Reseller Markup

W

webling

Member
Is there any rule of thumb on markup when reselling IP's or domain names? I can resell both and am trying to gain a general idea. I have thought of doubling the dollar amount, but because my focus really is on web hosting and is where I make may money it may be best to do a smaller markup. I know on domain names even though I want to double the price I pay it would scare clients away. Also, any time I can roll things I resell into a web hosting plan seems like a smarter approach. Since I'm not a reseller in web hosting I can take a small loss on services I resell because I can still earn a fair amount on the space I offer.

As I look at other web hosting companies, it doesn't appear to me that there is any rule of thumb and many things I am seeing are unconventional. But I'm old school and I believe in charging a fair dollar for a fair effort. I did recently update one of my larger hosting plans and added more to it at no extra cost to my clients who have that plan. So I do believe in giving where I can, but also at the same time we all know our base cost and to hurt ourselves is just plain stupid.

So even though in some ways I am not a reseller and yet in other services I am a reseller I am trying to juggle things so that if I do sell things that I resell that are not rolled into a package I am trying to figure out if I should just offer them at cost or what percentage or amount I should tack on that is fair both to me and my clients.
 
Many hosts give domains away for YEARLY plans, you could think about that as that ties down a customer for a year. Generally most people who have been around a lot would buy domains at different registars.

Try selling domains a little more expensive ( like 20 % ), so some clients who prefer to have everything in one control panel, would buy it from you rather than purchasing it cheaper elsewhere.

For IPs, I generally see most people offering IPs at a rate of $3/mo, which I think is a decent price and industry standard
 
CasualHost said:
Many hosts give domains away for YEARLY plans, you could think about that as that ties down a customer for a year. Generally most people who have been around a lot would buy domains at different registars.

Try selling domains a little more expensive ( like 20 % ), so some clients who prefer to have everything in one control panel, would buy it from you rather than purchasing it cheaper elsewhere.

For IPs, I generally see most people offering IPs at a rate of $3/mo, which I think is a decent price and industry standard
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I've already rolled domain names into yearly plans. I'm realising that when the domain and the hosting account are separate in some cases the customer moves to a new host and asks me to point the domain to the new server.

I think offering the domain name as a bundled package might discourage some unwanted habits.
 
I have tried both, I started with cheap domain price, at that time my cost price for domain was $8.39, I sold domains for $8.95 considering it was not my primary business, I got many orders but due to low profits it become difficult to handle high support issues.

I decided to increase the prices to $15.95, I saw tremendous slow down of new orders, again I needed to change back to $11.99, so I will suggest for domains and addon keep small margins.

Regarding current clients, do not change prices, give them same price, changing pricing for your current clients will cause them to run.
 
webling said:
Is there any rule of thumb on markup when reselling IP's or domain names? I can resell both and am trying to gain a general idea. I have thought of doubling the dollar amount, but because my focus really is on web hosting and is where I make may money it may be best to do a smaller markup. I know on domain names even though I want to double the price I pay it would scare clients away. Also, any time I can roll things I resell into a web hosting plan seems like a smarter approach. Since I'm not a reseller in web hosting I can take a small loss on services I resell because I can still earn a fair amount on the space I offer.

As I look at other web hosting companies, it doesn't appear to me that there is any rule of thumb and many things I am seeing are unconventional. But I'm old school and I believe in charging a fair dollar for a fair effort. I did recently update one of my larger hosting plans and added more to it at no extra cost to my clients who have that plan. So I do believe in giving where I can, but also at the same time we all know our base cost and to hurt ourselves is just plain stupid.

So even though in some ways I am not a reseller and yet in other services I am a reseller I am trying to juggle things so that if I do sell things that I resell that are not rolled into a package I am trying to figure out if I should just offer them at cost or what percentage or amount I should tack on that is fair both to me and my clients.
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There is no rule of thumb when it comes to pricing. The key is to be market competitive and still turn a profit (hard and soft dollar).
 
webling said:
Is there any rule of thumb on markup when reselling IP's or domain names? I can resell both and am trying to gain a general idea. I have thought of doubling the dollar amount, but because my focus really is on web hosting and is where I make may money it may be best to do a smaller markup. I know on domain names even though I want to double the price I pay it would scare clients away. Also, any time I can roll things I resell into a web hosting plan seems like a smarter approach. Since I'm not a reseller in web hosting I can take a small loss on services I resell because I can still earn a fair amount on the space I offer.

