You get offers in the mail or see them on TV every day.
“Get 0% APR on a new Visa”
“Pay just 1.9% interest on a new MasterCard”
Then you read the fine print, and find out that the interest rate is an introductory rate, only to shoot up to 20% after 6 months.
Lately, I feel like the domain name industry is using the same tactics. It went mainstream with GoDaddy’s $3.99 domain name offer. It sounds good on the surface, until you read that you must purchase a non-domain product at the same time. There’s no margin in a $3.99 domain (in fact, GoDaddy loses at least $2.01 on each .com domain), but there’s a huge margin in webhosting, private registration, etc. Plus, your pricing reverts to the normal rate after one year. The latest cheap domain pitch comes from Avantex Hosting, which is offering domain names for only $.99 per year. Great deal, right? Nope. You are required to sign up for a hosting plan at the same time. And the $.99 rate is only good for the first year. They’re basically saying “save $6 on a domain, pay us at least $50 this year for hosting”. They should just offer the domains for free, as many hosts do with their packages. But I guess people automatically read the fine print on free things, but not things that cost a buck or two.
There are still a couple ways to get domain names cheap with no catches. First, there’s 1&1’s $5.99 offer (see my review of the offer here). There are no catches, but as my review points out their system isn’t as easy to use as other registrars. Then there’s the cheap renewal game, which involves transferring domains between registrars when they are expiring. Most registrars offer a lower rate for transfers than for new registrations, with the hope of making up the difference when you renew at the full rate in the future. To side-step this, you can transfer to one registrar when your domain is expiring, only to transfer it back the next year.
Always read the fine print on domain name offers, especially when they’re below $6. That’s how much registrars have to pay the registry Verisign for .com registrations.