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I purchased a domain from Namecheap, say myname.example. I'm not hosting anything with this domain or or any of its subdomains. I want to create a G Suite account with the subdomain subdomain.myname.example, so that I can have Gmail addresses of the form [email protected].

So far, I added the TXT record from G Suite to Namespace with the host being the subdomain subdomain.myname.example. But G Suite is unable to verify my ownership with this. Is there something else I need to do?

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Yes, you can use a custom subdomain setup for your G Suite. All you need to do is to setup an MX record for subdomain.yourdomain.example and point it to the Google's mail servers. The specific procedures are documented on setting up MX records for G Suite Gmail

Pretty much it should look something like:

Host Record type Priority Value
subdomain.yourdomain.example MX 1 ASPMX.L.GOOGLE.COM.

MX records in general are regardless of the domain name zone level. In your case, the subdomain zone is the 3rd-level zone -- example being the root zone. It should work the same either setting up your email addresses as @subdomain.yourdomain.example or @yourdomain.example.

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You can do this by adding/creating alias to your domain in Gsuite settings, which will create additional addresses for all your mail addresses for example all email addresses ending with @yourdomain.com can also be reached at @subdomain.yourdomain.com please refer this document for more elaborated information on this topic

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