Exactly as the title stats, Should "We" as webhosts charge "Our" clients a setup fee? I'd like to hear your opinions and options, I personally, from a business side of things do NOT believe in offering any kind of setup fee, whether it's $10 or $1 I say "Goodbye to setup fee's"

Please take part and vote.

Cheers,

Voted no on this one: purely because in my opinion if someone is charging a setup fee its more than likely because they are not making enough money to cover costs.

Although I think for dedicated server you should charge a setup fee.

Heck YES you should charge set up fees.

Did anyone give you your skills for free? How bout your servers? Your software? What about the roof over your head? Did anyone set up your cell phone for free?

If you are running a business, you are not here to give away products and services. You are here to turn a profit.

The only reason that you are questioning this is due to the many "HOBBYISTS" that are disguised as "Businesses" who are simply ruining the market by giving away services. Proper set up and provisioning is PART OF THAT SERVICE. And anyone who gives that away is a FOOL

For shared accounts absolutely not. For dedicated servers I would say yes. It takes time and skill to set up a server correctly, something a tech should be paid for. Otherwise, you can hire a bunch of crappy admins who will get paid less but won't know difference between Linux and Windows (hypothetically speaking).

It takes time and skill to set up a server correctly, something a tech should be paid for. Otherwise, you can hire a bunch of crappy admins who will get paid less but won't know difference between Linux and Windows (hypothetically speaking).
I'll play devils advocate for this one.....so it doesn't take time to setup an account? Should a tech not be paid for this?

With a dedicated server its particular install the o/s and your done. The installation of the o/s doesn't take anytime as you can set it to install and work on something else.


John

Customers do not like to pay for something that really is nothing, and something that other webhosts offer for free.

Shared hosting, no. Dedicated, yes. There is so much software now to almost completely automate account setup on shared hosting, and if you didnt do any work, you shouldn't charge for it. Most companies put their costs in the hosting plan.

I don't like paying set up fees for my cell phone, nor a diagnostic charge to my mechanic when there is a problem he will get paid to fix.

But guess what. There is this thing called OVERHEAD. You know, Cost of Doing Business.

Real businesses understand this concept. This web hosting market is infested with kiddys who work from a reseller account and do not understand the business world.

I'm currently only using a cheap reseller, so I cannot see a reason to charge a setup fee, it takes less than five minutes to add a new user account, pointless to charge a setup fee in my eyes.

With a dedicated server probably Yes although I haven’t used these before and my knowledge is 0, I'd put all the costs into the whole hosting package itself.

I'll play devils advocate for this one.....so it doesn't take time to setup an account? Should a tech not be paid for this?

With a dedicated server its particular install the o/s and your done. The installation of the o/s doesn't take anytime as you can set it to install and work on something else.


John


On the contrary. Setting up a box is more involved than a simple shared account which is setup automatically in most cases. You have to build the server, install OS (whether its auto or not, doesn't matter), control panel, etc...Definitely have to pay for it.

There is no good reason to charge a setup fee. As someone who has been in the hosting industry for 10 years, I can tell you the obvious: the goal of hosting is to get long-term customers, which equals recurring revenue.

Why would you create barrier to a customer relationship that could result in years of recurring revenue?

For shared it's not really neccessary to charge a setup fee. I've been in this industry for three years, setting up a shared account is routine. If anything cost more at the beginning it's the initial support costs of the customer and for that you can charge a setup fee at your own discretion. Dedicated servers require more work to obtain hardware, along with software and run the initial setup so in that scenario it's a better idea to have at least a small setup fee.

My opinion: for monthly billing, charge a setup fee on the first month; if they dedicate themselves for quarter, year, etc, waive the setup fee--I'd have earned the setup fee back in that time anyway.

I'd agree that definately no setup fee for shared.

With dedicated, have a setup fee but be willing to waive it as a negotiation tool with the prospective client. If you hold fast to the setup fee, you can lose customers.

I have found that sometimes the act of waiving the setup fee is what is needed to bring in the customer. And, frankly, the web hosting business is about recurring revenue not one-time fees so much.

My opinion: for monthly billing, charge a setup fee on the first month; if they dedicate themselves for quarter, year, etc, waive the setup fee--I'd have earned the setup fee back in that time anyway.

I agree and we at 1PlanHost have followed this strategy for many years. It used to be common to charge a set up fee of $25 - $50 even for shared and no one ever batted an eye on it. Of course that was back when we could charge $35 - $50/mo for 5Mb of space and customers considered that a great price! A lot has indeed changed over the years but serious companies in the marketplace adapt yet keep their heads heads above water financially. So many today are giving away the farm in order to gain customers but in the end will falter financially. I have seen many come and go in the past 10 years for this very reason.

Best Wishes for a .Net Success!

. . . If you are running a business, you are not here to give away products and services. You are here to turn a profit.
I'm here to build a client base, and build up that recurring revenue, where infratructure can be safely built out from beneath. That's the asset - that's the main game.
The only reason that you are questioning this is due to the many "HOBBYISTS" that are disguised as "Businesses" who are simply ruining the market by giving away services. Proper set up and provisioning is PART OF THAT SERVICE. And anyone who gives that away is a FOOL
Absolute bollocks.

