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  1. #1
    Join Date
    Feb 2004
    Posts
    385

    Big Mistake - Underestimating my webhosting business

    Well, it looks like I made a mistake on the packages I set up with my webhosting service. I only had a total of 50gb I could resell. The packages I set up on my site for sale was an increment of

    5000mb - package 1

    10000mb - package 2

    15000mb - package 3

    20000mb - package 4

    I already got one customer for package 4. Got 2 customers for package 1. Got one customer for package 3. Guess what that leaves me? With basically nothing, in the negatives. Now I have to recalculate and adjust my packages + pricing. Anyone have any advice on the best way of going about in this?
    “Intelligence is not to make no mistakes, but quickly to see how to make them good.” - Bertolt Brecht

  2. #2
    Join Date
    Mar 2010
    Location
    England
    Posts
    374
    How much space are you actually using?
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  3. #3
    Join Date
    Jun 2011
    Location
    Miami, FL
    Posts
    825
    Quote Originally Posted by reddem0n View Post
    Guess what that leaves me? With basically nothing, in the negatives.
    5GB Left, not bad...

    Quote Originally Posted by reddem0n View Post
    Now I have to recalculate and adjust my packages + pricing. Anyone have any advice on the best way of going about in this?
    I would suggest that you don't touch your existing customers yet otherwise they may move on to a more stable host.

    Does your reseller account allow you to oversell your space? If so, then I'd say this isn't an issue yet...just keep an eye on your disk usage and upgrade your reseller account as needed.

  4. #4
    Join Date
    Jun 2005
    Posts
    3,455
    Quote Originally Posted by MyITGuy View Post
    5GB Left, not bad...



    I would suggest that you don't touch your existing customers yet otherwise they may move on to a more stable host.

    Does your reseller account allow you to oversell your space? If so, then I'd say this isn't an issue yet...just keep an eye on your disk usage and upgrade your reseller account as needed.
    I would not advice someone new reselling hosting to oversell, I saw this before and once they start to like it, they abuse it so much that eventually its blows them on the face and lose all their customers.

    I would better stick with being able to provide the resources, in case their customers needs them. We are not sure if he only sold that or if they indeed are using most of their space already.

    Get a second reseller or upgrade the space, and next time make a better business plan. I agree that I would not touch them or you may risk losing them.

  5. #5
    Join Date
    Aug 2010
    Location
    Indonesia
    Posts
    205
    So how much actually your real space?

    Are you sure your costumer will keep exist with you?
    Is there any correction on your webhosting service?

    i suggest you to correct your web hosting services, or otherwise you make a promo to pursuade the costumers
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  6. #6
    Join Date
    May 2011
    Location
    New York, USA
    Posts
    4,019
    This is the time when you should offer "unlimited" plans.

  7. #7
    Except space, are you in the negatives in terms of expenses/income or not?
    ZerOne Hosting
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  8. #8
    Join Date
    Apr 2009
    Posts
    6,565
    How do you make such a big mistake like this? Did you really not factor in the cost of your actual expenses into your pricing?

  9. #9
    Join Date
    Feb 2004
    Posts
    385
    No, I am not in the negatives in terms of expenses / income. I did a calculation of everything and this first year will make me even as far as costs / expenditures. That's counting registering my business name as well with the state. Existing customers will keep me, they are all clients of mine that I've done business with in the past, they take my word on most things, so I'm not going to touch them and give them what they paid for. I am however going to readjust my webhosting packages and prices, also HEAVILY considering on upgrading to the next reseller package up which is 80gb, so I get about 30gb to play with. As far as space actually used, I would say less than 20gb of that 50gb was actually being used in total.
    “Intelligence is not to make no mistakes, but quickly to see how to make them good.” - Bertolt Brecht

  10. #10
    Quote Originally Posted by reddem0n View Post
    No, I am not in the negatives in terms of expenses / income. I did a calculation of everything and this first year will make me even as far as costs / expenditures. That's counting registering my business name as well with the state. Existing customers will keep me, they are all clients of mine that I've done business with in the past, they take my word on most things, so I'm not going to touch them and give them what they paid for. I am however going to readjust my webhosting packages and prices, also HEAVILY considering on upgrading to the next reseller package up which is 80gb, so I get about 30gb to play with. As far as space actually used, I would say less than 20gb of that 50gb was actually being used in total.
    If you did not go off budget in terms of expenses/income than think about staying with the current pricing scheme. It seems to be working for you in attracting customers so you may break it if you change your prices and/or services. When you attract enough customers go to a small dedicated server. Your income could pay the price of the dedicated by then. When you switch to dedicated you will have much larger room to grow and from there on you'll be making 100% profit with every new customer.

    That's just an idea of course, not a golden rule or something like that. You could go other ways and still be successful.
    ZerOne Hosting
    The experts on Windows VPS Services

  11. #11
    Join Date
    Nov 2011
    Location
    Harrisburg, PA
    Posts
    2,074
    Before you panic, look at your ACTUAL usage, not just the allocated.

    Few web hosting customers use more than a couple hundred megs of disk space, and most use a lot less. If your reseller allows overselling, you shouldn't need to worry. Simply monitor your usage and when your actual usage hits a set level -- making up a number, say, 50% of your actual disk space -- then you'll know it's time to upgrade. The same goes for your bandwidth.

