Scaling Email Outreach: IP Costs to Consider
Scaling cold email outreach can quickly become expensive as your volume increases. Here's what you need to know:
- Starting Costs: For small campaigns, $100/month covers email tools and basic accounts.
- Scaling Costs: Sending thousands of emails daily requires extra domains, mailboxes, IPs, warmup tools, and monitoring, potentially costing thousands per month.
- IP Reputation: A poor IP reputation can tank deliverability and increase costs for recovery, domains, and inboxes.
- Shared vs. Dedicated IPs: Shared IPs are cheaper but risk reputation issues. Dedicated IPs cost $99/month each but offer more control for high-volume senders.
- Hidden Costs: Time spent on DNS setup, troubleshooting, and monitoring adds indirect expenses.
Key Tip: Use tools like Mailforge to automate setup, manage domains, and control costs. Start with shared infrastructure and only switch to dedicated IPs for volumes over 500,000 emails daily. Proper planning and gradual scaling are essential to avoid overspending.
Why IP Costs Increase When You Scale Email Outreach
Moving from Single Sender to Multiple Inboxes
Using a single inbox might work fine for sending a few hundred emails, but when you scale to thousands, things get tricky. Relying on one domain or IP address for high-volume sending increases the risk of triggering spam filters. The solution? Spread your email volume across multiple domains and mailboxes by creating multiple sending identities.
Here’s how the costs break down: each new domain costs about $2 per month for automated DNS setup. Mailboxes, on the other hand, cost between $33 and $40 per month for a 10-slot pack when billed annually. For example, scaling to 50 inboxes requires 10 domains ($20/month) and five mailbox packs ($165/month), adding up to $185 per month just for the basic infrastructure. And that’s before factoring in costs for DNS setup, warmup processes, and reputation management.
These infrastructure changes aren’t just about logistics - they directly influence your IP reputation, which is critical for keeping costs under control.
How IP Reputation Affects Deliverability and Costs
Your IP reputation is like your email sender's report card - it determines whether your emails land in inboxes or get flagged as spam. Scaling without proper infrastructure can hurt this reputation, and the financial impact can be severe. For instance, if your deliverability rate drops from 90% to 70% due to a damaged IP reputation, you’re essentially throwing away 20% of your outreach budget on emails that never even get seen. Maintaining a strong reputation is key to scaling safely while keeping costs predictable.
For businesses sending over 500,000 emails daily, dedicated IPs become a must. These allow you to manage your reputation more effectively. However, they come at a price - $99 per IP per month. If you need five dedicated IPs to handle 10,000 emails daily (2,000 per IP), that’s $495 per month just for IP rental. And don’t forget the time and effort needed for warming up these IPs to gain trust with mailbox providers. Skipping this step can lead to reduced reply rates, forcing you to spend even more to recover performance.
Direct vs. Indirect IP Costs
While the upfront costs of scaling are clear, it’s the hidden expenses that can really add up.
- Direct costs include domain registrations ($2/month per domain), mailbox subscriptions ($33–$40/month for 10-slot packs), and dedicated IPs ($99/month each). For 50 inboxes spread across 10 domains with two dedicated IPs, your direct costs could reach $383 per month.
- Indirect costs, however, are where teams often get caught off guard. A damaged IP reputation can lower deliverability by 20%–30%, leading to costly recovery efforts. For example, a single reputation issue could result in over $500 in extra infrastructure expenses. Additionally, there’s the hidden cost of time - manually setting up DNS records for multiple domains, troubleshooting deliverability problems, and monitoring IP reputation. Without automation, these tasks can eat up hours every week, time that could be better spent running campaigns and closing deals.
Scaling email outreach isn’t just about adding more inboxes; it’s about managing the infrastructure and reputation needed to make those inboxes effective. Neglecting these factors can quickly turn into a costly mistake.
Main Cost Drivers in Cold Email IP Infrastructure
Email Outreach IP Infrastructure Cost Breakdown by Volume
Number of Domains and Mailboxes
The number of domains and mailboxes you use plays a big role in determining your overall budget. Each domain requires a technical setup - such as configuring SPF, DKIM, DMARC records, and custom domain tracking - to ensure your emails land in inboxes. On top of that, each mailbox comes with recurring hosting and maintenance costs.
Automating DNS setup and domain masking typically costs around $2 per domain per month (billed quarterly), while mailbox slots cost approximately $33 for every 10 slots per month (billed annually). For example, if your business sends 10,000 emails daily, you might need about 10 domains and 50 mailboxes. That translates to around $20 per month for domains and $165 per month for mailboxes, adding up to an estimated $185 monthly. As your email volume grows, these costs scale proportionally.
Next, let’s look at how your choice between shared and dedicated IPs can further shape your budget.
Shared vs. Dedicated IPs
Your decision to use shared or dedicated IPs has a direct impact on both your costs and your email-sending strategy. Shared IPs are usually included in email platforms at no extra charge and don’t require a warmup period. However, since you share the IP with other users, their actions can affect your sender reputation. Shared IPs are generally a cost-effective choice for businesses with low to moderate email volumes.
