I own a hosting company, like many of us here at WHT do. I have searched and searched the net for sites to compare my plans too and I must say...... how do HALF of the host on the net stay in business with some of the plans they offer ???????/


Like I found this one site.....
100mb's of space, 3gb's of bandwidth, 10 features (mysql, ect..) for $12.95 a month, and there connection wasnt all that impressive?

can someone please explain this to me????

(I didnt name any names so hopefully this post wont get deleted.. it is a legit question)

Cant comment on their connectionbut I suppose its what they want to make out it.

Taking a completly hypothetical view:

A server with 80Gb Drive and 500GB BW, cost around $150.00

at 100mb space and 3gb Bandwidth that would equal:

80 accounts at 12.95 which would equal $1036 or about there without calculator.

That would use all space but not bandwidth, of course these figures are wildy written as an example. We all know that you dont neccessarily fill a server with 1 package and nothing else.

Again, it all depends what a host wants out of it and what his/her costs are

Combine server/licencing/tech fees and then look if 1$ hosting companyes can cover that. Now you might know why many cheap hosts go out of business really quick :)

but what im asking is, HOW ... I mean some of these companies ive seen claim to have been in business for like 1-2-3-4 years now. and I could show ANY of there clients plans with double or tripple the resouces they are being given and probably better support that has been open just as many years.

It boggles my mind =(

OH! and just one other thing, check my site.

(NOTE: not advertising or spamming)

If you think that is cheap check my site below, through proper server/package management (recently moved to dedicated) I now have 3 servers on my pricing structure and I make good profit, my connections are excellent and I dont oversell for anyone.

Overselling is actually a smart thing to do, but you just have to be careful not to oversell too much. Chances are, not many are going to use their full allocation of bandwidth and space.

When they do, you have to go buy more bandwidth and space.

im also not advertising but check out my site... www.idlehosting.com ..... I mean I hadnt been in business long, but we are stable, I dont plan on going anywhere ;), and I think we have some damn good prices and I have a little support team ;) so you can always get help when you need it. Im not advertising im just saying look at our plans and service, and yours... and then go to another site ( I cant name names sorry :() and compare.... itll blow your mind ;)

They have a better marketing and sales plan. $20/month is nothing to pay for a hosting plan. I pay that for a large pizza with the works that's gone in 10 minutes.

When you set your prices, I hope you pay yourself a decent wage like $15-20 per hour for all hours worked after expenses, taxes, etc. All hours worked include answering support/sales questions, bill processing, site design and redesign, planning, etc.

Originally posted by mpalamar
They have a better marketing and sales plan. $20/month is nothing to pay for a hosting plan. I pay that for a large pizza with the works that's gone in 10 minutes.

When you set your prices, I hope you pay yourself a decent wage like $15-20 per hour for all hours worked after expenses, taxes, etc. All hours worked include answering support/sales questions, bill processing, site design and redesign, planning, etc.

Would not agree totally. A good marketing and sales plan does not mean $$$$.

the cost you put on yourself can be $5 an hour if that what you want to work for and still provide as good a service to all your customers.

if your knowledge is good the site design redesign etc... can be your own doing.

I am not disagreeing totally, there are many arguments for and against this, I built up a strong following after 3 years with little little more than myself running things and I am still here. Okay I have a couple of staff now but still.....!!

$20 maybe a pizza but look at the way the market is going $20 is a lot now to many new customers.

I think you have to look at it from a business point of view. Most businesses want to put their site on the internet to expose their business to new customers, and make it available 24 hours a day. Essentially, they are opening up a new store. $20 a month for that kind of exposure is really nothing compared to the amount of rent.

That may sound like a stupid comparison to make, but in all reality it's not. I've even had clients tell me that very same thing. That $12.95 package you mentioned isn't that much when you think about it either.

What is the first place a business looks for when they want to have a website? They go to their ISP. Most local ISP's charge double the average hosting company, so it's not really that much money.

Originally posted by L Wisener
the cost you put on yourself can be $5 an hour if that what you want to work for

You, my friend, can work for $5 an hour if you want to but I have a wife and child to feed. I can't afford to work for $5 an hour.

You have to remember that most people still own businesses to make a profit. I realize that is a novel concept to a lot of Internet related business but happy customers do not feed my family. A profit does.

Originally posted by SpecPC
I mean I hadnt been in business long, but we are stable, I dont plan on going anywhere. It boggles my mind =(

Billy you have been in business for about 6 weeks. Give it a couple of months and it won't boggle your mind so much anymore.

You may not PLAN on going anywhere but.... ;)

Point taken, but as I say your choice is your own. I personally dont work for $5 an hour far from it but that still does not change the base point, there are many that will.

