Domain Name Pricing Trends

As part of Domains, I am constantly surveying the domain name market. I have accounts at many registrars to understand what works and what doesn’t. Today, I received a communique from our good resellers, They are a wholesale registrar that caters to people and companies who want to sell domain names as a product. They offer white-label domain seller websites and hosting, etc. Their prices tend to be at the lower end of the market spectrum.

An Example:

There are good answers when someone complains, saying the prices for domains are too high (or asking why we charge more than .com, for example). This can go for many new gTLDs, by the way.

  1. The trend in domains is higher prices. I’ve observed this for a long time, and the example in the link is typical and indicative. There is no crazy math going on here, but it’s evident that domains are not all $10.00 per year anymore.
  2. Memorable domains are valuable and are the foundation of a business. New domain endings like allow clients to create truly memorable online personas. That is powerful and often misunderstood. But registries need to maintain balance.
  3. A suggested retail price between $25 and $50 offers value, and it keeps spammers away without tons of expensive technical wizardry.
  4. Retail domain name prices in that range are not too high or too low, and registries can always lower prices through promotions to compete. Pricing in that range is sensible and defensible.

Some Domain Registries are Finding Their Way

The domain name market is finding its way after years of experimentation. The value that good domains bring is worth way more than $10.00 per year. A niche valuation protocol is becoming de facto, where a registry knows they will never have 350M domains under management (like Verisign), so $10 per year is not a viable business model. They are going to the middle ground and charging between $25 and $50 per year.

Of course, there are a few registries who are simply saying, “Screw it, if someone wants our domains they have to pay our price to get them!” They’ll charge $1000 per year or something like that. They can get away with this. Nothing stops them, but it’s more damaging to the industry (and to these registries) than helpful. Regardless, this model can still work because the cost of running a registry can be minimized.

Finally, some registries like .bank charge more, but give or require more. .Bank is available only to banks. They require every registrant to use the latest security tools (SSL and DMARC, for example). These models at least have a reason to charge higher prices.

I hope that when the next round of new gTLDs occurs (just a few years), we’ll all have more experience and better pricing models.

About Joe Alagna

Joe Alagna is the Director of Sales for Domains LTD. He is also an independent insurance broker offering home and business insurance in southern California. He is an international expert in all aspects of the domain name business, including domain name investing, new gTLDs, registrars, and registries. Joe can be reached by phone at +1 (909) 606-9175 or via email using the contact form on this site.
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