This is an archived blog post by Nairahost…
Over our three years in the web hosting and domain registration industry in Nigeria, we have been asked then and again with questions like this, “Why are you not giving out free domain names with your hosting packages?”, or “Why do you charge [x]Naira for a domain name when I can get one from [one of our competitors] for [ less than X ]Naira?”.
I am pretty sure that more of this relative question would be asked in the future, even after this post. To begin with, free domain names, are not free, they come with conditions or “strings”. No Registry gets domains for free, For example, a .com domain name, costs the Registrar $6.00 approx 750Naira per year (one .com domain name for one year).
Nairahost even though it uses dedicated servers, resells domain names through a registry. Nairahost, obtains the domains from the registrar at a far more higher price, because the registrars have to make profit from their products. Nairahost is considering becoming a registrar in the future. So perhaps then, it could further reduce its domain costs overhead.
Some Registrars sell directly to the public (GoDaddy, Network Solutions, Register.com, etc.) and some sell through resellers such as ISPs and web hosts (Tucows, eNom, etc.). Registrars provide WHOIS services for their domains, handle abuse reports, and provide the management tools to their customers.
People should not accept any offers for free domain names because they are usually tied to a package which you must be paying for otherwise you would lose the domain name, because that would entail breaching the contract, you agreed to, when you received the free domain name.
It is advisable to pay for a domain name, even if it is just N1.00 than to get a free one. When you pay as little as N1.00 there is a monetary commitment between you and the provider, so the provider cannot withdraw or seize the domain name, should you decide to move away from the provider for whatever reasons, you might have.
Furthermore, paying as low as N1.00 for a domain name should not be done, as services provided under such low cost, are very questionable and often are pre-packaged with hidden contractual agreements that would cost you your domain name, when you breach it.
Some registrars ensure that you can only renew with them at a higher price, some only enable the ability to transfer the domain after a 2 year contract, and others have even more ridiculous terms. So its very imperative, that the customer reads the providers term of service before he or she signs up for a free domain name.
Why does Nairahost charge for Domain names?
We are a reseller of Directi for domain names. Directi provides support to us and we provide this support to our customers. We have software infrastructure invested in integrating our system with Directi.
Since this infrastructure cost us money, we need to price our domains, so that we can make money on them while balancing this with choosing a price for our customers vs what our customers can afford to pay for it while maximizing our market share.
For our domain names, we have a reasonable profit margin enough to offset our infrastructural cost and product cost.
This covers our administrative overhead for processing domain name orders, providing and updating a Knowledge base of frequently asked questions, providing a domain management interface, and providing support for the domain name our customers register through us.
With a decent profit margin, we are enable to give our customers the support they require and able to sustain our business.
We realize that this isn’t what every customer wants and that we lose customers because we do not give or offer free domain names with our products and services.
Nevertheless, we have many happy domain name customers that know they can rely on our reliability and sustainability, while rendering the top notch support for the services we provide them.
Domain Names are a critical part of most of our customers businesses and we are here to provide the services and support necessary at a price that we hope is reasonable, yet allows us to do this with a small profit that pays for our bills.