Considering New Pricing Model :: Need Some Feedback

[WorldTarget]

I have always maintained the lowest possible prices for all of the products on my small registrar website. This means I only make about 25 cents on each purchase, which makes the current monthly revenue average of just over $100 look pretty good. I have never tested out any other pricing models, but just imagine if I only raised all the prices by $1 and maintained the same customer loyalty. Do the math.

$100 rev. per mo / .25 est. profit per tran. = 400 purch. per mo
therefore with a $1 raise in prices I should expect
$500 rev. per mo / $1.25 est. profit per tran. = 400 purch. per mo

At first it appears as a no brainer. But since domain registration pricing is so competitive I am afraid that if I raise all prices by $1 I would risk losing several new customers that I could have converted into longterm buyers. Also, I might have several current customers abandon ship.

Should I try it for a month and see what happens? Thanks ahead of time for any comments.

 

[David G]

I would say to experiment with a higher price for a few weeks to see the effects. Since you get so many orders you can quickly tell if business declines or not.

I think it's real good you manage to get that much (400 transactions a month) business in view of the very heavy competition from all the big players. Your site must have lots of traffic. Can you share your secret to both generating so much traffic to your registrar site and selling so many registrations for a small registrar site? What is the url?

 

[WorldTarget]

You know what, I am fallable. I got the numbers mixed up. I forgot that I offer several other products besides domains, like email, host, etc... The profits on each sell actually fluctuate between the different offerings. Where I was looking at several of those 25 cent profits I ignored the fact that some products profit are 65 cents, 45 cents, etc... I just quickly looked at that $100 that I was bringing in every month and had assumed those 25 cent profits I see all the time. So I did fuzzy math dividing .25 into 100 to come up with 400. I am surprised I did not find that number to be suspicious, it was only after you pointed it out that I realized my dumb mistake. I just had domains on the head.

But yeah, with all that said, I think I am going to try a different pricing model for about two weeks to see how it goes.