What kinds of prices should you set for the domain names you’re selling? Take a look at how different prices, and how you list them, influence a buyer.
Domain resellers are faced with many business-based decisions. You have to create a credible website, grow your client base and set competitive prices for your product. Although you may have limited experience with some of these, Resell.biz provides you with the resources you need to take your business to the next level.
Pricing is one of the key aspects to building a profitable domain reseller business. Some domain names are worth millions, while others are worth almost nothing. It’s difficult to strike gold with a multi-million dollar domain name, but you can consistently sell domain names for profit.
There are thousands of domain name resellers around the world, and pricing is one of the largest reasons a customer will choose one domain name reseller over another. With that said, it’s not always best practice just to lower prices. Instead, use the following psychological pricing methods in order to return a profit without sacrificing credibility.
Charm Pricing – Research shows that using charm pricing (prices that end in 9, .99, or .95) really does influence a buyer. The reason for this isn’t really because of the nine, but rather lowering the number to the left of the decimal point. Our brains process the first number we see, meaning that the lower the number, the more likely we will see it as a low price.
$9.99 for a domain name is much more appealing than $10.00.
Reducing the price by one cent only produces positive results if the change drops the number on the left by one – $3.76 isn’t going to make a difference from $3.77.
The results speak for themselves; conversion rates are higher when charm pricing is used.
Know What You Have – As we mentioned previously not all domain names are worth the same. A generic .com, .org or .net domain name will usually sell for around $12.00 a year. This of course can be much higher, especially if the domain name contains a popular word such as cars.com or apartments.com. However, the majority won’t cost much more than the average.
New gTLDs will usually cost a little more. Domain name endings such as .xyz or .club have proven to be successful, but will usually sell at a higher price (these two endings are around $15.00 a year). Although new gTLDs may be more expensive to buy, you can sell them for a higher price. Instead of having to include hyphens or too many words in a .com domain name, clients can simply purchase the domain they want with a corresponding gTLD.
The key here is to know what you have. If you are selling a .com domain name that is highly desirable, raise the price! On the other hand, if it’s a less desirable domain name, such as a lengthy brand name, don’t expect to make a huge profit from the sale.
Do the necessary research to know the average sale prices of domain names. Be familiar with the new gTLDs to know how much each one is worth. Overpricing will instantly drive potential customers away, while underpricing won’t make you any money. Strike a balance.
Effective Website Content – Using the appropriate language influences customers. If the content on your landing page seems odd and unrelated to what you’re selling, it will drive your once-interested customers away.
When you include content near a price, avoid using words such as “high” or “maximum”. Instead, try using words that will make the price seem low.
$9.99 ‘no maintenance required!’ – good
$9.99 ‘high performance!’ – not good
This applies mainly to the content that corresponds directly with the price; avoid using words that make the price seem higher than it is. Instead, soften up the customer by using content that will make them want to click that ‘purchase now’ button.
Bundling – Including more bang for the buck yields results. A customer will almost always be willing to pay more initially in order to receive more in the long run.
In order to have a manageable website a client needs a web developer, web hosting, a domain name and SEO basic principles. As a domain reseller, you can bundle some of these services together. You can start by becoming a web hosting reseller. This may require you partnering with someone else or learning new skills, but the payoff is generally worth it.
One-time customers turn into lifelong clients when they can rely on a bundled package that you offer.
There are many other pricing strategies that you can use to improve the number of conversions you have. Explore these strategies and find what works best for your domain reseller business.
Let us know what pricing strategies have worked for you! Comment below or send us a Tweet @Resellbiz.