5 fresh top level domain pricing models
How ought to registries price their fresh domain registrations?
We’ve seen many fresh top level domains (and some commercialized country code domains) hit the market over the past decade. They’ve taken various pricing strategies — from sell-if-for-a-low-price-to-boost-registrations to .com equivalent pricing to premium pricing. We’ve even seen variable annual pricing on premium domains.
How ought to you price your typical domain registration fee? Here are a number of ideas along with the upside and downside of each*.
Free
“Free” domains can fall in to multiple categories, and there’s a big difference between them.
On the one hand is the idea behind .free, where you can get a limited number of .free domains. This, to me, is a bad model. Without appropriate safeguards, your TLD will be like a free web host. It will be abused, landing you on security firm sh*tlists. And maybe even Google’s bad boy list. Listen to Matt Cutts. You will also have a decent revenue hurdle since you owe ICANN fees on each domain registration. Parking expired domains and upselling may not be enough.
The other type of free is offering free domains to clients, distributors, association members, etc. For example, eBay might offer myuserid.ebay to clients for their stores. (As an aside, eBay doesn’t need a fresh TLD to do this. It’s cheaper to do it as a subdomain or directory of eBay.com.)
I could even see something like .bank being free to members of a sizable banking organization.
This model could spur widespread use but still retain the quality of your overall namespace.
Cheap
The next pricing option is one positioned to be a cheaper alternative to .com. VeriSign keeps raising the price on .com, and we’re starting to see registrars push annual registration fees to $12 or more. If your domain is priced at $5 a year retail, would someone register that as opposed to .com? I suppose it depends on the client. More likely is the .com is taken and someone considers an alternative. If you’re priced cheaper than .com, .web, and .somethingelse, you might win the client.
If a registrar charges $5 retail, you’re probably charging $1-$3 wholesale.
You might also consider pricing your registrations higher but then doing specials with domain registrars. This will make it easier to raise prices later, as you can just stop the “sale” prices.
Still, I have reservations on cheap pricing. .Info got a bad rep for its first year specials. They retained a lot of registrants and it worked out for them, but a lot of spammy sites were set up on .info.
.Com pricing
I’d consider .com equivalent pricing to be regarding $10-$15 to the end user. This probably means you’re charging a wholesale price of $5-$9. Clients are used to paying this amount. Pretty straightforward.
Premium
Premium would be something like .co (wholesale price $20) or .xxx (wholesale price $60).
There’s a good business model behind this, if you can draw attention to your TLD. I know it’s simple math, but if you’re .co and you hit the 1 million domain milestone you’re looking at $20M in annual registration revenue. If you charge just $7 it’s just $7 million.
This type of pricing ought to work for TLDs that have a since of community. I can also see it working for some city names, such as .nyc. A fresh york pizzeria may be willing to pay $50 for a .nyc name instead of .biz. (But would they opt for .food instead?)
Uber Premium
This would be for exclusive domains. These domains likely have additional services such as authentication and may require group membership. If .bank isn’t given away for free, it would probably fall into this category. You could be looking at prices of hundreds or thousands of dollars, depending on the services offered along with the domain.
*I’d love to see some analysis on the elasticity of demand for retail domains registrations.