    And this ties into the benefit of starting with a reseller: Once you get enough money built up through shared hosting, you'll be able to easily afford a VPS (or even a dedicated, which can be partially carved up into VPSes).

  12. #12
    Join Date
    Aug 2009
    Location
    England
    Posts
    198
    Quote Originally Posted by reddem0n View Post
    also HEAVILY considering on upgrading to the next reseller package up which is 80gb, so I get about 30gb to play with. As far as space actually used, I would say less than 20gb of that 50gb was actually being used in total.
    Is there any reason why you can't wait until you are nearer the 50gig usage? Can't see that you need it as you are using less than half of what you pay for.
    Kind Regards
    Christopher Smith

  13. #13
    Join Date
    Mar 2007
    Location
    UK
    Posts
    852
    Belongs you are breaking even on your current plan spec's then I see no reason to change, with any normal reseller upgrade's are going to become more cost effective. Not double price for double spec, so If your selling well no reason why you can't stay with your current plan's/prices?

  14. #14
    Join Date
    Feb 2003
    Location
    NY
    Posts
    11,863
    If you're breaking even just consider the current customers as a charitable hosting and move on. Reconfigure your pricing to be in line with what you are comfortable with (in terms of gross profit) and change the website. Easy fix.
    Doug
    Finance, Operations, and Business Executive

  15. #15
    Your customers are actually using up 20gb space with that few accounts?
    Check again cause that seems awefully high!
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  16. #16
    Join Date
    Feb 2004
    Posts
    385
    Well these are customers that I've already built a relationship with, not random fly by customers who happen to like what they see and purchase it. I simply designate a package I feel they are fit for, they take my word and purchase it in good faith. They are all starting out, either in the process of getting a website built (by me) or in the process of getting their existing site moved completely over to my server. The reseller company is hostgator, would anyone know if they allow overselling? Also, I wouldn't say customers are using 20gb, I have my own personal site there that I know I could trim down a lot if I wasn't so busy, I use about 8-9 gb of that space.
    “Intelligence is not to make no mistakes, but quickly to see how to make them good.” - Bertolt Brecht

  17. #17
    Join Date
    Feb 2010
    Location
    Hong Kong
    Posts
    106
    You can just simply send your host a email and you get the direct answer whether your host allow overselling anot.

  18. #18
    Join Date
    Dec 2009
    Location
    Milan, IT
    Posts
    478
    You should buy more space from your hosting provider, leave old clients as they are (hoping they don't consume all the allocated space), rethink your plans lowering your disk usage or (as someone suggested) go with unlimited plans and some new rules in your AUP/TOS
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  19. #19
    Join Date
    Dec 2009
    Location
    Greece
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    802
    Quote Originally Posted by iperweb View Post
    You should buy more space from your hosting provider, leave old clients as they are (hoping they don't consume all the allocated space), rethink your plans lowering your disk usage or (as someone suggested) go with unlimited plans and some new rules in your AUP/TOS
    No point in getting the OP offering unlimited plans,on a limited disk,he won't be able to provide what he offers.

    @OP your plans are fine,since you have customers that already are using them,so everything is ok,either upgrade your package with hostgator,or start experimenting with a second reseller account,with a different company.That way your business will grow.

  20. #20
    Join Date
    Dec 2009
    Location
    Milan, IT
    Posts
    478
    I was joking with the last suggestion :-)

    There is another thread about unlimited plans were you can see what are my thoughts about them...
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  21. #21
    Join Date
    Dec 2009
    Location
    Greece
    Posts
    802
    Quote Originally Posted by iperweb View Post
    I was joking with the last suggestion :-)

    There is another thread about unlimited plans were you can see what are my thoughts about them...
    I was almost tempted in replying there Especially with hostgator,which has unlimited advertised on the shared hosting,the OP might consider copy paste the products...We can imagine where it will end up.

  22. #22
    Join Date
    Aug 2010
    Location
    Canada
    Posts
    238
    Even if you want, you cannot provide unlimited space from a reseller account.
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  23. Yes, typically I see around 30% usage of allocated space only.

  24. #24
    That is rather high amount of disk space for such few customers, you need to check again on the actual amount of space used rather than what you have allocated to your customers.

    If your customers are using only a few hundred MB then you have nothing to worrie about just yet as if your provider allows you to oversell you will be able to do this for a short while, Please dont get to comfortable on overselling tho as this can cause you more problems as your business progresses than it is worth

  25. #25
    Join Date
    Jul 2002
    Location
    London, United Kingdom
    Posts
    4,455
    Quote Originally Posted by reddem0n View Post
    I already got one customer for package 4. Got 2 customers for package 1. Got one customer for package 3. Guess what that leaves me? With basically nothing, in the negatives. Now I have to recalculate and adjust my packages + pricing
    The time to have set sensible packages and prices was before taking on the clients

    Now you need to upgrade your reseller account and reorganise your plans, leaving existing clients with what you promised.

    It wont be the last mistake you make on the numbers - take a deep breath and get ready for the next one
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