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Originally Posted by SMHarman
The headline price is never the price. It's easyjet style pricing, Register for 1p (plus £1 a month DNS Admin fee) ooh that now £12.01 a year. A profit.
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But by the same token, some companies out there, do sell cheaply, and don't rip you off with dns charges and so on.
As was said, it really just comes down to bulk - you get enough people buying domains your prices come down - you'll find a lot of places will run at a loss first of all to build up the customer base, so that over time the wholesale prices comes down to something more reasonable. You just need a large bank balance to carry it through.
The domain market has become incredibly tough recently, with more and more companies having to try and encourage customers with other things, such as hosting, email and so on.