How do people buy Domain Names?

Question

GoDaddy charges $8 for a domain and name.com charges $10. Some people seem to buy many domains to increase their SEO or to sell them later for more money than they paid.

Do these people pay less per domain because they buy in bulk or are they doing something else to pay less for their domains? It seems like it is expensive to buy that many domains just for SEO or to resell.

Answer 1

For large quantities of domains, most registrars offer bulk pricing, often as much as a reduction to half of the original price. If the domains are worth it, and get random hits, it should be possible to generate more than that registration fee by placing ads. If not, they'll just get rid of that domain. Considering the huge quantities of domains in the hands of people who try to monetize them, it seems to be a business model that works.

Answer 2

People will buy large numbers of domains for 2 major reasons.

1. To put advertising on that site that is relevant to the domain name. This is usually considered web spam and Google and other search engines try their best to exclude these sites from their results.
2. In the hopes that one of the domain names becomes important to a specific company who will buy it for a large amount of money. Some sites have sold for well over $10,000.

People will try to use the combination of the above 2 to make a profit and some people/companies have done very well doing just that.