Also called sub-domain
Subdomain, explained
Domain names read from right to left. In shop.example.com, com is the top-level domain, example is the second-level label the owner registered, and shop is a subdomain created by adding a DNS record, usually an A or CNAME record, at the DNS host. The owner can create as many as needed, nest them further and point each one at a different server or service; www is itself a subdomain.
Not every third label marks a subdomain in the commercial sense. Under extensions such as co.uk, example.co.uk is a registration in its own right. The Public Suffix List, which browsers use to decide where one site ends and another begins, records these boundaries, and it also lists platform domains such as github.io and vercel.app, so each customer's subdomain there is treated as a separate site.
Subdomains are not separate assets. They exist only while the parent domain is registered and belong to whoever controls its DNS, so you cannot sell shop.example.com on its own. Two risks matter in practice. Scammers place brand names in subdomains, as in brand.com.example.net, so always identify the registered name from the right. And when you sell or drop a name or shut down a service, delete CNAME records that point to outside platforms; a dangling one can let someone else claim that subdomain and serve content under your name.
Many new AI apps launch on a platform subdomain, such as one on vercel.app or hf.space, and move to their own domain once they have users. That move is the point at which they become domain buyers.
Example. The startup ran its beta at app.example.com, a subdomain of its company domain, before buying a separate brandable .com for the product.
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Education, not financial, legal or tax advice. Domain investing is speculative and most domain names never sell. Read the disclaimer.