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  1. #1
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    Is there still money in web hosting?

    Hello,
    A few years back I used to run a web hosting company, which then grew and I sold. I am after creating another project, and looking back my web hosting was successful, so my question is before I spend loads of money on servers, is there still money too be made, or is there now too much competition?
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  2. #2
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    Clearly people do make money, otherwise nobody would do it. Clearly others don't, as hosts fold every day. It's certainly a very crowded market, and I don't know how anyone can say whether or not you would succeed. With so many hosts handling risks or server management irresponsibly, if you do things well and right you're certainly in with a better chance than many. As to whether that's a guaranteed recipe for success ...
    Not as active on WHT as I used to be, but still drop in and receive email notifications from here.
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  3. #3
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    If you have previous experience then it will certainly be easier for you
    Check your sales agreement as often there is a restriction on how long it is before you can re-enter the market (usually three years)

    The main issue now is the entry into the market of low priced, high specification hosts
    Hosting prices have fallen by about 50%, however costs have fallen as well
    Sadly Domain Name prices have increased, and continue to increase, equally customers don't seem to appreciate this
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  4. #4
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    There will never be too much competition, as long as you have a somewhat unique offering and commendable service. Data is one of the only industries that is gaining demand exponentially, and web hosting is the consumer-driven front end (so, yes, there is money to be made). I would not say it's a market that anyone could succeed in; certainly there is fierce competition, and many hosts barely last a few months before tanking -- but if you have several years of perspective and know your way around a little, then you'll probably have a good chance.

  5. #5
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    Quote Originally Posted by HH - Josh View Post
    is there still money too be made
    Making money and turning a profit are 2 different things.

    I wouldn't expect to see an ounce of profit for the first couple of years at least...
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  6. #6
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    Quote Originally Posted by cd/home View Post
    I wouldn't expect to see an ounce of profit for the first couple of years at least...
    How much experience do you have running companies? Sounds like none..

    If you do shared/reseller hosting, it wouldn't be a shocker if you turned a profit within 30 days. Dedicated servers I would say not so much, unless you're reselling, in which case it's all gravy.
    Last edited by Dougy; 12-17-2011 at 07:48 PM. Reason: extra period at end needed to go
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  7. #7
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    Thanks for the heads up guys, I guess theres only one way to find out! The way I look at it now is to say I won't be making some of the mistakes I made first time around, as I now no how to avoid these

  8. #8
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    Quote Originally Posted by HH - Josh View Post
    Hello,
    A few years back I used to run a web hosting company, which then grew and I sold. I am after creating another project, and looking back my web hosting was successful, so my question is before I spend loads of money on servers, is there still money too be made, or is there now too much competition?
    Competition exists in every big business segment. Furthermore, competition is great for consumers and businesses. If you're worried and intimated by rivalry then invent the wheel

  9. #9
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    Quote Originally Posted by Dougy View Post
    How much experience do you have running companies? Sounds like none..

    If you do shared/reseller hosting, it wouldn't be a shocker if you turned a profit within 30 days. Dedicated servers I would say not so much, unless you're reselling, in which case it's all gravy.
    +1
    Being profitable from first month is the major reason we have so many new hosts coming up everyday. If there was some entry barrier like capital investment web hosting wouldnt be as competitive as it is now. This is unfortunately true with almost all service related businesses.

  10. #10
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    I agree, When I started out last time I didn't have loads of money, and I had the company for a few years. I no for a fact I was making money after the first month otherwise I wouldn't have been able to continue!

  11. #11
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    Of course there is money in Web Hosting, as others have said, if there wasn't then we wouldn't be seeing as many new company's appearing on a daily basis.
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  12. #12
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    I have been lucky making money so far, but my company is smaller than most I beleive. Therefore I do not have massive expenses on a monthly basis.
    I also do most of the support and accounting which allows me to save on those expenses.

  13. #13
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    Quote Originally Posted by JamesOakley View Post
    Clearly people do make money, otherwise nobody would do it. Clearly others don't, as hosts fold every day. It's certainly a very crowded market, and I don't know how anyone can say whether or not you would succeed. With so many hosts handling risks or server management irresponsibly, if you do things well and right you're certainly in with a better chance than many. As to whether that's a guaranteed recipe for success ...
    According to you
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  14. #14
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    Yep - it's all opinion on this thread. What don't you agree with?
    Not as active on WHT as I used to be, but still drop in and receive email notifications from here.
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  15. #15
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    There is definatley money to be made if you play your cards right. In plain old Shared/Reseller hosting I am not so sure unless you can get clients locally or offer something really unique.