Happy customers dont keep you in a profit no! but happy customers keep us all in business becuase they stay with you, again in the current climate its getting to the stage where there are too many hosts, too few customers.

Personally if your customers only represent profit then I dont think its the attitude to have nowadays, but thats my opinion to which I am entitled.

You're just under the impression that people want to pay next to nothing for web hosting, when the case is often the opposite.

Business owners understand the realities of paying money for service and stability.

This web host you've decided to point out may be looking at a different demographic than you, and working out their rates accordingly. Not everyone wants, needs, or is looking for teenage WHT posters. We're fairly competitive, but only recieve a trickle of signups from this place, and would be floating belly-up by now if it was a main focus.

Finally.. you guys posting with "I'm not advertising but...", you are, so please stop linking to your sites in your posts...

Originally posted by L Wisener
Happy customers dont keep you in a profit no! but happy customers keep us all in business becuase they stay with you.

Personally if your customers only represent profit then I dont think its the attitude to have nowadays, but thats my opinion to which I am entitled.

If I had 2000 extremely happy customers and no profit I'ld put up a sign on the website saying that we were going out of business on July 1st.

Just wondering, besides profit what do customers represent?

I can see in my previous post where I could be misunderstood. I care a great deal that my customers are satidfied with the service that they receive. I am willing to bend over backwards to see that they are taken care of.

However, I do not run a charity. I run a business. I think that some people get the two confused. I am not saying that you do. But many people around here do. What else do you call it when you are giving you services away at such a price that you can not possibly make a living from it but you justify it by saying you have "happy customers"?

Originally posted by BisonSt
I can see in my previous post where I could be misunderstood. I care a great deal that my customers are satidfied with the service that they receive. I am willing to bend over backwards to see that they are taken care of.


I though it was a misunderstanding but however, none of us run a charity, we all price according to what we want to make from it.

I make a perfectly good living from my pricing as I am sure you do. We both agree that you must have a balance.

Originally posted by akashik
Finally.. you guys posting with "I'm not advertising but...", you are, so please stop linking to your sites in your posts...

Emm excuse me, but I only pointed out what is already at the bottom of my posts (website address)

Oh you have your site address there too!!!

Originally posted by L Wisener

I make a perfectly good living from my pricing.

You have one Rackshack server so I assume that you mean you will make a good living once you have around 10 by multiplying your current profit times ten?

The problem is that it does not work that way. I once thought the same thing. Low cost pricing works wonders when you only have < 100 customers.

But I can assure you that when you have 10 servers and 1000+ customers who host 5000+ websites on your servers that you will have to hire real people that do not work for less then $25 an hour. Not to mention other cost (oh praise the day when you are invited to the tax office for a "chat")

And forgot even about getting decent tech support for sub $ 50 /hr

Shouldn't this be in "Running a Hosting Biz" forum instead?

The bigger you are the cheaper you can provide plans for -- making a deal with your DC helps. However, I've found that the bigger you are the better you can get away with charging more. :D It's the new hosts that charge pennies for something huge.

Originally posted by Pilgrim
You have one Rackshack server so I assume that you mean you will make a good living once you have around 10 by multiplying your current profit times ten?

The problem is that it does not work that way. I once thought the same thing. Low cost pricing works wonders when you only have < 100 customers.

But I can assure you that when you have 10 servers and 1000+ customers who host 5000+ websites on your servers that you will have to hire real people that do not work for less then $25 an hour. Not to mention other cost (oh praise the day when you are invited to the tax office for a "chat")

And forgot even about getting decent tech support for sub $ 50 /hr

1 Rackshack, 2 dedicated now servers.

Tech has 5 year linux experience and worked for major US government body.

>100 customers

Thank you

Well, the thread starter offers unlimited domains and 10gb transfer for $7.95/mo. With plans like that, he will soon be thinking how he went out of business so quickly.

People seem to think that you can just load as many domains as you want on a server. Imagine 30 clients putting on 30 domains each? Looking at almost a thousand domains for about $240/mo turnover. Pretty sure the server would be full then (unless it was a dual xeon) and if the server cost $150/mo that doesn't leave a lot for software licences, your own wages - let alone paying someone else. Plus he's targetting mysql loving gamers so that means less domain on a server. Even with 50 clients averaging $10/mo on a full server, that is not enough to substain a hosting company. A server has to pull in at least a grand in my opinion or you are going nowhere and getting there fast.

I am not trying to bash your company. I sure as hell do not fill three servers in just a few weeks and it seems like I could learn a thing or two in marketing from you.

If you also manage to make a decent living with these three servers for two people then I DEFINATLY have a few things to learn from you about that.

