How much does a domain name cost? Tips for planning your budget

Businesses and self-employed individuals can’t really get away with not having a website. If you want to increase revenue, gain new customers, or present products in a good light, a website is an important part of your business. Increasing numbers of private individuals are creating their own websites too, for example, to share a hobby with others.

Private individuals usually have a smaller budget to set up a website than businesses do. There are also significant differences between freelancers, start-ups, and corporations. But there’s one thing that all have in common: They all need a domain to support their web presence so that users can access the website. The Internet address comes with different price categories. Why is that?

While the Domain Name System (DNS) – like the Internet’s phonebook – is endlessly big, no one wants to have a cryptic sequence of numbers and letters as their web address. In additional, many top-level domains (TLDs) or domain extensions have different levels of prestige. This, in turn, is mirrored in the price. While traditional endings like .com or .org are among the most popular domain endings, new TLDs are only slowly gaining in popularity.

There are also many different domain providers. Their price differences are usually not obvious, but some providers have special offers every now and then. While price should not be the only factor in choosing a domain provider, it is definitely worth comparing several providers.

To help you understand what you’re actually paying for, we’ll briefly explain the structure of a domain. Every domain is made up of various building blocks, that together – technically speaking – make up the fully qualified domain name (FQDN). If you take a look at your browser’s address bar, the domain (read from left to right) starts after the protocol specification (usually https://). This is followed by:

• Third-level domain: Sub-domain; for websites this is usually www
• Second-level domain: Domain name; freely selectable; often contains the brand name or the name of the web project
• Top-level domain: Domain ending; TLDs are limited; differentiated between two types:
  • country code top-level domains (ccTLDs): country-specific or region-specific; e.g. .uk or .eu
  • Generic top-level domains (gTLDs): generic; refer to subject areas; e.g. .com, .org or .edu

If you buy a domain, you select a top-level or second-level domain. Sub-domains can usually be selected more liberally.

When it comes to domain prices, a distinction must be made between addresses that are still free and domains that have already been assigned. Depending on the demand, the prices of the latter can be very steep. Provided that an assigned domain is for sale at all. What’s more interesting for many users is the cost of available domains. These depend exclusively on the desired top-level domain.

Older top-level domains are comparably cheap and therefore also the first choice for many. But you do have to consider that many combinations are already reserved. New TLDs offer a much bigger selection. The .io domain is, for example, well suited for IT start ups.

Below you’ll find pricing for various top-level domains. Since there are small price differences from registrar to registrar, we have used price ranges, which refer to the annual costs, or directly have a look at the domain prices of IONOS.

Only regular prices are listed in the table. But domain providers often offer additional entry-level discounts: You pay significantly less in the first year and only have to factor in the full rate in the following year.

How do you buy a domain? First, select the provider from which you want to buy your domain. Here you have the choice between different domain types. The domain providers (registrars) then contact the TLD holders (registries) ICANN, DENIC and others, to register the domain in your name. Here is a small selection of providers:

• InterNetX
• IONOS
• GoDaddy
• Sedo

No matter which provider you choose to go with, it’s best to find out what exactly you’re paying for. Costs and services are not always clearly displayed.

• Costs in the following year: As a rule, you decide on a domain for the long term. Providers often offer discounts in the first year, which then no longer apply in the second year. Keep this in mind when planning your budget.
• Set up fees: Some providers charge a one-time fee for the registration of a domain. This is usually small but should not be forgotten.
• Auto-renewals: Typically, domains are only registered for a year. Some providers will automatically renew your contract before the year ends if you don’t cancel earlier. This can catch people off guard, but also means your website won’t suddenly be taken offline.
• Multi-domain offers: It may make sense for you to purchase several domains at the same time. Registrars often offer special deals for this.
• All-inclusive packages: Many domain providers are also hosting providers. If you know you’ll also need web space, an email address, and SSL certificates, then you might want to consider a package deal.

While planning your budget, don’t forget that beyond domain fees, setting up a website will also cost you a little!

What do you do, if the domain you’re after is already taken? Of course, you can search for another combination, adapt the desired name, or switch to an alternative TLD – but isn’t always necessary. Sometimes you’ll find that the website isn’t even active anymore on the assigned domains and the owners of the domain are more than happy to sell the Internet address for a profit. To do this, you must first locate and then contact the owner. If the domain owner does not already have a price in mind, make an offer yourself.

The value of a domain is generally based on its popularity. As such, some very popular domains have even sold for several million dollars in the past:

• business.com (2007): $345 million (£250 million)
• lasvegas.com (2005): $90 million (£65 million)
• carinsurance.com (2010): $49.7 million (£36 million)

Naturally, only very few domains are associated with these kinds of costs. But these top sellers do show what the value of an existing domain is measured by:

• On the one hand, memorability is an important factor. Business.com is probably the most obvious domain when it comes to the business world.
• Another reason is that you want to include important keywords in the Internet address. If you search for car insurance, you will most likely find carinsurance.com.
• And finally, it is also about protecting domains from the competition. The domain lasvegas.com, for example, was bought by the owners of vegas.com to avoid confusion among users.

Depending on your goals and budget, you should budget different amounts of money for your domain purchase. The following examples are all from different professions. For hobby projects that do not rely on traffic and a good Google ranking, on the other hand, you should simply look for the cheapest offer.

Let’s say you work as a freelance actress and voice-over artist. Your marketing budget is most likely low and you want to use your website primarily as an online business card where future clients can find out a little about you. So that you don’t strain your finances too much, a .com domain will suffice for the time being. Since your name is also your brand, you should definitely include it in the domain.

Cost for domain(s): approx. £1.00 per month

As a start-up, you have different expectations of your company’s presence on the web. You want to be represented as well as possible and make profitable use of SEO options. That’s why you should secure not just one, but several domains. In this way, you will be found by potential customers and give the competition less opportunity to hinder your marketing efforts. Let’s assume that the start-up is from the IT sector, then .io and .app, for example, are also suitable in addition to the classic addresses .com and .org.

Cost for domain(s): approx. £7.00 per month

Established companies and corporations usually already have at least one domain. But that is not enough. To protect your brand, you should buy as many domains as possible – and that can also mean buying domains that have already been assigned. Here, the prices can vary greatly, depending on how well known the domain already is and how high the demand is.

Cost for domain(s): approx. £73 per month + one-time fee of approx. £730