On the other hand, dedicated IPs give you complete control over your sender reputation but come with higher costs - about $99 per month per IP. For instance, if you’re sending 10,000 emails daily using 5 dedicated IPs, you’d spend approximately $495 for the IPs, plus $20 for domains and $33 for mailboxes, totaling around $548 per month. Dedicated IPs are typically worth the investment when your email volume exceeds 500,000 emails daily.
But domains and IPs aren’t the only expenses. Operational costs for warmup, monitoring, and DNS management also play a crucial role.
Warmup, Monitoring, and DNS Management Costs
Operational expenses are essential for maintaining email deliverability, especially as your sending volume increases. Warming up new domains and IPs is critical - skipping this step could reduce your deliverability by 20–30%, which can lead to expensive recovery efforts. Some platforms include warmup services in their pricing, while others charge extra or require manual setup.
Real-time monitoring is another key factor. Keeping an eye on open rates, spam flags, and inbox placement helps you catch issues early, saving you from costly recovery efforts. Additionally, automated bulk DNS updates can significantly cut down the time and labor required to manage multiple domains.
"Procedures that usually took hours (setting DKIM, SPF, etc. records) for multiple domains, now take a few minutes. Mailforge is also cost-efficient since you spend per mailbox ~3 times less than with Gmail. The support team replies in minutes and is happy to sort out issues in a proactive manner!"
- Danny Goff, Director of Sales, Propeller
If your team is sending over 1,000 emails daily, expect to budget $50–$100 per month for shared setups. For dedicated IPs, operational costs can exceed $500 monthly when sending around 10,000 emails daily.
Common IP Cost Mistakes When Scaling Outreach
Keeping costs under control is essential when scaling outreach efforts. Here are some common IP-related mistakes that can lead to inefficiencies.
Buying Dedicated IPs Too Early
One frequent misstep is investing in dedicated IPs prematurely, hoping for immediate improvements in deliverability. However, dedicated IPs require a gradual warmup process and consistent management, which adds to operational costs - about $99 per IP per month.
For most cold outreach campaigns, dedicated IPs only make sense at very high email volumes. If you're sending moderate volumes, like 10,000 emails daily across several inboxes, the added cost of dedicated IPs often outweighs the benefits. In such cases, high-quality shared infrastructure can be a more cost-effective alternative.
Underestimating Domain and Mailbox Growth Costs
Another common mistake is failing to account for the growing expenses tied to domain and mailbox expansion. Adding new domains involves a range of recurring costs, such as registration, renewal fees, DNS hosting, SSL setup, and domain masking. On top of that, there are ongoing mailbox license fees to consider.
Best practices limit each inbox to about 15–30 cold outreach emails per day to maintain deliverability. Scaling to higher volumes - like 3,000+ emails daily - requires a significant increase in the number of inboxes, which quickly drives up infrastructure costs. For agencies using per-seat pricing models, the financial strain becomes even more apparent as mailboxes multiply.
Overlooking these costs often leads to budget overruns, especially if proper warmup practices are ignored.
Skipping Warmup and Maintenance
Bypassing the warmup process for new IPs and domains is one of the costliest errors when scaling. If you jump straight to full production volumes, your new IPs and domains are more likely to face deliverability issues, such as being flagged as spam, blocked, or even blacklisted. Once the reputation of an IP or domain is damaged, recovery can be so challenging and expensive that replacing the asset is often the only viable option.
Replacing compromised assets involves purchasing new domains, setting up fresh DNS configurations, provisioning additional inboxes, and restarting the entire warmup process. This not only inflates direct costs but also creates indirect losses - like missed opportunities due to poor deliverability, extra time spent troubleshooting, and the need to maintain surplus domains and IPs as backups.
To avoid these pitfalls, automated solutions can be a game-changer. Tools like Mailforge streamline DNS setup, automate warmup processes, and monitor performance continuously. These features help extend the lifespan of your IPs and domains while keeping your infrastructure costs under control and predictable.
How to Build a Cost-Efficient IP Strategy for Scaled Outreach
Scaling email outreach means finding ways to keep costs under control. A well-planned IP strategy tailored to your sending volume can make your operations much more efficient.
Match Your IP Model to Sending Volume
Your choice of IP model should align with the number of emails you send daily. If you're sending fewer than 5,000 emails per day, shared IPs are a cost-effective option. For mid-volume senders - those handling between 5,000 and 100,000 emails daily - a hybrid setup works better. This involves using shared IPs while spreading your emails across 20 to 50 inboxes, with each inbox sending 50 to 150 emails per day.
Once your daily volume nears or exceeds 500,000 emails, it’s time to consider dedicated IPs. Keep in mind, though, that dedicated IPs come with additional expenses, such as a monthly cost of around $99 per IP, plus the resources required for warmup and ongoing monitoring.
For teams scaling from 3,000 to 10,000 emails daily, increasing the number of mailboxes from 20 to 60 can help manage the load while sticking to shared infrastructure. Dedicated IPs should only come into play when you're consistently sending close to 500,000 emails daily. By carefully choosing your IP model, you can optimize performance and keep costs in check.
