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Typical Domain Name Costs

$35 Registration fee (ONLY if you have someone else do the paperwork for you)
$35/year to an ICANN accredited registrar for use of your domain name
$50/year to the company which hosts your domain name in their DNS servers (normally included in website hosting).

Of those costs, the $35/year fee to an ICANN accredited registrar is the only fee you must pay to have a domain name. If you understand the process, you can register the domain name yourself at an ICANN accredited registrar and save the registration fee. If you have your own network, you can run a DNS server and host your domain name yourself. Since few people or businesses fall in this category, obtaining a domain name typically involves paying someone to register it through the Internic, paying the Internic for the use of it, and finally paying for hosting services.

The first cost is in having someone to register the domain name for you. It is often easier for a business to have someone else deal with this to make sure everything is done correctly. It's not difficult but requires you understand the DNS process and know the IP numbers of the domain name serves which will host your domain name. If this sounds like more than you care to deal with, the $35 registration fee is usually an easy choice. Note: When hosting your site with AIC, there is no processing charge.

The second cost is the fee you pay the top level registrar of your choice for the use of your domain name. Few people know this but domain names were initially given out by the Internic for free. As the Internet grew in popularity, the amount of administration forced a change in this policy so that registrants had to pay a fee for the registration and renewal of domain names. At first, the fee was $50/year and was later reduced to $35/year and now varies widely amongst registrars since Network Solutions no long maintains a monopoly.

A common misconception is that paying the Internic this fee for a domain name means it is automatically available for use. The Internic ONLY manages the ownership of domain names and does not make them available for use. It is similar to garbage collection, you can buy a garbage can but that doesn't mean anyone will come by and empty it. You still have to pay a collection company before it will be useful. The third cost for a domain name is for the service of making the domain name available on the Internet. Since this cost is almost always included in website or e-mail hosting packages, you normally are not charged directly for this service.