Renewal Costs and New Extensions

A discussion in a NamePros thread with respect to new domain name extensions (ngTLD) has touched on the topic of renewal costs.  It is often stated by ngTLD critics that renewal costs are prohibitive as one of their arguments against new domain extensions. I decided to take an objective look at whether this claim is actually supported by data. Here is what I found.

Finding Best Prices

Fortunately for us in the domain community, sites such as TLD-list allow anyone to easily find the best prices for domain registrations, transfers and renewals.  That site updates the data every few hours, so you can readily find the most up to data information for any of the extensions over the numerous registrars that they track.  Several other sites track cost data.  For example, if you look up an extension on NameStat the costs at various registrars are given on the right hand column.  One reason I prefer the TLD-list is that they include reviews for each registrar, and if you scroll to the bottom they will show you have a graph showing registration, transfer and renewal costs as a function of date.  This is useful information to see what a typical rate is, and it also helps you see if current deals being offered in an extension are a god deal.

Legacy Extension Costs

First off, I used the TLD-list data to find the least expensive renewal rate for the main legacy extensions that are widely traded. These data change every few hours, so you may find slightly different values, but these values reflect the best prices as of right now in each extension. Let me emphasize that these are the best prices, and the costs at any particular registrar may be more.

• .com $8.75
• .net $9.78
• .org $9.99
• .info $10.98
• .io $29.95
• .co $21.47
• .ai $70.88

So for the most frequently held and traded extensions (com, net and .org) the renewal price is typically $9 to $10.  This does not vary much, as the wholesale costs to the registrar is only a bit less than this, and competition from the many registrars who handled these extensions keep it from going much higher as well.  Occasionally there are deals offered on new registrations and transfers, but seldom significant ones on renewals. If you browse daily NameBio domain name sales reports, you see frequent sales of .co and .io extensions, so I included those country code renewal rates as well.

Most Popular New Extensions

While it would be challenging to get data on renewals of all ngTLDs (over a thousand), I wanted an objective measure of rates for the extensions most frequently encountered. The nTLDstats site gives registration data for each extension. From that site I took the ten most registered of the new extensions. Together these 10 extensions currently account for 52% of the total ngTLD registrations and a large percentage of ngTLD sales numbers over the past year (at least) - for example see my monthly analysis at this link, and scroll to bottom of that post to see links for previous monthly reports.

I think we can accept the following extensions are representative of the most encountered ngTLDs.  I list the best (note prices updated to Aug 30, 2018) price (obtained via TLD-list) for renewal cost of each extension.

• .top $4.99
• .loan $11.50
• .xyz $8.50
• .club $8.88
• .vip $6.99
• .online $16.99
• .win $11.50
• .shop $25.95
• .ltd $14.46

Four of the top 5 of the ngTLDs all have renewal prices better than the average of the best renewal rates for a package of .com, .net and .org domain names. The new extension renewal rates are all significantly better than some popular extensions such as .co and .ai and many others.

Lest you think these rates are only for some obscure registrar you don't want to deal with, the lowest rates for .top, .loan, .online and .win are at NameSilo; for .club, .shop and .ltd it is Porkbun; for .xyz lowest prices are at Epik, and for .vip Dynadot offered the best rates at the date off checking. These are all registrars I respect and would or do use. Also, the rates at other popular registrars, such as Namecheap, are almost as low.

Premium Renewals

New extension domain names in some, but not all extensions, have certain names reserved and sold by the registry at higher premium values.  It depends on the registry whether these premium prices are only for the original sale, or if there is a premium renewal rate as well. Be cautious of these in your portfolio is good advice, and always check any name you are considering buying to see if it is 'premium' in this sense. I give potential users this advice in my domain descriptions (but potential purchasers should independently confirm the information of course!).  You can readily find this rate by starting as though you are going to renew any particular name using your favourite registrar site. I am glad that the newest significant ngTLD release, .icu, have standard renewal rates even on those that they are selling at premium initially. I hope that becomes standard across the ngTLD space.