Setup and "provisioning" is adding to your client base, and building your recurring revenue. That's the main game with the hosting business, and not making a few bucks from setup fees.

I would have a setup fee if your targeting a Business Hosting market (a.k.a. High End Hosting solutions)...

Cheers,
-- Tim

Honestly, I would never pay a setup fee for a shared hosting account. My vote is no.

Regards,
Steve

I wouldn't charge a setup fee on shared and reseller accounts if it's just for the hosting and/or domain for a few reasons:

1. They are not only sending you a payment, but increasing the value of the business as a whole. If you were to sell your business that client would be a part of the total value and so the more clients, the higher value.

2. If the host in question has already established a certain brand image (pricing is a part of this, IMO) that they are happy with, I would avoid messing with that.

3. It's simply another paying customer and I have the motivation to create their account, no issue with it.

4. I think this question is somewhat flawed from the start - depending on the price, the setup fee may already be factored in; you can say that there is no setup fee but in reality it's a part of the payment paid. A certain amount of the hosting payment should account for miscellaneous things and this could be one of them.

As someone said earlier, a "setup fee" could be used for negotiation purposes and could be waived during specials.

A setup fee is completely justified and valid and often times expected for shared hosting as much as it is for dedicated server hosting. I'm not saying if you don't charge a setup fee you're wrong, but if you cater to the SME market, a setup fee is the "cost of doing business" in the business world. It may turn away a few penny pinching clients, but it also can serve to foster a more serious clientele, which equates to long term stability. It is also a great bargaining chip as a host to waive the setup fee to give the client a sense of "winning" when you are "closing the deal".

Everyone thinks if the account creation is under 5 minutes and mostly automated that a setup fee is stealing. Let's not forget the large amount of upfront support that comes along with many new signups, the initial problems they encounter and need help on, getting the new site to work properly, etc... All this is accounted for in a setup fee many times.

If you are selling sub $10/month shared hosting to a mainly personal hosting audience, then a setup fee is probably not right. But if you cater to a more serious market, a setup fee can be used as a great marketing tool if handled in the proper environment. We make $xx,xxxx per year on setup fees, and we're just a small player. This additional revenue helps us provide the level of support new clients are amazed by, that equates to 5-10 year+ clients.

Customer retention with a setup fee?? You betcha!

- John C.

Shared hosting, no. Dedicated, yes. There is so much software now to almost completely automate account setup on shared hosting, and if you didnt do any work, you shouldn't charge for it. Most companies put their costs in the hosting plan.

I agree, shared no... dedicated yes. :)

. . . I'm not saying if you don't charge a setup fee you're wrong . . .
Exactly.
Everyone thinks if the account creation is under 5 minutes and mostly automated that a setup fee is stealing. Let's not forget the large amount of upfront support that comes along with many new signups, the initial problems they encounter and need help on, getting the new site to work properly, etc... All this is accounted for in a setup fee many times.
Yeah, although I'd tab that under general support. It does take me an average of 15 minutes to setup an account, when you do your fraud screening etc. I also setup accounts manually, and not automated.

But looking at the market today, things are very competitive, and getting more so, and setup fees kinda went the way of the dodo bird, as lots of hosts looked to remain competitive. Each to his own. :)

I charge on dedi.

We have some services which may cost more, such as our remote monitoring with tools, which allow CPU, RAM, SWAP monitoring etc - which requires our installation. And perhaps our remote backup too.

We charge a setup fee on reseller accounts, but not virtual hosting accounts. I think, professionally, there should be a small setup fee on all accounts, mostly because it will deter the types of customers you don't want anyway, but since most companies don't charge setup fees anymore, it's almost necessary to do the same. Instead of setup fees, we just give heavy discounts on longer payment terms. 50% off with yearly, which has a similar effect.

The only reason the Setup Fee has disappeared is because of the very competitive market..

Otherwise, there is a very good case of a Setup Fee on any sort of internet account. Fraud Screening takes time/money and a client's first month usually has them asking more questions than the following months..

However, the setup fee has been largely replaced by the money-back guarantee, which is the exact opposite of the setup fee :)

...But looking at the market today, things are very competitive, and getting more so, and setup fees kinda went the way of the dodo bird, as lots of hosts looked to remain competitive. Each to his own. :)I guess I'm an extinct bird then. ;)

If you compete on price, then yes, having no setup fee is probably essential to survival. If you compete on value, service, whatever you want to call it, then having a setup fee can actually help you towards that goal. It takes a bit of creativity and marketing spin to pull it off correctly, but trust me, the setup fee can be used to further sales, profits, and you can remain competitive.

If setup fees didn't work anymore, then no one would use them. That is not the case. We may be a small minority these days, but sometimes that is a good thing. :D

- John C.
(charging setup fees since 1995 and loving it!)

I guess I'm an extinct bird then. ;)
I did say "kinda went the way of the dodo bird", so not entirely extinct. Just getting rarer and rarer. :D

Well I charge a set up fee but my market is the higher end.