There are several reasons why some registrars may be able to offer lower prices for domain registrations. Some ccTLDs and new gTLDs can be quite expensive because the registries can set their own pricing. So we understand that your budget can be a concern.
Loss leader pricing
When domain prices are set very low, especially significantly lower than many other registrars, that’s typically what’s known as a “loss leader”. The price the customer pays to register the domain is often less than the price the registrar pays the registry for it. They aren’t making money on that registration.
This is a sales tactic to encourage registration of lots of domains of that type. However, the registration price is very rarely the permanent price for the domain. It’s also sometimes because some registrars make their money selling a WHOIS privacy service or other value-adds. (Our WHOIS privacy service is free.)
For more information on upselling and our thoughts about it, have a look at this article: No Upselling Tactics To Be Found Here.
We recommend checking before registering a domain what the annual renewal price will be. It is typically much higher than the registration price. Registrars are well within their rights to change the price this way.
Volume pricing
Another reason is volume. There are a few very large registrars that can negotiate volume discounts with registries because they manage millions of domains. This generates big profits for registries. So the big registrars can negotiate lower base pricing.
Some of the big registrars also have special marketing agreements with the new domain registries. That means they get cash back from the source registry for promoting a specific domain type.
In these cases, the pricing may remain fairly low, but you’re also getting the experience of doing business with big companies, which can sometimes be a bit bureaucratic or impersonal… and put their focus more on sales and marketing than helping customers.
Other sources of revenue (like customers…)
There is also the common adage that if you’re not paying for something, then you are the product. Companies need to make money to survive. If they’re not making much money selling domains (or are even losing money doing that), they need to make up profits elsewhere.
Some do that by using your data or selling your customer information. They get paid by their partners for this vetted information, and it’s basically a condition of your customer agreement with them.
Building a sustainable business
We started iwantmyname with really clear and strong ideas of what kind of company we wanted to build. And a lot of that had to do with ways we didn’t want to run our businesses. (Even if the practices were common in the industry.)
We list our beliefs and policy information on our About page, and we stand by it. We believe it’s the best way to build a sustainable company that customers like to do business with.
We don’t believe you can measure yourself or company successful if it results in “human roadkill” on that road to success. You’re in business because your customers are willing to do business with you.
Similarily, your business’ existence and growth relies on your team. We’ve grown slowly and carefully, and have a lot of experience and deep knowledge of our industry. We believe that’s the best way to serve our customers. We haven’t outsourced support to places where we can amass lots of cheap–but low-skilled–labour.
Be informed
We always recommend doing your research. If domains seem “too good to be true” cheap, they very well might be. And if domains are a bit more expensive sometimes, see what that means in terms of the renewal pricing, the company you’re doing business with, their policies, and other things that may be important to you.
We can’t and don’t do price matching. We do show current discounts on our domains pricing page, our transfers page, and on our monthly discounts page. And we do our best to pass discounts and price reductions along to you whenever we can.
If you have any questions about pricing or related issues, just let us know.