Name.com has always been a close knit family. Even as we expanded last year we’d kept a very family oriented approach to business. We eat together, we play together, we take care of each other. This week our family is smaller as a result of cuts we’ve been forced to make.
As I sat with the individuals who cared for our customers, who made sure our services were the best they can be, I thought about some of the questions I get asked every day:
1. Why do you charge $8.99 for a domain?
2. Why did you raise your price from $5.99?
3. Can you match $6.99 that Registrar X is offering?
4. Can I have a discount code?
Let’s discuss domain economics for a minute:
Every business has a margin. The margins in the domain industry are often razor thin. The cost of a .com name is $7.06 at the moment. In a world where retail margins are often 200%, we eek by with a 21% margin (before credit card processing fees). Out of the 21% we pay payroll & various HR costs, rent, accreditation fees, credit card fees, utilities, technology costs, communications costs, taxes, and various other operating expenses. 18 – 20% is what many of the companies I’ve worked for could expect to put in their profit column.
We began cost cutting measures in October, first with little things like the couple hundred bucks we spent to bring in a chair massage session twice a month, then with some big changes which would save us money like a change in some of our service providers. It wasn’t enough. We had to let go of some very dedicated and very talented folks.
We’re confident that we’ve done the right thing for the health of the company but we’re sad to see members of our family off on their own during this tough economic time. As we move into what is likely to be one of the hardest economic periods our company is likely to encounter we’re hopeful for the future while we keep a keen eye on the bottom line.
We’re not going anywhere. We’re in it for the long haul, but we’re all about letting you know what’s happening behind the orange facade of Name.com.
We wish our recently departed family members the very best and hope they will find a new work home that will treat them better than ever.