The power of cheap

What sells?

Why sex, of course, sex sells.

And free. … Free sells big-time.

But if you aren’t selling sex or free, what can you sell instead?

Cheap … cheap sells.

That lesson is being driven home yet again by a Phoenix Web hosting company called iPowerWeb, according to Ipwalk, an outfit that pumps out statistics about the Internet. In November iPowerWeb reduced its fee for a domain name registration from $8.25 to $2.95, which Ipwalk says is the cheapest on this planet.

However, $2.95 is so cheap it’s only about half of what it costs iPowerWeb to register the name for its customers, meaning the rock-bottom deal isn’t necessarily doing a lot for the company’s bottom line.

Or is it? A Web hoster that had been registering fewer than 2,000 names a month is now doing more than 20,000 in a market that is only getting hotter, says Ipwalk: “At their current growth rate, iPowerWeb would need to up sell roughly 4.5% of their new domain names to one-year hosting packages to balance their costs. iPowerWeb will also earn back money when customers renew their domain names after one year, since the low price is only valid for the first year. Many customers may not be aware that the renewal price is $8.25.”

That catch is in the fine print, which isn’t all that hard to find and read considering the temptation to bury such a caveat six pages deep. That iPowerWeb didn’t do so might indicate an interest in maintaining long-term customer relationships.

After all, cheap can grow old awfully fast (as can free).