Addon domain is a functional domain that can be created in control panel. The practice allows users to establish several different websites within a hosting account and manage them with the same control panel. Once you create an addon domain, there are three processes: the creation of the domain folder, the establishment of subdomain, as well as the connection between the new domain and the subdomain.
For example, you already have a domain name that is DOMAIN.com on your account, and then you create the ADDON-DOMAIN.com as the addon domain. After this, the addon-domain.com becomes an independent website, and nobody except you realizes this website is a part of the primary DOMAIN.com. In this way, you can build a totally new website without purchasing another hosting account.