But with the plans that you put down on your site I remain very sceptical that last issue. Unless you find a cardboard box at grand central station a decent living :D

Anyway, I'll keep an eye on your future developments and we'll see in about six months time.

For now I'm going to bed to enjoy 3 hours of well deserved sleep ;)

Originally posted by Pilgrim
Billy you have been in business for about 6 weeks. Give it a couple of months and it won't boggle your mind so much anymore.

You may not PLAN on going anywhere but.... ;)

how did you know my name? HAHA and I dont entirely understand how it wont boggle my mind, can you clarifiy??


but yeah I get what all of you are saying, but you arent really answering my question (well one of you did kind of) .. I just dont see how someone would/could pass up a better offer for an plan that has less and cost more...

I guess what this post is about is that all though I do have some customers, I seem to be having a problem making sales to people. I dunno maybe im just thinking about it to much heheh.....

Originally posted by SpecPC
how did you know my name? HAHA and I dont entirely understand how it wont boggle my mind, can you clarifiy??


but yeah I get what all of you are saying, but you arent really answering my question (well one of you did kind of) .. I just dont see how someone would/could pass up a better offer for an plan that has less and cost more...

I guess what this post is about is that all though I do have some customers, I seem to be having a problem making sales to people. I dunno maybe im just thinking about it to much heheh.....

He probably saw your email address on your pre-owned account sale.
I think if you look at history you will see that a whole lot more hosts offering cheap prices for hosting go out of business than the ones who charge more realistic prices.

Originally posted by SpecPC
I just dont see how someone would/could pass up a better offer for an plan that has less and cost more...

Ah, you are wondering why people are signing up for a plan that costs them $20 / month while they could get the same from you at $ 8?

A lot of it has to do with trust. You have to inspire trust.

Why do people host their sites with Verio? Not just because of the quality but also because they know it is a real company, that their site will be up most of the time AND Verio will still be here a few years from now.

Especially that last point is the big questionmark with hosts these days.

How to get trust? The cheap way is to give good support to the customers you already have so they'll not only have you host their other sites as well but also recommend you to their friends who are with a host that sucks :)

The expensive way is namebranding. Noticed the banners on this forum. For instance dot5hosting. You see that banner a lot. If people see your name a lot and on different pages they visit they get this idea that your company is probably large (and large inspires trust) and sign up with you.

In total we have 3 servers, 1 is directly to Wise1host and yes I have filled them in a short time my marketing is very astute.

2 servers belonged to my tech who was not so interested in hosting as a rule but wanted to keep his hand in, So I now have these customers which in turn provides a greater income for me and of course him as he continues the management of the servers.

My first server was filled quickly with existing customers and new, I had resellers with Dathorn and United hosting to name a couple but never transferred anything to them as decided to go dedicated with my exsiting customers.

The real reason for wise1host.com going dedicated was a nice government contract to supply hosting to 52 schools in the UK for their web sites and now with a major Mortgage company in the UK as well

I could go on but I wont.

Dont get me wrong I see your point we moved fast to dedicated then on to 3 servers quickly but we did it and we have the business to fill them, the knowledge to manage them and now we have the contacts to grow.

Originally posted by blue27
He probably saw your email address on your pre-owned account sale.

Actually the first thing I did was check the whois to see how long you had been in business. That is where I found your name ;)

I used to offer cheap hosting plans only to get started and with the name switch of my company from Frozenbell (which let me tell you does not work for a good hosting company name :laugh:) to Global Professional Network. Now I offer highly "expensive" (quoted since many offer about 10 times cheaper) hosting but I can make out my profits to pay for more features, staff, support and so forth. Sure, I may not get as many customers as people overselling space like $5/month for 20 GB Bandwidth, but heck I must be doing something right to still be here for almost 3 years and still maintain a nice profit margin. I think one should also take into consideration what the company is actually trying to do for the customers with the profit they are making. I see some hosts, like UH-Matt who take care and time in hiring staff members and creating their own skins for Ensim so the features availble for the customers to use will be easier. I also see many who just take the money, provide bad support and dissapear without a trace.

This is a weird twist. Usually it's the people selling 10GB of space and 50GB of bandwidth for $3.99 that people post about, wondering how they're staying in business.

You don't necessarily get more customers by having lower prices. Although you will need more customers to make as much money.

Pilgram, your words are for the ages my friend. Have you been in the business a while or something ;)

but not just him everyone... Im slowly understanding it, it isnt the fact that I have good prices. sales come with experience, and time. Currently, I base my plans around my bandwidth. 75cent for every gb of bandwidth, Of which I only get 25cent profit from. DO you think I should put my prices up or if im confortable with what I have now keep it?