    That said the amount of providers starting up and shutting down or selling is really going up. In the time since we started in 2006 I've seen a number of people start up and sell 2-3 times.

  16. #16
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    Quote Originally Posted by PCS-Chris View Post
    In plain old Shared/Reseller hosting I am not so sure unless you can get clients locally or offer something really unique
    It really depends on your business plan
    With shared / reseller you need to have a large number of customers to cover your costs, and this is where many new starts fail

    I am lucky in that I have very few local customers and don't really offer anything unique
    Just simple, cheap, basic website hosting

    One point of a business is to have an exit strategy
    Many large companies have this and set this based on their business plan
    I know of one such company that has effectively run the same business three times, run it for between 3 and 5 years, then resold it again
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  17. #17
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    Quote Originally Posted by Dougy View Post
    How much experience do you have running companies? Sounds like none...
    Yes, I have much experience as I am an investor in alot around here on WHT, After you have layed out a serious amount of cash I highly doubt you can see an "profit" within 30 days...

    If you wish to know what experience I have then please PM me!

    Any how we/I havent seen any of this "30 day" profit making scheme.

    Or of course do you mean turning a profit from a $10 master reseller account, Am thinking more along the lines of quality hard ware, dedicated servers with cPanel licenses, CloudLinux, You know a "REAL" hosting platform...

    Quote Originally Posted by ishan View Post
    +1
    Being profitable from first month is the major reason we have so many new hosts coming up everyday. If there was some entry barrier like capital investment web hosting wouldnt be as competitive as it is now. This is unfortunately true with almost all service related businesses.
    And how many of these "hosts" are just using reseller accounts or low end VPSes...

    Like I previously said seeing a profit from a master reseller account isnt the same as seeing a profit from a dedicated server with licenses, etc...

    Their is a reason why LEB has a dead pool and theirs a reason why so many sell up here on WHT...
    Last edited by Server Management; 12-18-2011 at 02:49 PM.
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  18. #18
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    Without getting into an argument. It is the same thing. If a $10 reseller is making $200 a month then that is a profit.

    Yes if you invest thousands into proper platforms your profit is going to be more.

    But profit is profit.
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  19. #19
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    Quote Originally Posted by TenNet View Post
    Without getting into an argument. It is the same thing. If a $10 reseller is making $200 a month then that is a profit.
    But thats from a $10 reseller account and no the whole $200 will not be profit...

    Dedicated servers with licenses, etc will exceed $200 to run, etc

    Quote Originally Posted by TenNet View Post
    Yes if you invest thousands into proper platforms your profit is going to be more.
    Depends, Theirs alot of factors.

    Quote Originally Posted by TenNet View Post
    But profit is profit.
    Correct but what am saying is that trying to turn a profit from a $10 reseller account is much easyer than trying to turn a profit from a $200+ dedicated server with licenses...
    Last edited by Server Management; 12-18-2011 at 03:04 PM.
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  20. #20
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    So to get back on topic, there is money to be made from web hosting, the easy and quick route being reseller.
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  21. #21
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    Quote Originally Posted by cd/home View Post
    But thats from a $10 reseller account and no the whole $200 will not be profit...
    Depends on the definition and understanding of the terms making, turnover, and profit
    Many people post about making $200, but do not take into account the costs, and there will be more than the $10 reseller account...
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  22. #22
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    After your initial setup costs, lets say first month:

    £20 reseller account
    £100 domain reseller credits
    £300 design services

    Month by month after that with no advertising costs would rarely go above lets say £50.

    On a reseller account of course.
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  23. #23
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    If you are creative with your business ideas there is certainly money to made you just need to find a unique selling point that you can provide.

  24. #24
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    Nope, no money at all, better quit now.

  25. #25
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    Whilst your costs and barriers to entry will initially be lower as a reseller, surely it is harder to differentiate yourself?

    Gavin
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