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01-09-2015, 06:11 AM #1WHT Addict
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How are some web hosts selling so cheap?
Hi.
I have seen many web hosting companies selling for very cheap. I thought I was selling cheap but then I realised that there are others who are much much cheaper. Some of them selling 100 GB shared hosting for only $7 ? And me selling for like $30 And I still have a hard time maintaining a profit.
So how are they doing this? I'm starting to get fed up of trying to cope
Thanks.
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01-09-2015, 06:35 AM #2Junior Guru Wannabe
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Overselling, cutting all expenses, bad or no support, etc. That's one variation
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01-09-2015, 07:09 AM #3Web Hosting Master
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What some of us do is work out what it costs us say it's a 6tb server and you want to sell 500gb/server, the cost is $200 so 200/500 = $0.40/GB then for 100GB it'd bed 100*.40 = $40.00 then see if you want to make staffing costs on top.
people are sometimes blindsided by the price such as 50GB for $7 will sell no matter how bad reviews are.
Doesn't mean everyone is overselling.
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01-09-2015, 07:28 AM #4WHT Addict
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Yes I agree that 50 or 100 GB for $7 will sell no matter how bad reviews are. I'm starting to think of giving bad hosting with cheap prices. And maybe oversell like crazy with no support
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01-09-2015, 07:50 AM #5Newbie
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Chances are those plans are being oversold, if you read there TOS, it will most likely say that file storage etc etc are not allowed...
If you are not overselling be proud of that fact, as i believe the overselling hosts will run in to a problem sooner or later.
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01-09-2015, 08:03 AM #6WHT Addict
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Thanks for the vote of confidence. I'll just stick to my current plans and see how things go.
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01-09-2015, 08:05 AM #7The Linux Specialist
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Stick to your business plan and don't go under just to compete with others.
We've been doing business since 2001 and I've seen many hosts ( super cheap hosts ) that come and go :-) . We are still here but those super cheap hosts since 2001 are no longer here :-)
It is because they are selling like noodles :-)
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01-09-2015, 08:49 AM #8WHT Addict
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Nice to hear some encouraging experiences from someone who has been on the same track. Thanks
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01-09-2015, 12:21 PM #9Managed VPS Experts
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If you think your pricing is making a profit, keep it. They over-sell and only last for a few months.
Do not fall for that trap.
- Daniel
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01-09-2015, 12:24 PM #10Total Nerd
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Some of us sell web hosting in addition to other services so we can afford to sell hosting for pennies since all of the infrastructure is already paid for by other services.
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01-09-2015, 02:19 PM #11WHT Addict
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"If you think your pricing is making a profit, keep it. They over-sell and only last for a few months.
Do not fall for that trap.
- Daniel "
Thanks for the pointers. Will keep those in mind.
"Some of us sell web hosting in addition to other services so we can afford to sell hosting for pennies since all of the infrastructure is already paid for by other services."
It could be done that way since other expenses like marketing, etc are already covered. But I see hosts that are not selling other stuffs. They have to be overselling unless they got some very great deals.
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01-09-2015, 11:55 PM #12Total Nerd
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When I was in college a few years ago I had a few classmates that sold $1/month hosting off of $10/month reseller plans and were pulling in hundreds of dollars a month and they had no knowledge of hosting aside from how to cash out their Paypal accounts every night. These days it's even easier and cheaper to run a hosting company so you can't compare yourself to other providers because odds are that no other provider is exactly like you so take what is unique about you and stand out from the rest.
If it makes you feel any better, we used to sell web hosting for $1/month but we kept raising the prices to slow down the amount of orders we got so we didn't have to keep building new servers every other month. I'd take 1 $10/month order over 10 $1/month orders any day.
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01-10-2015, 12:02 AM #13Web Hosting Master
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I know how! Kids living with their parents, under legal age, overselling and abusing customers, exposing customers data, and probably not paying employees what they have to, much less filling taxes. If you know what I mean...
Shame we have a few here.
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01-10-2015, 01:09 PM #14Web Hosting Master
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Overselling with the hope that the customer will never use the space.
Also many industries operate as such. Printing for instance. Print one sheet of a specific type of paper and it's anyway between a dollar or more a copy. Print 5000 sheets and you're looking at 2 to 5 cents a copy.
Hmm. I don't think I've come across any host like this. Could you elaborate on this company some more.
***I'm joking. We don't want to turn this into another circus***
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01-10-2015, 04:40 PM #15Web Hosting Master
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Some hosts are sucessfull while others arent. Its mass selling in other words. Think of it like this they try to pack all servers with clients / sites they dont reinvest any of that money they make to make the server better instead they add more servers or resellers to their network and tepeat steps. In the end of the day the person who signs up with them gets the short end of the stick bevause the service isnt good at all because these days most times you get what you pay for.
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01-10-2015, 10:03 PM #16Web Hosting Master
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They are making money on money on volume, not by offering quality service that attracts users seeking a premium experience.
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01-11-2015, 07:11 PM #17WHT Addict
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Thanks everybody for the input.
I have seen namecheap selling for extra extra cheap. If I were to compete with them, I would definitely have to bear losses. What about them? I think they are a big company. And how do we compete with them?
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01-11-2015, 07:15 PM #18WHT Addict
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Hmmm. I too was thinking it could be something like that. Buy a server, pack it up with clients, make the prices low, forget about it and after the breakeven, earn residual income.
That must be the reason for such cheap prices. So we have no ways to compete their prices?
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01-12-2015, 04:37 AM #19WHT Addict
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01-14-2015, 01:02 AM #20WHT Addict
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Selling on high volume with low prices incurs more expense for support, etc.
Example, if you sell to 100 people for $1, you get $100.
And if you sell too 10 people for $10, you get $100.
Now, you can actually provide better support to 10 people rather than 100 people with the same amount of money.
So how does volume = quality? I don't get it.
Correct me if I am wrong.
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01-14-2015, 01:17 AM #21Web Hosting Master
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The majority of the time, volume and quality does not work.
It doesn't.
Also look at it this way...why would all 10 or all 100 people need support?
The only time all the customers would need support;
1. when they first sign up
2. hardware failure
3. network failure
4. the service sucks
With the right setup, there's almost no reason for customers to need support..or need it all at once. One a day or steady flow.
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01-14-2015, 03:14 AM #22WHT Addict
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It's true that 100 customers should need more support than 10.
But paying higher price for hosting doesn't ensure quality service.
It all depends on how the company handles customers and cares about them.
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01-15-2015, 01:22 AM #23WHT Addict
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Yes you are right that not all of the customers will come for support at once. But still the number of people will be higher. Say 10% of the customers will actually come for support on a day. So 10% of 100 is still more than 10% of 10 people.
So what I am trying to say is the support expense still applies.
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01-15-2015, 01:26 AM #24WHT Addict
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01-15-2015, 01:30 AM #25Web Hosting Master
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