Here, we explain how renting works and why it may be a smarter choice than purchasing it, especially for long-term use in certain cases.
Buying a domain is often too expensive for startups
As a startup, facing a price tag of, say, €6,500, might make you think, “I’ll look for something else.” That money could be better invested in building your website, additional marketing, or bulk purchasing products. And you should consider doing just that! As a new business, this amount is likely to bring a higher return when put towards these essentials than if you purchase the domain outright.
Renting a domain name to save money
What if we told you that you could still allocate that budget to your website, inventory, development, or marketing — and also get the premium domain name you want right away? That’s why many startups choose to rent their domain name. For the first six months, you’ll get a substantial discount, and afterward, you’ll pay a regular rate. You might wonder, “Isn’t that still costly? Wouldn’t it be better to buy it?” Well, that depends entirely on your expected cash flow.
Should you keep renting or eventually buy the domain?
By now, you likely have a good idea of what a paying customer is worth to you. It’s a no-brainer that a premium domain name will increase traffic to your site and, assuming your site is well-designed, convert more visitors into paying customers. Based on your revenue, you can calculate how many customers you need to cover these costs. You may already have monthly expenses for things like office rent, website maintenance, insurance, utilities, product or service purchases, and now, potentially, a domain name. If your monthly fixed costs for running your business are €1,300, and renting a domain adds €49.95 per month, your total fixed costs would be €1,349.95. This is a modest increase of just under 4%. Of course, even that 4% has to be covered, but it’s still much more manageable than a €6,500 investment (excluding VAT).
“But won’t I be completely dependent on the domain’s owner?”
No, not with Domeinenbank! We’ve made domain name rentals fully secure and transparent. In THIS article, you can read more about it, but here’s a quick overview of your rights:
- As a renter, you always have first rights to purchase or renew your rental agreement.
- Bids from other interested parties will not affect your position as a tenant, even if your contract is close to expiring.
- Monthly costs increase by 5% each year, unless the inflation rate reported by CBS (Statistics Netherlands) exceeds 5%.
- Before you start renting, the buyout price will be provided. This price remains valid for 12 months and will be reviewed afterward based on the market, not your (apparent) success.
Want to know more? Feel free to reach out to us! You can contact us via WhatsApp at (+31) 06 23377514 or by email at [email protected]. Send us a message! We’d be happy to help you find the best solution for your unique situation.
