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Hosting Thoughts & Reflections

Hosting Thoughts & Reflections

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Don’t Get Caught Out With Dodgy Pricing Tactics

8th November 2017 by Michele 2 Comments

businessman with sunglasses with dollar signs

Fiscal prudence is something that most business owners learn fairly quickly. Either you learn to spend (and invest) your money wisely or you will fail. It’s that simple.

However spending money wisely does not always equate with paying the lowest price. Of course you want to get the best price, but you need to look at the total cost of ownership. And sometimes that means that you pay a little bit more in order to get a better level of service.

If you can get a pair of jeans for €10 but they fall apart in 2 or 3 months then it probably makes more sense to buy better quality jeans. Personally I tend to buy a lot of my clothes in a local shop where the staff know my name and treat my like a valuable customer. I might be paying a little bit more for shirts and trousers, but I’ve never had any problems with anything I’ve bought there in over 10 years.

When it comes to online services like hosting and domain names there isn’t much difference between one provider and another on the surface. Domains and hosting for small business at this stage are fairly commoditised. But if you can’t get customer service when things are going wrong then those few cents you saved probably cost you a lot more. As the old saying goes, “pennywise, pound foolish”.

You need to dig around a bit more to really get to understand what makes one provider better than another. And of course the results of that digging will be quite subjective..

What are other people saying about their services? Have you found both positive and negative reviews of the service? Nobody is ever going to be able to satisfy everyone, so no matter who you look at you’ll always find a mix of reviews. (Of course if they’re mostly negative then that’s probably an indication of the overall service you’re likely to find.)

When it comes to pricing, however, it should be clear not only what you are paying to signup, but what you pay to renew.

It’s common to offer clients deep discounts to signup for a service. We all do it.

However companies need to be transparent about their pricing, so you can easily see what you’ll pay for year 2 and beyond.

Take a .com registration as an example.

If you go out and look you’ll find prices for 1st year registration varying from €0 (when bought with other services) to in the region of €30. The wholesale price for a .com registration for an ICANN accredited registrar is $7.85 plus $0.18 ICANN fee, for a total of $8.03, which is about €6.92. So if anyone sells a .com registration for below €7 it’s either a loss leader or part of some kind of promotion or bundle. That price is NOT real and is unlikely to be maintained on renewal.

But some companies are touting their first year discount prices without disclosing the renewal fees. So that 99c .com domain name is renewing at €15 or more..

Should you buy the domain for 99c? Maybe, maybe not, but be sure you know how much you’ll end up paying at renewal time!

 

Filed Under: business Tagged With: business, domains, hosting, investment, money, service

Michele Neylon is the founder and managing director of Ireland’s largest registrar and hosting provider Blacknight.
Michele is an active and often outspoken member of the Internet industry both in his native Ireland and internationally.
He is actively involved in Internet policy development, and has served as a member of ICANN’s GNSO Council as a representative of domain registrars. He is also involved with policy development for several domain registries, including .IE, .EU and .US. He previously served as chair of i2Coalition and is a member of the Names and Numbers Steering committee of eco. Michele received the Irish Internet Association Net Visionary Award in 2013 and was named one of Ireland’s 30 Technology Disruptors at The Spiders Awards in 2019.

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