Originally posted by SpecPC
Pilgram, your words are for the ages my friend. Have you been in the business a while or something ;)

but not just him everyone... Im slowly understanding it, it isnt the fact that I have good prices. sales come with experience, and time. Currently, I base my plans around my bandwidth. 75cent for every gb of bandwidth, Of which I only get 25cent profit from. DO you think I should put my prices up or if im confortable with what I have now keep it?

If you feel you are making a reasonable profit stay with it.
Prices should not be arbitrarily (?sp) set. Like any other business you base you prices on your costs of operation. You should look to the future and determine if your cost will sustain you when you need to start adding support staff.

Originally posted by blue27
If you feel you are making a reasonable profit stay with it.
Prices should not be arbitrarily (?sp) set. Like any other business you base you prices on your costs of operation. You should look to the future and determine if your cost will sustain you when you need to start adding support staff.

I concur. And I just will add that you should not look at bandwidth alone. Just because your server comes with 700 GB bandwidth does NOT mean you can use it all and expect your server to run happily ever after.

It's just a computer.

If I have a 1000 sites on a server using 100gb transfer, that does not mean I can load 5000 sites on it to use a 500gb allowance. ;)

We are not the cheapest host here, however we still get flooded daily with new signups. We have a high retention rate, it's about the quality of service you offer.

The problem is, "Joe" want's to start of his business. Joe has high pricing compared to other hosts. After 1 month Joe sees that his customer signup rates are low. Joe decides to get with the bottom dippers and offering something that is insanley stupid. Joe is happy because he receives 10 accounts that pay for his $35 reseller plan. Joe then sees that he is using all his bandwidth/space and needs to upgrade. Joe upgrades his plan and is making a loss again. Now when Joe has 2000 customers sure, he might be making $1000/USD month but just remember with 1000 customers your going to see quite a few tickets. You will need to hire someone.

Sure I don't live like a king (yet ;)) but I wan't to ensure that Myacen will be viable for a long time. I am not in it to make a quick buck, I am in it for the long haul. We now have cash reserves that will last us for quite some time should their be a downturn in the industry.

Originally posted by Myacen
We are not the cheapest host here, however we still get flooded daily with new signups. We have a high retention rate, it's about the quality of service you offer.

The problem is, "Joe" want's to start of his business. Joe has high pricing compared to other hosts. After 1 month Joe sees that his customer signup rates are low. Joe decides to get with the bottom dippers and offering something that is insanley stupid. Joe is happy because he receives 10 accounts that pay for his $35 reseller plan. Joe then sees that he is using all his bandwidth/space and needs to upgrade. Joe upgrades his plan and is making a loss again. Now when Joe has 2000 customers sure, he might be making $1000/USD month but just remember with 1000 customers your going to see quite a few tickets. You will need to hire someone.

Sure I don't live like a king (yet ;)) but I wan't to ensure that Myacen will be viable for a long time. I am not in it to make a quick buck, I am in it for the long haul. We now have cash reserves that will last us for quite some time should their be a downturn in the industry.
Preach on :angel:
I couldn't agree more with you there. You just sumed up my entire thought process for this subject :laugh:

It's all in quality, not quantity. If you start things out and slowly grow (and I do stress slowly), while providing good service and support, all in time your company will grow to a company just like Myacen, as he said they may not be the cheapest host, but if you offer quality and people hear about it from your current clients, you will get the clients, it may just take time.

So basicly what you are saying, it isnt that host are being HIGH, they are working with what they got..... right?

Those companys that offer like 5GB Space and 50GB Bandwidth for like $5.00 a month get me made but so do the people like 75mb space and 750mb bandwidth for $10.00 a month i just think that is to much. I say good plans have to depend on how much your paying for your server. Basically I would want to get around double what I pay a month for my server so if I paid about $200.00 a month for my server I would work it out into nice plans and figure out how to make a extra $200.00 profit :)

Just my 2 cents

well that really just depends on the resources your server has (hard drive size, bandwidth, blahblahblah).........

To answer the question how do host that charge more get customers when they could get it cheaper.

Allot of those customers have been down the cheap host road and been sold lost their data seen the host that started out great turn into a nightmare of overloaded servers and bad service. They are what I like to call educated clients they know that for a hosting company to stay in business it has to make a profit, they care about their websites and are ready for a long term host that they feel will be around a while.

While there may be tons of low priced host out there to choose from they know that good ones are hard to find and they are tried of moving from host to host so when they find a good one they stick with it.
Some host that charge more also have a pretty high retention rate and from that comes good word of mouth advertising which leads to more signups and on it goes.

Plus occasionally we get to buy lower cost host out as they go out of business. ;)