Why do registrars sell .com domains for less than the wholesale price?

Registrars sell below the wholesale cost to win customers and to get registry rebates.

$5.00. $5.75. $6.99.

These are prices some domain registrars are currently charging for new .com domain registrations. The wholesale price for new registrations is $10.26, so why do some domain registrars sell domains below cost?

You might see .com domain registrations for less than $10.26 for two reasons.

Loss-leaders

Many domain registrars charge at or below wholesale pricing because they view pricing as a way to gain new customers.

Those new customers might buy or renew full-priced .com registrations in the future, or they might register other domains that make a profit for the registrar.

Registrars can also generate revenue from ancillary services, such as hosting, and some make money by turning each registered domain into a billboard until the customer activates the domain.

Some registrars limit the number of registrations available at discounted prices, but others offer unlimited registrations.

Rebates

.Com registry Verisign runs rebate marketing programs for registrars. These typically give registrars a rebate if they hit a specific growth rate.

Many of these programs run on a quarterly basis, which is why you tend to see short-term discounts toward the end of the quarter.

It’s currently late March, the end of Q1, and domain registrars are popping up with these promotions as they aim to hit the targets that will generate these rebates.

If you maintain a list of .com domains you wish to hand register, it might be worth holding onto the list until the end of the quarter to wait for discounted prices.