How is Godaddy able to sell domains for as cheap as $1?

Question

I read this question which made me realize why domains are worth around $10. Almost a year ago, I purchased a domain from Godaddy for $1. Godaddy sells.com's very cheap for the first year. How are they able to do so?

Answer 1

As John Conde says, they are making a loss, and making up for it when they auto-renew your credit card. Most users do not know how to transfer a domain away from a registrar once it's registered.

Also, they are selling addon services.

It's the old adage, 'Get them in the door, then sell them everything'