There are more than 100 million known domain names registered in the United States alone. It seems that everyone is trying to find their way online, with millions of eCommerce stores operating worldwide and many more trying to establish their presence.

But while the opportunities are lucrative, the initial costs can be daunting as well. Many businesses are afraid of joining the web because they’re unsure how much they’ll have to spend.

So, to appease at least some of those worries, let’s look at how much a domain name can cost and what factors can influence the price. But first, we must figure out exactly what a domain name is.

What is a Domain Name?

Since a domain name is an integral part of building a website, it’s good to understand why you need it in the first place.

Basically, a domain name is like an address that people can use to find you. Just like your physical store can have an address where people can reach you, the online version needs an address people can type into the box to go directly to your site.

This convenience of short and easy-to-remember domain name addresses is probably one of the key reasons why the internet took off in the first place. Instead of having to remember complicated IP addresses, people could simply type in a simple phrase or word, end it with the right extension, and be where they want in a few seconds.

Today, domain names can be powerful online real estate. Just look at what companies like Google or Amazon were able to build using brands built around simple and catchy domain names.

So, even though you can get a cheap domain pretty easily, that does not mean that the price will remain the same. If you snag a domain name that gains value, you can sell it for hundreds of times the original cost.

How Much Can a Domain Name Cost?

Now that we’ve figured out what a domain name is, we need to figure out how much it can cost. But even though many novice entrepreneurs are afraid of how much it might cost, you can buy cheap domain names pretty easily, given that you choose a reputable provider and know what to look for.

Let’s explore some of the most important considerations when buying a domain name, as well as factors that might influence its cost.

The Registrar

A domain name registrar is a business that sells domain names. Every single domain that’s bought or sold goes through a registrar, and there are hundreds of companies you can choose from.

But just like everywhere else, not all companies are created equal. The quality of the services, the pricing, and even the additional perks you can receive will differ depending on the company you choose, so make sure that you consider your options and don’t jump at the first opportunity to buy.

Obviously, price should be an important consideration, so look at which registrars offer the best rates, as well as the best extension options.

But you should also consider how long it has been in business, what others are saying about it, and whether the company looks trustworthy to you.

At the same time, just because a company has been around for a long time doesn’t mean you should go with it. Some of the better-known names have gotten a bad rep for providing lackluster customer service, which can be a nuisance when you’re trying to set up your site or connect your domain to your hosting.

The Number of Years

Domain names are bought and renewed in yearly cycles. But just because buying a domain name for a year is the most popular option doesn’t mean you have to do that, especially if you want to save money.

Buying a domain name for multiple years can often result in significantly lower prices. That’s because domain name registrars will usually be willing to take a lower amount now than risk losing you as a customer a year later.

Sure, the extra upfront cost might not sound like an appealing proposition. But at the same time, you probably aren’t planning on closing down your site in a year. So, the expenses will come due sooner or later, and if you can pay right now, you won’t have to worry about domain name renewals for years to come.

However, if you are just playing around with an idea and aren’t sure whether it will pan out, you might want to stick to the annual contract at first and try to take advantage of the longer contract benefits once you know that the website is gaining traction.

The TLD Extension

Another important aspect that impacts the price of a domain is its TLD extension. The extension that you choose can significantly impact price, even if the name itself is identical.

But what is a TLD extension?

Well, TLD stands for top-level domain, and it’s the extension you see at the end of every domain name you type in. Some of the most popular options are .com, .net, .edu, and .gov, but choices like .biz, .co, or .info are becoming increasingly popular as well.

For most people, the .com domain seems like the safest choice. But while there are mixed opinions on the subject, other extensions are becoming more popular, and consumers are becoming more accustomed to them as well.

In fact, many brands have used .io, .co, and other domains to launch unique online brands that are heavily based on the TLD extensions that they use.

And if you’re worried about price, be sure to look at not only how much a domain name costs right now but also what it will cost to extend. Some domain name extensions have steep initial discounts but can be significantly more expensive to renew.

Availability

In the previous sections, we mostly talked about situations where you’re buying a brand new domain name that is available. But that won’t always be the case.

Sometimes, you will find that the domain name you want is already owned by someone else, which can skyrocket the price to thousands or even millions of dollars.

Because of that, if you can avoid it, try to come up with an original name that isn’t taken yet. Sure, you might not get some of the shorter and more catchy domain name options, but there’s a limitless amount of possible domain names, so if you keep at it and brainstorm options, you will inevitably find a good fit that’s available and won’t break your bank before you even get started.

Final Words

Finding the right domain name can be challenging, especially if you’re unsure how much it might cost. In fact, many new entrepreneurs are hesitant about starting a company because of the costs associated with opening up a website.

But the good news is that if you take the time to brainstorm domain name ideas, you should have no problem finding the perfect domain name that won’t cost you more than a dozen dollars to start with.