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If you were to offer a free domain on your webhosting site, you would need to buy it from a domain registrar for the standard price and then register it in the name of the client. Most billing clients, such as ClientExec and WHMCS, will do this for you as long as you have an API account with your domain registrar and have enough money in your domain registrar account. The client's domain will be on your account if you do this and you can charge them as you wish so you can make a profit.

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