Looking for advice on pricing shared hosting plans
Hi there I'm new to WHT and I am trying to figure out a good way to price shared hosting plans to build my web hosting company up.
I started out doing websites for some clients for about 2 years ago and now have built up a steady cash flow and monthly recurring income from the websites but that was with offline customers and local businesses who paid more for my business to host the sites and offer support.
Recently we have been trying to shift from the web design over to mostly a complete hosting and web solutions company to sell domains, hosting, SSL, backups, and anything else a web customer could need. I have been looking at literally hundreds of other hosts, websites, and pricing plans. I just don't seem to get it. How can they offer such cheap pricing with unlimited hosting and be able to even cover the cost of server, billing/support software, yet alone make money in your pocket or pay for employees? Also I see many offer 24/7 support too. How is this even possible for a small hosting business?
I wanted to offer some plans at $10, $20, and $30 per month for web hosting but I'm not sure what all features have to be included or if that is too high of a price considering all the other web hosts just charging like $3.95 or $4.95 for "unlimited" packages.
If anyone can help or offer advice that would be awesome! Thanks!
"Unlimited" anything as far as a finite server resource goes is complete BS. There are limits in place and it's misleading marketing in my opinion. There MUST be limits in place as it's simply impossible to offer an unlimited amount of a resource that is finite.
"You get what you pay for." is extremely true in the hosting industry. In formulating pricing, consider your costs (be sure to include some hourly amount for your own time) and consider the added value you are delivering to clients that choose to host with you. Price your services accordingly.
However, keep in mind that you will need to be able to explain why it makes sense to go with you rather than an "unlimited" hosting package with 24/7 support at $3 per month. The answer is another old adage. "If it seems to good to be true, it probably is."
For pricing, choose a market (budget, premium, business, etc), then look at your competitors for that market, look at what they charge for what specs.
Then look at what you provide in each package, then work out your price to be competitive if you can, or around the average price.
Eg they provide 1GB Diskspace, 10GB Bandwidth for say $2. Well how much do you pay approx, then work out if you could do $2, or even $1.50 or $1 without going bust.
Maybe you include a backup service, now will you charge extra for it because it costs you, or include it free, everything adds up. Add that / remove that from the price.
Then come to the conclusion of the price. People who use Unlimited are gullible, who don't read the terms and conditions, skip that market if you can because people want to trust their host, not find out hidden information hidden away where people don't look.
Good luck with your business.
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I couldn't agree more with what has been said here already. I HATE it when I get asked for something like UNLIMITED Bandwidth or UNLIMITED disk space...THERE IS ALWAYS A LIMIT lol. Even the Datacenter the server is in has a limit of how much bandwidth they have coming into the facility. Also, YES 100% true that in the hosting industry you really do Get what you pay for. So, figure out the cost of the server and try to get that covered in the first 6 - 12 months, once that is covered you could look at offering those customers discounts for being with you for so long.
IF you are able to let the customers know that you are willing to give them the needed support they would be willing to pay a premium for good service.
If someone wants a $2/month unlimited plan I am sure they will soon find the provider is cutting corners someplace and they will probably get lower end support than what you would be willing to provide.
Rule of thumb I have always used. You can pick 2 of the 3.
1. Do you want your service to be GOOD
2. Do you want the service to get setup and online FAST (more so when setting up dedicated servers)
3. Do you want it to be Cheap.
Wow thank you guys for all the quick replies and information!
I currently have 2 VPS servers for hosting client accounts and use WHMCS for billing/support. I have about 13 clients on the server right now and it has turned a steady profit each month. I used to use a reseller account but I didn't like the fact that I didn't have complete control of everything so I switched to VPS.
Little did I know, the more expensive VPS plan also came with more expensive software licensing lol. I ended up having to pay more than I thought because I signed up thinking that if reseller came with all these things, then the higher up VPS plan SURELY had to have that plus more.
So all in all it turned out to be a little more expensive but I am now able to regulate everything such as backups while still being able to turn a decent profit with the clients I have now. I'm really just trying to reach my first 100 clients on the server at this point but it's just so slow acquiring customers.
I'm still not completely satisfied with my own website though either it's a lot of work more than I thought!