Domain Name Mark Up

[webling]

I'm trying to determine better pricing and such things and wondering what a fair mark up would be for domain resellers? I buy my domains from a reseller company and typically add a couple bucks to the price of the domain. I don't know if this is too high or too low. Any thoughts?

 

[justsimplehosting]

I'm trying to determine better pricing and such things and wondering what a fair mark up would be for domain resellers? I buy my domains from a reseller company and typically add a couple bucks to the price of the domain. I don't know if this is too high or too low. Any thoughts?

When we started our hosting journey in 2021, we faced the same questions about domain markups.

After processing a few test domain registrations, we realized that when a customer pays via PayPal, they take a transaction fee of 2.29%–3.49%, plus a fixed charge of 49¢ per transaction. These fees can significantly eat into your profit margins.

However, it’s important to note that you can’t charge customers separately for PayPal transaction fees, as this is against the law (this ban took effect in January 2018).

We quickly realized that marking up domains too low for such a tailored service would not be sustainable. As a result, we decided to apply a +50% markup to our domains. This allowed us to cover the costs of domain registrations, transfers, and customer support while still making a reasonable profit.

You also need to consider the cost of supporting your customers. Are you earning enough from your domain sales to cover the support you provide?

For example, our hosting service, which includes a domain name, costs £55.38 per year—this is competitive within our local market.

It’s also important to note that you won’t be able to compete with larger providers like GoDaddy or Bluehost in terms of pricing. They benefit from wholesale pricing due to the volume of domains they own. However, you can consider lowering the markup as you build your domain portfolio, allowing you to offer more competitive pricing over time.

We also make it clear to our customers that domain names can often be found cheaper elsewhere. However, many clients prefer the convenience of keeping everything in one place rather than managing multiple providers.

What’s your experience with domain names and price markup?

 

[Greenhost.cloud]

A few bucks on top usually works, but it depends on the value you’re offering and what your customers expect.

 

[webling]

When we started our hosting journey in 2021, we faced the same questions about domain markups.

After processing a few test domain registrations, we realized that when a customer pays via PayPal, they take a transaction fee of 2.29%–3.49%, plus a fixed charge of 49¢ per transaction. These fees can significantly eat into your profit margins.

However, it’s important to note that you can’t charge customers separately for PayPal transaction fees, as this is against the law (this ban took effect in January 2018).

We quickly realized that marking up domains too low for such a tailored service would not be sustainable. As a result, we decided to apply a +50% markup to our domains. This allowed us to cover the costs of domain registrations, transfers, and customer support while still making a reasonable profit.

You also need to consider the cost of supporting your customers. Are you earning enough from your domain sales to cover the support you provide?

For example, our hosting service, which includes a domain name, costs £55.38 per year—this is competitive within our local market.

It’s also important to note that you won’t be able to compete with larger providers like GoDaddy or Bluehost in terms of pricing. They benefit from wholesale pricing due to the volume of domains they own. However, you can consider lowering the markup as you build your domain portfolio, allowing you to offer more competitive pricing over time.

We also make it clear to our customers that domain names can often be found cheaper elsewhere. However, many clients prefer the convenience of keeping everything in one place rather than managing multiple providers.

What’s your experience with domain names and price markup?

Your response is excellent. When I went back in to check what I was charging and what I was earning, I think I came up with prices that would cover the PayPal fees. I didn't want to charge too much either so that I can get customers. Mostly, what I've tried to do is keep my hosting prices low enough that it offsets the domain prices being higher. Since I have my own servers rather than being a reseller it's easier for me to compete in the hosting arena. I could set up plans that pay by the year and include a free domain also. I've tried it in the past but found that not many people want to pay for a whole year. Things can get a bit goofy however if a person chooses a hosting package that includes a free domain and then later goes back to monthly payments. Although it can be done it creates more effort.