Use Shared Infrastructure to Lower Costs
A smart IP strategy often involves leveraging shared infrastructure to cut down on costs and manual effort. Tools like Mailforge simplify this process by automating DNS setup and offering pre-warmed domains and mailboxes for as little as $2–$3 per mailbox. This significantly reduces operational expenses.
Since platforms like Mailforge are compatible with most email-sending software, you can continue using your existing tools without worrying about the complexities of infrastructure management. This approach allows you to focus on outreach while leaving the technical setup to the platform.
Optimize Sending Volume per Inbox
Once you've chosen the right IP model and adopted shared infrastructure, managing the sending volume per inbox becomes crucial for both deliverability and cost control. Start small with new inboxes, limiting them to 20–30 emails per day. Gradually increase this by 10–20 emails per day each week, keeping a close eye on performance metrics.
For established inboxes, stick to a daily cap of 100 to 150 emails to maintain low spam rates. Instead of overloading a single inbox - say, sending 500+ emails from one account - spread the workload across multiple inboxes. For example, if your goal is to send 5,000 emails daily, you’ll need about 50 inboxes if each handles 100 emails. If you’re operating at a safer limit of 60 emails per inbox during initial stages, you’ll require closer to 84 inboxes.
Additionally, distribute your inboxes across multiple domains, ideally 2 to 5 inboxes per domain, to avoid overburdening any single domain. Platforms like Mailforge make it easy to create and manage hundreds - or even thousands - of mailboxes, enabling you to scale your outreach without a corresponding increase in manual setup efforts.
Conclusion
Scaling email outreach without a solid IP strategy can drain your budget and harm your email deliverability. The key takeaway? As you scale, IP and domain management becomes more complex. Moving from a single inbox to hundreds means managing multiple domains, mailboxes, DNS records, warmup schedules, and constant monitoring. Neglecting your IP reputation can tank reply rates, force you to replace compromised domains, and make your investment in leads and tools far less effective. This is why it's essential to choose between shared and dedicated infrastructure strategically.
Stick with shared infrastructure until your email volume justifies dedicated IPs. For most U.S.-based teams, shared setups offer predictable costs until you're consistently sending hundreds of thousands of emails daily. Skipping warmup or maintenance, however, can quickly land your emails in spam folders or get your domains blacklisted - leading to costly domain replacements and reputation recovery efforts.
The most cost-effective approach combines shared infrastructure, controlled inbox volume, and automation for DNS management and monitoring. Tools like Mailforge make it easy to scale by enabling you to create hundreds or thousands of domains and mailboxes in minutes, complete with automated DNS setup, SSL, and domain masking. At just $2–$3 per mailbox per month, this is far more affordable than alternatives like Google Workspace ($8.40 per mailbox) or MS365 ($6 per mailbox).
To protect your outreach and budget, take a close look at your current setup. Audit your domains, inboxes, and spending on DNS, warmup, and monitoring. Set clear daily email limits for each inbox and establish thresholds for when to expand your infrastructure rather than overloading existing resources. Opt for tools that allow you to scale without punishing you with per-seat pricing, so you can add mailboxes as needed to safeguard your reputation without breaking the bank. A well-thought-out IP strategy ensures your infrastructure spending aligns with your revenue goals and maximizes every dollar you put into leads and your sales team.
FAQs
How does an IP's reputation affect the cost of email outreach?
An IP's reputation is a major factor when it comes to the cost of email outreach. If your IP has a bad reputation, your emails are more likely to get flagged as spam, struggle to reach inboxes, and may require expensive fixes like IP warming or buying dedicated IPs. These solutions can quickly add up and inflate your costs.
On the flip side, keeping a solid IP reputation can save you money. It boosts deliverability, minimizes spam filters, and eliminates the need for costly corrective actions or infrastructure changes. Taking a proactive approach to managing your IP reputation is essential for scaling your email campaigns efficiently while keeping expenses in check.
How do I know when it’s time to switch from shared to dedicated IPs for email outreach?
Switching to dedicated IPs makes sense when your email outreach volume increases significantly or if you start facing issues with email deliverability. With shared IPs, your sender reputation can be influenced by the behavior of other users, which might negatively impact how your emails perform.
By using dedicated IPs, you gain complete control over your sender reputation. This can lead to improved deliverability and greater reliability as your campaigns grow. If avoiding problems tied to shared IPs and maintaining a strong sender reputation are priorities for your email strategy, it’s probably time to make the change.
What costs should I be aware of when scaling email outreach?
Scaling email outreach comes with a variety of expenses that can pile up fast. For starters, you'll need to account for the costs of managing several domains and mailboxes. There's also the setup and ongoing maintenance of DNS records, along with domain masking to safeguard your sender reputation.
On top of that, ensuring high deliverability often requires investing in infrastructure. This might mean using dedicated IP addresses or private email systems, both of which can become more expensive as your outreach efforts grow. Understanding these costs upfront can help you budget wisely and steer clear of unpleasant financial surprises.