Wednesday , March 29 2023

Beware of High Annual Renewal Fees

When I bought a handful of .XYZ domain names, I had a look at the list of premium .XYZ domain names to ensure I wasn’t going to face the decision of paying a high transfer/renewal fee or losing my initial acquisition investment. Domain investors who buy non .com domain names that aren’t ccTLDs or legacy extensions need to be mindful of the potential landmine that are premium renewal fees.

Marc Kohlbrugge shared a warning on Twitter after he purchased a domain name for $5,000 that had a $55,000 annual renewal cost:

Marc disclosed that he anticipated a higher than usual renewal fee but was surprised that the cost was $55,000:

I am not sure what registries beyond .XYZ have lists of their premium domain names and their individual renewal fees. I believe people may be able to check the annual renewal fee by initiating a transfer to their domain registrar. This is not necessarily the best way to do it, but I think it should show the renewal fee.

One thing Marc said that I agree with is that the annual renewal fee should be disclosed at the time of purchase:

Domain sales platforms should ensure that sellers disclose these renewal fees. I also believe domain name sellers should be obligated to tell buyers about premium renewal fees for private transactions.

It turns out the domain name Marc purchased was a single letter .XYZ domain name, and he was able to revert the purchase:

Learning about a premium renewal fee after purchasing a domain name is an unwelcome surprise.

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