Where should you purchase a domain name from is purely your own decision. Although the differences in domain name management facilities are few across different providers, the pricing varies drastically. There are various factors (besides competition) which contribute to this disparity in pricing. Knowledge of these factors is important in influencing your decision in how to and from where to buy domain names. Savings can range from a few dollars to even $50 per domain name. This article explains why domain names are available at such a cheap price and why sometimes it maybe an illusion to fool the customer.

Addon Services

Many Domain Name providers offer the cheapest pricing because they provide only the basic rudimentary domain registration services. They do not provide any extra services and only allow minimalist domain management options. Domain Name Servers (DNS), Email Forwarding, Domain Forwarding, Free Landing Page, WHOIS Privacy and some other services are facilities which are charged extra. If your domain name provider is giving you these services for free along with cheap domain pricing, it is definitely worth it. But to maintain a slim margin and to undercut the competition, most domain registrars charge a hefty additional fee to provide these addons.

First Year Pricing

Most domain name providers offer a very cheap price for domain name registrations to lure new customers to their service. However, many providers mislead people into buying from them by displaying an extremely low price for registration. They do not mention what the price for renewals will be. Renewals are offered at the normal price which most providers offer, which will obviously be much higher than the price of the first year registration. Most customers do not read the fine print at the time of registration and follow the price carrot into the providers net. This is often a reason why customers are delighted at the time of registering the new domain but are frustrated the next year when realization dawns upon them. A transparent host will clearly indicate that the domain pricing will increase from the next year onwards, as the offer or pricing is only applicable on fresh registrations.

Reseller Discounts

Some websites offer cut-throat pricing for Domain Registrations, Renewals and even Transfers. This is possibly due to the fact that they themselves receive a heavy re-seller discount from domain registrars and are able to pass on the discount to their customers. Registrars do not usually sell domains to the end user in a big way. Their retail pricing is very high and discouraging for retail clients. The easiest way for them to get customers is to shift the burden of customer acquisition on the resellers. The incentive given to resellers is proportionate to the yearly commitments of the resellers. Hence if you try and compare a reseller’s price with the price of the same registrar, it will be like comparing apples and oranges i.e. they are uncomparable.

Bundled Pricing

Many hosting companies offer heavy discounts on domain name pricing if you bundle a domain name with their hosting packages. If you cease to keep their other products or services, your domain which is bundled with it will be renewed at their regular or standard pricing. The cost of the standard or regular pricing maybe much higher than the discounted pricing, but it is natural that the service providers who offer such discounts will obviously offer an incentive to promote their products or services. If you really need the bundled product, then it would be a good idea to take the package, but some clients often buy the bundle just because of the price illusion that they are getting the domain name free. This is not the case, especially due to the fact that the cost of the domain name has also been factored into the price of the bundle. Similarly it will offer a good perspective on how much the principal product should really cost.