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How do the domains renewals below cost price work?
Cloudflare registrar claims to sell Domains at cost without markup. If that is true, how are some registrars offering offering renewals at lower prices? What is their business model? Why would anyone sell below cost year on year?
I am not looking at the first year registration cost, because its has become common in the registrar industry to sell below cost in the first year and recover using high markups the second year onwards.
Comments
Can you share some photos related to this, It's my first time hearing so 😅
Having a better deal with the registrar for having more domains or just better at negotiations.
Can't speak for all registrars but the current lowest cost registrar, Spaceship, is able to offer lowest cost domains as it's a venture of NameCheap. I remember reading on some forum (maybe domaindiscussion?) that Spaceship are able to offset the losses through NameCheap which sells at higher prices. Remains to be seen how long they will keep selling at low cost because I'm sure once they have a larger chunk of the market they can raise prices.
As for other registrars I'd say it's also a case of marketing i.e. reel in customer through some low cost TLDs while keeping the prices of other TLDs marginally higher. If done correctly, I suppose a registrar could offset their losses.
Ohh, I never thought it this way🤔
You can take a loss if you intend to make a profit in the future
Either by raisting prices
Or by offering add-on services. Like hosting
Exactly. No bussiness is going to operate at a loss forever. Spaceship offset their cost via namecheap and expecting current users won't move away when they finally charges more in the future where they have enough userbase. Basically a bait and switch.
I don't think registry's discount prices to registrar's based on volumes like that. At least the big ones like Verisign and PIR don't.
Its right on their website. https://www.cloudflare.com/en-gb/products/registrar/
Interesting. I wonder how long can the profits of Namecheap subsidize the losses on Spaceship.
Well I was talking about other sites selling less than Cloudflare (P.S. I do know that they sell the cheapest without any markup). And by reading the above response by xmok, I got my answer 😁