Sensible Domain Investing and Costs

A big part of being successful in domain name investing, no matter the extensions you invest in, is to be quantitative and sensible in considering costs and likely returns.  Let's say that you can acquire a certain domain name for $25 initial cost, and the renewal cost in the extension is $5 per year.  If you reasonably estimate that you have 1 chance in 100 to sell it over a 5 year period for a price of $2000, then the investment does not make sense.  Your costs ($25 + 4 x $5 = $45 costs) multiplied by 100 is $4500.  But your anticipated price when you sell the domain is $2000, close, but not enough to make it a sensible investment unless you can improve either the price or the likelihood of making the sale. You should do an analysis such as this for every domain name in your portfolio.

Be Alert to Deals

I have not included the deals you can get on multi-year renewals if you know where to look, wait for the right deal, and shop around. I have renewed a .site for 5 years for $8.88 for the 5 years (not counting ICANN fees - I wish I had registered more at that rate, now gone), a .science for $5.88 (unfortunately no longer available), and you can occasionally register a .tech for 10 years for about $40.00 total. Sometimes I lock in renewal rates for the number of years if I expect to be holding the domain name for a long time because I both regard it as good and more valuable in future (e.g., emerging technology).  I have a number of domains registered for more than 5 years, and a few for 10 years.  Depending on the extension, 10 years is often the longest time you can renew a name. Lets all be smart about renewal costs!

Consider Registration Period

Those not in the domain name investing business often do not realize that, in general, when a domain name is transferred from one owner to another the registration transfers with it.  Let's say I bought a domain name and registered it until May of 2023 because my registrar offered a great deal on the multi-year registration and I wanted a number of years to try to sell it.  However, you bought it right off, and this extra registration now goes to you.  If you get the domain name at the same registrar, but now in your name, via a push, you won't even have to buy any extra registration time.  If you buy it through most resellers, or if the domain is transferred to your account at a different registrar, normally you will need to buy one extra year of registration when the name is transferred.  In this case you would pay one year of registration, but it would now be registered until  May of 2024. One advantage of purchasing domain names through  registrar marketplaces such as the Namecheap Marketplace, is that you will not have to purchase an extra year.  Make sure that you consider the registration period when deciding whether a price is appropriate.  I combine this and other tips from this post in the next section.

Tips

1. Always check whether a domain name has premium renewals before acquiring it. If you do acquire premium domains, take costs into account in estimating the anticipated ROI.
2. Use a resource like TLD-list to find the best current prices for registration, transfer and renewal on any domain name.
3. As well as lowest price, do pay attention to reviews of different registrars when choosing where to register. Sites like NamePros can help learn of experiences of others. Also, even if there is a differential price, it may not be worth your effort to use an additional registrar.
4. In both legacy and new extensions, renewal rates are only guaranteed for a limited period in future. If you feel you are likely going to hold a domain name for an extended period, either for development or domain investment, consider registering for multiple years.
5. The currently registered period normally transfers with the domain name.  Take this into account when considering the price of a domain name, both as a buyer and a seller.

Conclusions

For the vast majority of ngTLDs really being used and held as investments, renewal costs are competitive to legacy extensions, and more often than not actually less. While this is true for the vast majority of ngTLDs, do be alert to premium names in some extensions, and to extensions that have high renewal costs.  You can frequently find extra savings in multi-year registrations, or by shopping around registrars.  Look into the current registration period when buying and selling domain names.

Original post Aug 1, 2018
Minor format change (line spaces, illustrative image - no content change) Aug. 5, 2018.
With the changes in the costs of the former Famous Four extensions I have updated the renewal costs to values current to Aug 30,2018,  and altered text as appropriate. 

Links:

• NamePros link that triggered this study
• TLD-list (best prices on any extension)
• NameStat 
• nTLDs site (statistical data on new extensions)
• Our site NamesThat.win - please visit!
• Namecheap Marketplace
• Permanent link to this blog post

Fine Print

This post is offered for informational and educational purposes only, and should not be considered domain name investment advice. While an attempt has been made to be accurate, there is no implied or explicit warranty, and you are responsible for verifying any information of importance to you.

In a few cases there may be affiliate links will on this blog. This means I receive a small amount if users visit or make purchases via the link. You do not pay any additional charge due to using an affiliate link, and in some cases below the normal price. I receive no identifying information about who clicks, or does not click, any link. I never accept compensation to provide favourable review of any particular service or product.

I try to be fair, balanced and objective in my analysis.  If you feel this post does not meet that standard, please express your concerns to me.  As disclosure, I do have a domain portfolio that is predominantly ngTLD domain names, although I do also own a number of .com, .ca, .co and a few other country code extension domains..

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