Web Hosting Talk : Web Hosting Main Forums : Domain Names : Domain Name Tutorials : Domain Pricing and Markup

[collinsj]

This short tutorial will give you some insight on how to set your domain pricing structure for your business. For the sake of this tutorial, let's say that the scenario is as follows:

You have obtained a domain reseller account from a trusted registrar, such as Enom, Net Earth One, or some other reseller account. After fine tuning your settings and configuring the defaults that best suite your needs, you will eventually stumble across the task of setting your product pricing. Now, as a reseller, you will be given a pricing structure for your domains.

When looking at the pricing structure, you will most likely be given a Base price set by the registrar. For example, if a .COM domain registration for 1 Year costs you $8.37, then the $8.37 is the Base price. When you list your prices on your website, it is most likely that you will want to add a markup value to each of your domain's base price so that you can make a profit. Markup is defined by Google as: The amount added to the cost price of goods to cover overhead and profit. The markup value is normally expressed as a percentage, and is calculated in with the base price of the domain.

Here is an example:

.COM Registration 1yr - $8.37 base
You want to make a 15% profit on every .COM domain sold.

To configure the retail price, you would do the math as follows:

(base x markup) + base = retail

The markup is always expressed as a percentage in the form of a decimal.

15% = .15

So, in our example
($8.37 x .15) + $8.37 = $9.63

Your total profit from this sale would come out to:
$9.63 - $8.37 = $1.26 or 15%.

Always check your answers!

$1.26 / $8.37 = 0.15053


This can get a little tricky when figuring a dozen domain names, plus multiple renewal periods, and keeping track of everything. In an attempt to make things a bit easier, I created a spreadsheet that will do everything for you. It is not anything fancy or professional-looking, but it works. There are two main tables, one lists the Base pricing for your domains for Years 1-5. The other table lists the Retail price for your domains after adding the Markup percentage, and will do this for Years 1-5 as well.

You are welcome to download it and give it a try. I would appreciate any feedback as to whether or not the functionality of the spreadsheet was useful to you. I only spent 15-20 minutes creating it, but it seems to work fine. This will hopefully make the process of adding the markup value to your domains a bit easier!

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In the spreadsheet, edit the blue columns under Year 1 and set the base price listed on your domain registrar for the first year of registration. This will update all of the prices across the spreadsheet. Then, enter the percentage of markup that you want to add to the base price. I have converted it to decimal form within the equation, so you should enter the percentage form without the decimal. Eg: 15% enter as 15

[collinsj]

It seems that I have uploaded the wrong spreadsheet...how embarrassing

The spreadsheet that I have uploaded is not entirely complete, as the last few columns haven't been assigned their functions.

You can download the COMPLETE spreadsheet below! Sorry guys!

[Techy]

I appreciate you adding content to the Domain Tutorials section, but anyone who did not know this should never be allowed to have their own business or in fact make money.

No one should need a tutorial to say what a base price, mark up price, and that percentages are represented as decimal figures... I hope I am not alone on this thought. I am the "no" vote.

[collinsj]

Originally Posted by Techy

I appreciate you adding content to the Domain Tutorials section, but anyone who did not know this should never be allowed to have their own business or in fact make money.

No one should need a tutorial to say what a base price, mark up price, and that percentages are represented as decimal figures... I hope I am not alone on this thought. I am the "no" vote.

I do agree with you that anyone running a business should be more than familiar with these terms, but there will always be someone who doesn't know such things and may find the information valuable. That's why there is a tutorials section, so people can learn new things, no matter the skill set of the subject being learned

[keyvanzandi]

I do agree with you that anyone running a business should be more than familiar with these terms

[Vinayak_Sharma]

Where are the expenses in that calculation?

[stub]

There is a deep flaw in your calculation. Everyone understands markup as a percentage of retail, not base. 1.26 / 9.63 not 1.26 / 8.37. You will never get a return on sales of 15% using your method of marking up domains. The calculation should be 8.37 / 0.85 = 9.85 (check 9.85 - 8.37 x 100 / 9.85 = 15%)