whyadomainisfreeAs part of SquareSpace’s marketing pitch, they give away a free domain.

I find this interesting because, since they continue to advertise it, it must be working.

But allow me to let you in on a little secret.

This really isn’t a big deal. Actually it’s genius of them. Here’s why:

‘Free’ is an excellent psychological term. 

I don’t need to tell you this. We all like to feel like we are getting something for free. Am I right?

Domains cost less than $10 so giving away one to a customer that’ll give you at least ten times that is no big deal. 

When you buy a domain as a consumer, you can pay anywhere from $12/year (Enom price) to $35ish/year (Network Solutions). You’ll pay this to renew your domain name too. You can chose to renew your domain for one, two, five, any number of years. But when it’s time to renew, you’ll have to pay again to be able to keep using the domain name.

Now a company is not ever going to sell you something for less than they paid for it. That would be silly. (Note from Matt Baya: Unless this product is considered a ‘loss leader’, which is a below-price product designed to get you in a store and ideally buying more other products.)

An additional cost that consumers don’t have is also at play. To be a domain reseller, you need to pay a few hundred dollars a year. In other words, the reseller needs to make $300-$400 to keep being able to be a reseller.



A company like SquareSpace (a reseller) pays a little less than $10/domain. So if they sold it to you for $12, they’d make about $2 on you. If they sell it for $35, they make $25 on you. Once you pay back your reseller fees (and at $2/domain, it might take you awhile to get to $300), you are making money on this proposition.

But if you buy, say, a year of service at $10 a month, SquareSpace gives you a domain for free. So they make $120 and give you $10 of it. Not a big loss to them to give you this small gift. I mean if you had to give a customer something and then you know you’d make ten times that off them, you’d do it right?

They can make sure it stays renewed.

This is probably the most convenient reason to let SquareSpace (or any web host) get the domain for you, whether you pay for it or get it free.

When you register for a domain name, you do so with an email address. Before it’s up for renewal, you’ll get an email letting you know.

But what happens when you ignore it or change email addresses before it gets renewed? You can guess I am sure.

If you don’t renew your domain name, it is assumed you do not want it and suddenly, your domain name is for sale again. Best case scenario: your website is offline while you buy it back for what you paid for it. Worse case scenario: Someone buys it and makes you pay $500 (or more) to get it back. (This happened to someone I know and she had me broker the deal. Painful.)

I keep track of when my clients’ domain names are up for renewal. But some developers don’t so you should know when yours is due. Here’s how you tell.

1) Go to whois.net. Type in your domain name and press go:

whoisnet

 

2) The next screen will have information about your domain name including when it expires:

whoislookupexdate

 

So I need to renew my domain before April 15, 2014.

If a company like SquareSpace has control over your domain, they can make sure it gets renewed. The flip side of this coin is you are relying on them to do this. I usually make clients register for their own domain so they know they own it. That said, I tell them if they are comfortable they should give me access to their domain registry account so if they are off in Tahiti and their domain is expiring, I can get in there and do the renewal.

The free domain? It’s genius. It’s something that doesn’t cost SquareSpace much, it prevents the disaster of an unrenewed domain name, and the customer gets to feel warm and fuzzy about getting free.

Tell you what, if you ever become a client of mine, I’ll give you a free domain…because it’s cheaper than buying you lunch.