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Companies like Bidsketch offer their participating agencies a unique subdomain to create to access their account with Bidsketch. From a site structure perspective, how are they doing that? They don't physically have a separate site for each account? Any insight would be great!

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You are right that they may not have a physical site for each account.

Typically, you would want to identify the 'tenant' information from some part of the URL - either the subdomain/hostname or a part of the URL segment after the host name. The request would get routed to a single site (in a cluster) - either by DNS or by a device sitting before the web cluster that strips off the tenant id from the URL segment, writes it into a cookie/request header and route it THE only site.

Early in the request pipeline in the web server, logic in the request pipeline could pick up the tenant information, possibly put it in an application/framework context that is available through the lifetime of the request and process the request accordingly, possibly sourcing data from tenant specific stores.

Hope this helps !