Some domain registrars are currently offering new .com domain registrations at prices below the wholesale cost. This practice raises the question of why registrars would sell domains for less than the wholesale price. The wholesale price for a new .com domain registration stands at $10.26, yet some registrars are charging as low as $5.00, $5.75, or $6.99.

There are two main reasons behind this pricing strategy. Firstly, many registrars use below-wholesale pricing as a marketing tool to attract new customers. By offering domains at a discount or even below cost, registrars aim to build a customer base that may engage in future full-priced registrations or purchase other profitable services like hosting. Additionally, some registrars leverage these low-priced domain registrations as a means of advertising until the customer activates the domain.

Moreover, registries like Verisign, the operator of .com domains, run rebate programs for registrars. These programs provide rebates to registrars based on meeting specific growth targets. Often structured on a quarterly basis, these rebate programs prompt registrars to offer short-term discounts, especially towards the end of a quarter, to achieve the required growth rates.

As of late March, which marks the end of the first quarter, several registrars have rolled out promotions to meet their quarterly targets and qualify for rebates. For instance, Unstoppable Domains runs a $5 Fridays promotion allowing customers to register .com domains for $5 each every Friday. Similarly, InterNetX AutoDNS and Dynadot offer domain registrations at discounted rates of $5.75 and $6.99, respectively.

This trend of registrars selling .com domains below wholesale cost not only benefits customers looking for affordable domain registration but also serves as a strategic move for registrars to expand their customer base and potentially earn rebates from registries. By understanding the dynamics of pricing strategies in the domain industry, customers can take advantage of these promotional offers, especially towards the end of quarters when discounts are more prevalent.

In conclusion, the practice of selling domains below wholesale cost by some registrars is driven by a combination of customer acquisition tactics, marketing strategies, and rebate programs offered by registries. This pricing phenomenon highlights the competitive landscape of the domain registration industry and underscores the importance of timing for customers seeking the best deals on domain registrations.