Sorry for another silly question ..... why is it that some hosts charge a setup fee and some don't. Best wishes, kayes the newbie.

Because it takes time to set up the account, add you to billing databases, configure special needs etc.

Its called covering your time I suppose.

I personally dont like to work for free myself, so I can understand the charge and would pay it if my instints told me it was a vendor I would like to use.

Some hosts can offer nice cheap plans and compensate a little by charging a set up fee. It's just business. :)

Ive seen people charge a "Setup fee" with automatic setup!

Greetings:

Sometimes set up fees go to cover labor involved and make a profit on that labor (you are not in business to break even or loose money).

Sometimes set up fees go to cover capital costs such as the cost to develop an automatic set up system or the cost of the actual hardware or a portion there of.

Those that have no set up fees are usually covering the cost with other funds; it is a loss leader.

Thank you.

Originally posted by dynamicnet
Those that have no set up fees are usually covering the cost with other funds; it is a loss leader.

Or just consider setting up an account (all 5 minutes work) to be a part of the business, and don't feel right about charging for it.

I could understand it from a dedicated server provider, as that involves some actual work, but not virtual hosting.

Greg Moore

I think this has been discussed quite often already. I recommend doing a search. :)

A setup fee also makes the order a little more of a commitment. I personally would not want a lot of clients that order a cheap plan then cancel the next month; more of a pain than it's worth.

... I hate setup fees.

I think that, provided that you charge your monthly fee in advance, there is no need for a setup fee. And yes, most hosts have automatic setup, which is pretty cool actually and I wish I could have some "automatic staff" that setups the servers :D
...but still they charge a setup fee.

Maybe it is just me. Maybe I am even WRONG... but I just don't like setup fees. IMHO it is a LEGACY from times where hosting accounts took 1h+ manual work to be made and now it is used as an "excuse" to make extra money to the clients damage. The aRgument that people sign up and then leave...well.. if you provided service you keep the monthly fee they payed and if your service is good then the client will stay...

I don't like setup fees with shared hosting accounts.
How much time does it take to setup an account nowadays...
Just login to your control panel, click add site, enter a few lines of info and you're done. Two minutes work.
I don't think it's really 'customer-friendly' as well, IMHO.

If you talk about dedicated servers, it's absolutely reasonable to ask for setup fees, because it takes much, and much more work setting up a dedicated server ( installing the machine, configuring OS, installing control panels, hardware costs, etc ).

Just my 2 cents :)

<<MOD NOTE: Removed, off-topic>>

Originally posted by Samuel
<<MOD NOTE: Removed, off-topic>>

Let the flame wars begin... :rolleyes:

Originally posted by Samuel
<<MOD NOTE: Removed, off-topic>>Perhaps you could tell us how your new accounts are handled? Do you keep everything in a local database on your PC? If so, do you consider that to be more secure than a hardened UNIX server behind a firewall?

Just something to consider...

Greetings:

Time is money. People's time has value.

One is not in business to provide services and products for free. If you provide them for free, that's your choice and is often a loss leader. You are giving away something that has value.

Thank you.

Originally posted by ShareFile
Maybe it is just me. Maybe I am even WRONG... but I just don't like setup fees.
You can't possibly be wrong for having an opinion.

Originally posted by diederik
I don't like setup fees with shared hosting accounts.
How much time does it take to setup an account nowadays...
Whether anyone likes or doesn't like setups fees, there are reasons hosts (and other companies) have them. Just saying, "How much time does it take to setup an account nowadays?" -ignores all the reasons that a host might charge a set up fee.

Most hosts are for-profit businesses. The way they achieve that profit is neither right nor wrong, so long as they aren't just scamming people and not providing services. Likewise, one host is not right or wrong for charging $2/mo. more for a similar package than another host. To say otherwise would just be silly.

Some of the reasons hosts charge set up fees (some repeats):
Setting up the account (and all that goes with it)
Lower monthly fees
Development/payment of software
Hardware
Increased commitment
Initial support coverage (new clients tend to have more questions)
-and last but not least...
For profit (used to grow/maintain business in general)

Your monthly fees go towards all of this as well (of course), however there's not much difference in one host charging a set up fee of $25 and pricing a plan at $7/mo., than another host charging $9/mo., for a similar plan (assuming the clients stay for a year). Likewise, another host charging $50 set up and $25/mo. for the same plan. It is just the amount they charge, if you don't care for set up fees, sign up somewhere that doesn't have them.



Edit: Regarding setting up accounts, etc., all of that is off-topic, feel free to start another thread about it, but it has nothing to do with set-up fees.

The aRgument that people sign up and then leave...well.. if you provided service you keep the monthly fee they payed and if your service is good then the client will stay...

Interesting, but not relevant to me, since I have yet to lose a customer to poor support.

I was referring to those who, on impulse, sign up for hosting, then never bother to design whatever webpage they were planning to do.

I would rather not deal with this sort of buy at all, since it's more trouble than it's worth. With the setup fees, there is less of this type of problem, and the fees make it worthwhile if it does happen.

Originally posted by akashik
Or just consider setting up an account (all 5 minutes work) to be a part of the business, and don't feel right about charging for it.Presumably everything you and your employees do is charged for in the hosting fees your customers pay. So every host is charging for the same things: both the cost of setting up the accounts and the cost of maintaining it. The idea that a setup fee is "extra" money is erroneous; it's simply a different way of structuring the same payment for the same service. A setup fee simply frontloads the payment stream.

I'm seeing less and less places charge set up fees as more and more providers offer free setup. People have to stay competetive.

Greetings:

Yes, people have to stay competitive. However, if everyone jumps off a cliff, do you?

There is a gigantic philosophy out there that people buy based on price, therefore "we have to be the cheapest game in town," and everything done is to get the lowest price.

Use tech support from third world countrties because their labor forces are 1/3rd to 1/4th that of U.S.

Don't offer telephone support because of it, and the desire to keep costs down.

When you do hire tech support, pay wages not too different than from McDonalds. I've read a message in one of the WHT forums stating something to the effect... "you can get a half a..... tech person from $7 per hour."

Well why not pay as close to going wages as you can afford and have some one that gets it right 99% of the time instead of maybe 50%?

All due to keeping costs down. Mostly because of a belief one has to charge the least in order to get a customer... then wonder how there are companies with hosting customers paying several thousand dollars per month for hosting (yes, thousands instead of single digits in dollars).

Before I go off to far an a totally different subject matter, let me re-state what has been stated by several people here:

1. Most hosting companies are "for profit" businesses.

The concept is that you make money on every single action.

2. Even in automated systems, there was labor involved in the creation of that automated system.

No matter how it is handled, there are some forms of cost == labor, capitalized expenses, etc.

3. Unless there is complete automation, accounting time is involved.

4. Unless your credit card handling system is surpreme where there is zero chance of fradulent orders, you usually have some system of making sure the order is valid.

For instance, when we ordered a server from Rackshack.net, we got a call in less than one hour to verify our address, the credit card used, etc. That's labor and the person who called probably gets a paycheck.

When a company decides not to charge a setup fee, it is not necessarily true there were no costs involved in the set up; they are just choosing to eat the loss.

And if a company has a setup fee, it does not mean it is not being a competitive company. It may mean they do have costs along with operating under sound business principals... one is in business to make a fair profit and not to provide free services.

Thank you.