As I look at other web hosting companies, it doesn't appear to me that there is any rule of thumb and many things I am seeing are unconventional. But I'm old school and I believe in charging a fair dollar for a fair effort. I did recently update one of my larger hosting plans and added more to it at no extra cost to my clients who have that plan. So I do believe in giving where I can, but also at the same time we all know our base cost and to hurt ourselves is just plain stupid.

So even though in some ways I am not a reseller and yet in other services I am a reseller I am trying to juggle things so that if I do sell things that I resell that are not rolled into a package I am trying to figure out if I should just offer them at cost or what percentage or amount I should tack on that is fair both to me and my clients.
Click to expand...

IPs i sell at £2 per month
Domain prices i look at what the main players charge (123-reg, godaddy, namecheap etc.) i then look at what i have to pay and see if i can match or better their prices. as domains are not my main business or income stream i only add 50p to £2 on what i pay, this keeps me in line with the main players
 
easyhostmedia said:
IPs i sell at £2 per month
Domain prices i look at what the main players charge (123-reg, godaddy, namecheap etc.) i then look at what i have to pay and see if i can match or better their prices. as domains are not my main business or income stream i only add 50p to £2 on what i pay, this keeps me in line with the main players
Click to expand...

Good call, always take a look at what other people are doing for extras.

Theres a fine line between charging to much and not making enough per sale to make it worth your time.
 
WHGBTom said:
Good call, always take a look at what other people are doing for extras.

Theres a fine line between charging to much and not making enough per sale to make it worth your time.
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9/10 people will either have their own domains ready to host or they stick to the big boys (namecheap, 123-reg etc.)

when it comes to hosting then it takes your time and effort in making sure servers are secure and running well and offer client support, but with domains once it is registered and added to the server then that is it as then the hosting support takes over.

so you dont need to make a massive profit on domains as you can make that up with hosting plans.

so even losing the first month of a hosting plan to cover the annual cost of a domain is worth it, i only give free domains with annual plans and i lock the domain so it cannot be moved , also in terms it states if a client wants to leave before the 12 months then they can as long as they pay the full domain cost and then it will be unlocked
 
+1 for the free domain with an annual hosting plan.

A trend I've seen in the past couple of years is new customers who bring domains they bought 'cheap' from one of the big providers (GoDaddy, for example, with their $2 domain promo) and then transfer to me when the more costly renewal comes up.

I just started incentivizing that behavior by offering discounted transfers. Will have to see if I lose any when their reasonable renewal comes up. ;^)
 
edigest said:
A trend I've seen in the past couple of years is new customers who bring domains they bought 'cheap' from one of the big providers (GoDaddy, for example, with their $2 domain promo) and then transfer to me when the more costly renewal comes up.
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I think we can all relate to that and i dare we all do it, I know even though i resell through resellerclub, i still look around for personal domains. list fasthosts at the moment has .co.uk domains for £1 for the 1st year
 
If you need the reseller package to host your personal web sites and some friends web sites then it gets easier to make a choice.

It becomes harder if you want to sell web hosting to make money or to host the web sites of your customers in case you have a web design studio. We will cover those two only because if you need it for non-profit use then making a mistake will not be such a big deal. If you use it to sell hosting it becomes different because problems with the hosting service and your reseller account will affect the business of other people and they may take legal action against you.
 
Domains are not going to make such an impact on income, and your not going to be able to compete with the big boys.
What it does however is offers convenience for customers to get everything in one place, and they are more likely to stay with you for longer. Hosting is the money maker, so need to make more incentives.

That's why we don't markup domains so much, and offer free domains for yearly hosting purchases.
 
There's no hard rule, but it's going to depend a lot on the product (shared hosting, VPS, dedicated, colo, etc. all have different "normal" ranges for margins.)

I heard a speaker at a conference say that by the time the average user checks out at Godaddy they've added 40% more $$ to their cart and all the last minute upsells are high margin. (He was some sort of former manager or product dev at Godaddy.)
 
zomgmike said:
There's no hard rule, but it's going to depend a lot on the product (shared hosting, VPS, dedicated, colo, etc. all have different "normal" ranges for margins.)

I heard a speaker at a conference say that by the time the average user checks out at Godaddy they've added 40% more $$ to their cart and all the last minute upsells are high margin. (He was some sort of former manager or product dev at Godaddy.)
Click to expand...

I still see some hosts upsell dedicated IPs to anyone wanting to purchase an SSL certificate
 
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