  • Check the terms and conditions of the registrar you are thinking of using to buy a domain to ensure you do not agree to them sharing your details.
  • Opt to keep your personal details concealed from the WHOIS registry during the checkout process. This will possibly be free as an introductory offer for the first year. However it may incur a charge when you renew your domain.

Other Factors that Influence Domain Price

Domain Extension

It’s worth bearing in mind that some domain extensions often cost you more to register than others.

This is because some extensions (like “.com”) are generally seen as more prestigious. As a rule they are the most recognized and most respected ones. For example, people tend to assume automatically that a site will be a “.com”.

Sites like Moz.com recommend purchasing “.com” domains if possible:

In order to maximize the direct traffic to a domain, bias towards purchasing the .com TLD.

Moz.com

*TLD stands for Top Level Domain i.e. sidegains.com

There may also be an SEO benefit to purchasing a “.com” name. Historically, cheaper domain extensions, such as “.info” were used large-scale by black-hat marketeers and spam sites. 

Domains with a “.info” extension could be purchased at a very low cost. This made the making the bulk creation of spam sites a cheaper and therefore more profitable option.

Premium Domains

Have you heard of people getting rich selling domains? 

CarInsurance.com sold in 2010 for the eye-watering sum of $49.7 million! This could be considered a premium domain!

Some early takers of “.com” names have made a fortune trading in domains that have certain characteristics.

In general, the characteristics of such domain names are:

  • They are short – short names are easier to remember and appeal to a wider number of people.
  • They are brand-able – they sound unusual or are catchy and can communicate a brand idea.
  • They contain popular keywords – certain domain names include words considered top-tier search terms such as loans, cars or credit.

Premium domains can cost you $1,000s and so for most of us they will be out of reach.

Service Quality

Some domain registrars offer a more extensive service and higher-level support than others. As with most things in life, this can be reflected in the price.

Length of Purchase

Although we talk of buying a domain name, the reality is we only ever really rent it for a given period. The truth is you can’t buy a domain and own it forever.

In my example above looking at the domainpricetest.com name, I only looked at purchasing it for 1 year.

You can choose to buy a domain for a much longer period up to 10 years.

The price of buying a domain for 10 years will increase the purchase price at the point you buy it. However it may be cheaper over the long term than renewing the domain in one year lots for 10 years.

The Domain Registrars I Use

The domain registration services I tend to use for “.com” domains are Namecheap, GoDaddy and Network Solutions.

I also use Reg-123 for purchasing domains that end in .co.uk.

Summary: Things to Keep in Mind when Buying a Domain

Look closely at the terms and conditions of the domain registrar before you buy.

Check to see that your data is not being sold to another company.

Check what the annual renewal price will be as you won’t want a nasty surprise when the time comes.

Decide if you want to hide your personal details using some type of WHOIS protection. However, be sure to check the price at the time of purchase. It may be free initially but find out what it will be if you renew it.

That’s it for now. Thanks for reading!

Paul

Why Do Domain Prices Vary So Much?

Please share your own experiences in the comments section below or feel free to ask me a question.

<— Share this on image Pinterest.

Be the first to comment on "Why Do Domain Prices Vary So Much?"

Leave a comment

Your email address will not be published.


*