Hi, as you guys see im new around here, I have been reading trough this forum often but i just registered and im full with noob questions for ya.. :)

OK im confused on how you guys decide how much to charge for hosting, I mean do you have a method to calculate it out or you just charge what you think is right.. I would guess its easiest to calculate the expenses per server and total gig, and then take charge after that, I mean if you have a 200gig server and it costs you $200 to have it you can not sell less than $1/1gig...

But again im the new guy and dont know, thats why im asking.. :o

It can get quite complicated figuring out pricing, but here's a simple formula.

Take the price of your server and add to it the profit you'd like to receive from that server.

Now figure out what your standard plan will be (disk space/bandwidth). Now divide these specs into the specs for the server to see how many of these "standard" accounts you can safely put on the server. Keep in mind, this should be a mid-range plan, so that some will go cheaper and some will go more expensive.

After you figured out how many of these "standard" plans you can fit into the server, take the price of the server + profit and divide by the number of "standard" plans and that will be your base price for that plan. Now adjust your prices for your lower and higher plans accordingly.

That's a simple method, but it does work.

One thing that doesn't work is copying another company's pricing scheme. You don't know what their targets or overhead is and so you won't necessarily be able to compete. Use your own numbers to come up with your own pricing.

There is only one "rule".

Charge more then your costs.

That's it. Everything else is totally up to you and your business plan.

ie: If you are in the "low cost budget cheapo" hosting market, then you will need to how very low pricing in order to compete.

If you are in the "premium hosting" market space, then your prices can be much higher.

If you are in the "local hosting" market for your immediately physical local business community, then your pricing can be even higher...

If you're starting out, then I highly recommend sitting down and drafting a business plan. Just getting a server and sticking up a website with hosting for $x prices isn't going to make you successful.

Good luck!

Yes,

Choose a target market first. This will start you off in the right direction. Then research your competition and see what they offer and what they sell it for.

deciding on what to charge is reallie not that easy.
1st:first up you need to know who you are targetting.
2ndly, know your competitors (preferably your direct local competitors).
3rdly, calculate your costs per server n how much profit you want per server (this is solely based on you),
4th draft out a plan.
5th be different! make yourself stand out
6th market market market as if the your next meal depends on it.
7th lots of luck ;)

AS of now there are more than thousands of hosting company in the market offering different varient and flavours, prices has to be determined with everything, your server maintainance, your profit margin, services you are going to provide your cliens, advertising stratgy, the kind of support you would be providing to your clients.. so think about all this and decide a plan based on all this

It depends on what you are paying for.
And what you have.

Id usaly charge :
$0.99 per 5GB Disk
$1.25 per 10GB bandwidth..

I too have similar questions with the OP but have my own doubt of what and what. This is a thread I opened a few while ago asking for an opinion of the spreadsheet which function to get the best pricing for my server plan. Appreciate if you can take a look and share your opinion on this.

Sorry, not to try hijacking this thread, just that I share common interested as with the OP.

As for my understanding, I did a bit of research and still haven't concluded it yet. But is seems worth it to choose a niche of your webhosting business. Once you got your niche, find out what people has been paying and what do they get for their money. After that, draft a plan that offer what they want with less price OR higher price with a few new addition that value to their money.

I forgot, the thread is located here.
http://www.webhostingtalk.com/showthread.php?t=852604

It depends on what you are paying for.
And what you have.

Id usaly charge :
$0.99 per 5GB Disk
$1.25 per 10GB bandwidth..

You are either an extremely cheap provider or an extreme overseller at those prices.

For a 5GB/10GB package, you only charge 2.24/mo????

One of the things that newbies often overlook, when coming up with a pricing scheme, is long-term support costs. Just because support doesn't cost you anything, right now, because you and your buddy are able to take care of it...doesn't mean it will always be that way. You MUST take support costs into consideration.

--Tina

Just because support doesn't cost you anything, right now, because you and your buddy are able to take care of it...doesn't mean it will always be that way. You MUST take support costs into consideration. Spoken like a fire baptized soldier there Tina. :)

A way you may want to look at it is see how much a server management company charges each month and what your server costs. Lets say that server management company charges $150 for 150 support issues and that is how many you get within a 30 day period and your server with 2x500 GB HD, 8GB RAM, 10000 GB Transfer costs you $350. Add both the $350 and $150.

Divide the $500/900 GB and see what you get? That would cost you like $0.57/per GB but don't forget transaction fees and a profit margin. If you use paypal add the 2.9% to the $0.57 and than add the $0.30 when you complete the plan.

Example: 5GB Space/50GB Transfer $3.25/mo but also you want money to cover any other expenses. So you may want to charge $4.95. Now this is if you don't have an affiliate program, if you have one; account for that affiliate percentage. Lets say your server can handle 180 accounts x $4.51 (Earnings after only transaction fees) you make $811.80 but it costs you $500 to run that server. Your profit is $311.80 which is nothing if you have sales/billing employees, other unexpected costs, office supplies, equipment or if you went over the 150 support ticket threshold or your bandwidth. Its something you need to work with for a few days and see if it works. I recommend all new hosts to create a three year profit/loss projection spreadsheet.