If just including server cost, bandwidth, control panel, etc and NOT including tech support. Is this profit per account resonable?

Account Type - Basic Med High
Cost to User - $9.99 $14.95 $24.95
Comapny Profit - $3.95 $4.95 $7.45

If not could you tell me what you think would be a resonable profit/account. Thanks

For a reseller, yes. For someone with a ded or colocated that can do it cheaper, than even more so.

Originally posted by NikM755
... just including server cost, bandwidth, control panel, etc and NOT including tech support. Where's your marketing cost? You can't sign 'em up, if you can't get their attention first.

Not criticism... just something to think about.

;)

That is before marketing, tech support, etc. I just meant after server cost. Our marketing expenses will be very low compared to the average company our size.

Well at least you've factored it in... many new hosting companies think that the customers will just leap out of the search engines.

Sounds like you've got it covered...

Best of luck,

Keith

Those margins are two low to turn a profit...with the following still to come out of them.

Credit Card processing fees
Support
Advertising/Marketing
Design

Now, if you are just trying to gather some clients to enable you to move on to a cheaper solution that is ok. But you will never make money in this business with that cost versus price structure.

Do you already have a customer base? I don't think you can calculate profit per customer without that, unless you estimate # of customers.

Personally when we looked at profit, we took what our known monthly costs would be, and then took that amount and divided it by an estimated $/mo/client. The monthly costs took into account taxes and other charges. That gave us an estimated # of clients that we would need to reach the break even point. I say estimated, because you cannot be sure what customers will buy, but in your case I would use about $11.50-$12.00, assuming most will purchase either of the first 2 plans.

I am not sure if your server and control panel are rented or if they are purchased, but I don't think that you can included any one time costs in estimating profit per customer. One time costs get paid/reimbursed by the profit once you get some. If you are beyond a reseller, you have to be prepared to pay for those one time costs. You have to know what it will take to cover the monthly costs first, if you can't cover them it won't matter what your profit per customer is.

By the way, not bashing you, just trying to make sure you are not looking at just paying off those upfront costs without looking at the month to month costs. Maybe others will disagree, but you got to have a business financial plan that includes and estimates everything.

Good Luck

Good post eclipsewebs.

What we did when we looked at the price we should ask and when the break even point would be is:

Take the yearly costs (we rented a server at that time).

Double it. and devide it by the amount of your price per package (use the lowest priced package you have, because moest people will sign up for that).

Then you'll get the numbver of clients you will need before the end of the year to start making profit. When you think that are to many clients you should raise your prices a little, so that you have to get less new clients.


I'm saying double the yearly costs, because you will get costs you didn't expect at the beginning. For example extra Bandwisth, Domain registration fees etc. etc.

Originally posted by Starhost


I'm saying double the yearly costs, because you will get costs you didn't expect at the beginning.

Right on ;)

I'm on a reseller account with MCHost and i sell to local customers. I pay about $2 per domain (split up a bulk package) and sell it to my customers for $38/month. :D :D

xirus,


If I were you I would never tell others how much profit I'm making on a certain package.


Further more your site www.xirus.com isn't working.

Originally posted by Starhost
xirus,


If I were you I would never tell others how much profit I'm making on a certain package.


Further more your site www.xirus.com isn't working.

Yep, your site is down xirus. Could this mean MCHost is down? :eek:

Originally posted by Starhost
xirus,

If I were you I would never tell others how much profit I'm making on a certain package.

Further more your site www.xirus.com isn't working.

Yeah, i don't post my hosting URL here for that reason. ;) ;) I have not transferred xirus.com yet thats why it isn't working.

So . . . . what's your hosting URL? :stickout

Originally posted by MattS
Could this mean MCHost is down? :eek:

We are not down. http://status.mchost.com if you have any doubts. :)

Those prices are good if you're just trying to build your customer base but when you factor in all your costs it would be much better to raise them in the future.

But then you are misleading your customers.

First atrtracting them with low prices and then raise them I think that isn't a way of doing fair business.

I think that practice would be okay....AS LONG AS...your current customers continue to get charged their original price.

Just raise your prices and charge NEW customers the new pricing structure.

Doing it this way can help you get a large customer base quickly, then, after you have proved you are a reliable company, you can raise your prices and still gain new clients.

Just keep the commitment you made to your original customers, after all, it's because of them you have succeeded.

Originally posted by The Thinker
I think that practice would be okay....AS LONG AS...your current customers continue to get charged their original price.

Just raise your prices and charge NEW customers the new pricing structure.

Doing it this way can help you get a large customer base quickly, then, after you have proved you are a reliable company, you can raise your prices and still gain new clients.

Just keep the commitment you made to your original customers, after all, it's because of them you have succeeded.

Yep, he's right on