It seems to me that everyday now there is another host who can provide the unlimited everything. Now it just seems to me everyone knows about the unlimited scam it's the $2.95/month 10gb transfer stuff thats ruining the industry.

I know this has been probably asked so much before but how can these people do this? How can they make money too?

I have just started off a wehosting business and frankly it looks like the market is way too saturated. People dont seem to wanna pay that little bit more for somthing thats just that bit better?

We have three different servers that we can put clients on, they are on good networks with quality bandwidth. This reason alone is why i can't charge $2.95/month and give them 10gb bandwidth. It costs us upto $5/gb.

I know we have only just opened (today literally) but what can i do to grab a few customers?

Nobody wants to pay a fair price for somthing that is good quality with top support etc. It seems that i just can't compete with these undercutters who constantly drop prices and im sure must be working below cost and losing money.

Perhaps i really shouldn't have entered the hosting business?

Any opinions gratefully received.

Have a good day

Terry Jacobs

I assume your servers are located in the UK ... That itself will make you hard to compete with most hosts here in US ... You said you paid $5/GB for your bandwith? It's probably average in UK, but you can get as low as $1/GB on a good network here in US, and of course with cogent (which is not in UK, btw) you can get even lower (Note: when speaking of cogent, I don't mean low quality bandwith). Personally, I would think it would be hard for you to compete for US market if you have your servers in UK.

Most hosts that offer $2.95/mo for 10GB is either thinking they are able to offer this due to the law of average (which is not good at all) or they are getting a super deal at rackshack with 300GB for $99/mo. At any rate, these hosts do not think their time worth any money and nowonder why we see a lot of small hosts closing its business just few months after they founded it ...

But the problem with you not being able (or find it hard) to compete for US market has nothing to do with host offering un-sensible price. It has a lot to do with how much you paid for your bandwith.

Cheers,
:beer:

For our collocation we pay $2 a GB and don't mind a bit. We know that it's quality so we don't mind paying. Yes we can go with someone like Cogent and pay less than $0.50 a GB but we know the same quality just isn't there. My favourate saying - "You get what you pay for"

why do people keep saying cogent is bad? Have you tried it? What complaints have you heard about them (network failure, etc)?

As about "you get what you pay for", I agree with you ... Isn't that's the reason we are all paying $$$ for our M$ software??? :D

cheers,
:beer:

What complaints have you heard about them (network failure, etc)?
I follow that thread "I am thinking of getting a 100MBPS line from Cogent" very closely. I have leart that cogent is okay however in terms of quality it is better to go with someone else because Cogent is Tier 2

Personally I wouldn't worry about the $2.95 for everything hosts. What you need to look at is the compitition in your own country, and then figure out how to market for it. People like to buy within their own country, if they can. So, what is your advantage over the other compitition? Are your servers located in the UK? If they are, use it to your advantage. Promote that you are a UK company with all of your equiptment in the UK. Granted some people will go were ever they can get the best deal, but others want that comfort that your company is operating in the or near the same time zone as them, not to mention keeping their money in their country. I looked at your plans I didn't think they seemed to out of line for what little I know about the UK market.

Hell, if I could find a good host in South Carolina I might go with them.

More than my 2 cents, but good luck.

Businesses always take time to build. When you start out in the 'goldmine' of hosting the first thing you'll notice is all the gold seems to have stolen by someone else :D

Suddenly you're tempted to drop prices, and offer huge plans.. welcome to the world of becoming roadkill.

The best thing to do is build a business plan that is profitable, then stick to your guns. Hosting clients come in a huge range of levels. Some will only want $2 - unlimited accounts, other will only want $50 a month with low specs.

Do a lot of research on companies you find to have good reputations and become one of them, pricing accordingly. We dropped out own pricing a month or two ago, but that was due to volume rather than any need to match the bottom dwellers.

Sensible pricing won't get you the masses of signups you hoped for, but at the end o the day, you'll still be there doing business and collecting clients from bombed hosting co's who thought they could do it on the cheap :)

Greg Moore

Where are your servers located? $5 per Gb is a little high, even by UK standards. I have had quotes of around $2.50 per Gb for servers in Redbus, London.

But seperate yourself from these hosts offering everything at $2.95 per month. Underline your solid network, and excellent customer support, and you will be more likely to attract "business customers", who are looking for a secure home for their site....

Good Luck
Matt

well our servers are located in the USA. So we would be paying by those costs. I just don't know how to get the word round without having to sink $1000's into advertising.

I had a good business plan but a good business plan is no use when you have no advertising funds and as a starter with nobody to give us a good name im not sure what to do.


any advice is grateful,


Thanks

Well I started just like you. Nothing but a website. What you should do is get the list of host directories on yahoo and list yourself on all of them. That is all I did to start. Then I started doing other things but that is one of the best things to do.

Hi,

ok, assume that you have all your bandwith for free, nada - nothing. What plans could you give away for that? You still have to pay for, servers, rent, support, advertising etc. So bandwidth is just a part of the "big picture". Never mind the $1.99 a month unlimited everything guys, they will not be here a year from now. Offer your clients that only you can offer them, service or whatever.

Stick to your plan, keep YOUR clients happy, give them YOUR time and dedication. Your clients are a lifetime value, add to your hosting plans what you do best. There will always be people that undersell and try to lower prices below cost, but just let them do it. If you're here to stay, don't let these people trick you.

Just my Euro's

Nordic