What’s the typical profit margin on WordPress web hosting vs. domain registration?

WordPress hosting typically has much higher profit margins than domain registration:

Domain Registration Margins

• Wholesale cost: $8-10 per domain per year
• Retail price: $10-15 per domain per year
• Profit margin: 10-30% ($1-5 per domain annually)
• Volume business: Success depends on selling thousands of domains

WordPress Hosting Margins

• Managed WordPress: 70-85% margins ($15-50+ profit on $20-60+ monthly plans)
• Cloud hosting: 50-70% margins (varies widely by resource allocation)

Why Hosting is More Profitable

Billing frequency: Monthly vs annual means faster cash flow and earlier churn detection

Customer switching friction: Moving hosting is much more complex than transferring a domain

Price sensitivity: Customers are less price-sensitive for hosting that “just works” vs commodity domains

Bundle stickiness: When hosting and domains are bundled, customers are less likely to move just the domain

Margin scale: Even at similar percentages, hosting’s higher absolute prices mean more dollars per customer

Many successful hosting companies use domains as a loss leader to acquire customers for their hosting products, where the real money is made.