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  1. #1

    Question That Ponders Everyone - Is Two Cheap REALLY to cheap?

    There is a question that ponders everyone out there, if it is too cheap is it too good to be true?

    After doing basic math and research on many companies I feel this would be the case.

    ex: Nocster Servers -- Price has been right but always down?
    I am Interested in AngelNetworkz but before I buy I just would like someone elses point of view on this.. as I don't see how this is all possible, The reviews on WHT are flawless......

    AngelNetworkz who is hosted by Managed.com are selling servers for $75.00 for an athlon 2000 xp with cPanel (from managed.com direct it is $78.00) and did a recent offer with buy one month get one free up to 6 motnhs. After I did basic research it seems they cheapest they could be getting this for is $72.20 a month so after paying (managed only offers a 10% reseller discount they told me once you hit 20 servers), and they only take paypal, They are in return selling a server for 37.50 a month, this in just not possible they are taking a 37.50 a month loss in a sense after paypal fees how can one survive it only scares me. Are they just getting a large amount of business, barley surviving and than one month just going to pick up and leave with 30k in their pocket?

  2. #2
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    After I did basic research it seems they cheapest they could be getting this for is $72.20 a month so after paying (managed only offers a 10% reseller discount they told me once you hit 20 servers),
    That's what Managed.com tells you. What happens when you have over 100 servers and a VERY strong relationship with a company though? Donna knows what she's doing, at least the last time I checked. I don't agree with the pay for up to 6 months, get up to 6 months free business plan, but if it works for them, I guess take a stab at it. AngelNetworkz is a great company, I use their services a few times per year.

    - Matt

  3. #3
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    Matt is right, there are resellers and then there is buying bulk. Buying bulk can get you some favorable terms, but you better have deep pockets to do it.

  4. #4
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    Originally posted by mainarea
    ........I don't agree with the pay for up to 6 months, get up to 6 months free business plan, but if it works for them, I guess take a stab at it........

    - Matt
    If your business grows each month exponentially, what is to agree about it? This means that said company will never have to borrow against it's assets. Just plug some numbers into your BAII for fun.......makes a nice accounting project.

  5. #5
    I spoke to a guy at EV1 and he said that they will buy as many servers as she has for $37.50, as their cheapest price for cpanel is $9.99. That leaves them with getting a server for less then $30 with 1000GB's, cpanel, and they are MANAGED! No need to fight, I just can't figure this out....I have searched this board for a few weeks and saw all these post by the "leaders" saying bandwidth should be multiplied by this and that. Where are you guys now? Do you think they are getting a server+bandwidth+cpanel+co-lo cost for $37.50? If so, please let us in on the secret and I guarantee I will buy 200 right now @ $37.50/mth!

  6. #6
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    Originally posted by httpd444
    I spoke to a guy at EV1 and he said that they will buy as many servers as she has for $37.50, as their cheapest price for cpanel is $9.99. That leaves them with getting a server for less then $30 with 1000GB's, cpanel, and they are MANAGED! No need to fight, I just can't figure this out....I have searched this board for a few weeks and saw all these post by the "leaders" saying bandwidth should be multiplied by this and that. Where are you guys now? Do you think they are getting a server+bandwidth+cpanel+co-lo cost for $37.50? If so, please let us in on the secret and I guarantee I will buy 200 right now @ $37.50/mth!
    You are ASSUMING they are paying ~38/mon per server, which could be way off depending on the term they are looking at to pay back the hardware ...

    This varies from business to business, some companies like 4-6 months, others will allow upto 12 months - which would mean they can offer lower prices based on that.

    Besides, asking a competitor about another ones service is never a good idea - you will always get the "we are better" approach.

    I very much doubt AngelNetworkz are going to get up and walk away with your money, would you really sacrifice years of work for 30k?
    ^^ IM WITH STUPID!! ^^

    "The only way to overcome fear, is to challenge it head on"
    "The quickest way to get over a woman, is to get under another"

  7. #7
    With it said from everyone above, a better question is this.... You email their provider managed.com see whats the best they will give you on a 500 peice order. Bandwidth alone on the gigabit level is 25-32 dollars a month per megabit. 25 being cogent on average! Now lets do the math

    If 10mps is 3300gb transfer than it is ruffly 3mb/s for a monthly transfer for 1000 gigbits, they are already taking a lose at 58 a month for an athlon come one now if angel steps in and does a buy one get one with some idiots paying up to 6 months in advance, she can clean up some good money and leave the game. It has been done before... I can see it happening again... I am not implying she will but It seems to be the routine. with professional scammers on the web hosting level.


    So lets say if managed was giving her even a 25% discount which I doubt as the larger the discount it is not worth them hosting her and they do not do colo.

    43.50 per month for the server plus cpanel = 63.50 if she is using softwareworks.

    She is selling them for 75 with cpanelat buy one get one month free (or was at least)
    75 /2 = 37.50 per month - 20 for cpanel = 17.50 per month per server. You can not even lease boxes from dell that cheap if you buy in very large bulk or import items from china and pay off the credit line.

    So for all those who think she can do this think ago and come back to this thread complaining on how you lost 450 dollars for 6 months of hosting you never received!

  8. #8
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    It's called overselling. Most of those server will most likely never hit 50GB bandwidth, maybe 100GB max. Don't speculate on this, you have no idea how Donna's pricing works, or what kind of deal she has set up with Managed.com. You could try to figure out my prices that I get from Nocster, but completely neglecting custom deals that I make, you could be far off (over or under our cost).

    If Donna is willing to take a small loss upfront to gain a lot of new clients, then it's a risk that she's obviously willing to take. Her prepayment deals seem to work pretty well for her. Also, her company does more than just reselling servers. Her company is very solid, and I have no hesitations on asking Donna to provide some services for me occasionally during the year.

    - Matt

  9. #9
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    Also, Donna has NO intention of leaving the game. The plans that I've heard of so far entail a large expansion

    - Matt

  10. #10
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    With those deals I'd be more worried about managed.com's finances than Donna's...
    Karl Zimmerman - Steadfast: Managed Dedicated Servers and Premium Colocation
    karl @ steadfast.net - Sales/Support: 312-602-2689
    Cloud Hosting, Managed Dedicated Servers, Chicago Colocation, and New Jersey Colocation
    Now Open in New Jersey! - Contact us for New Jersey colocation or dedicated servers

  11. #11
    the only thing i will say about this is: there are a ton of much more fun ways to burn through a lot of money than offering $50/mo servers or whatever managed sells them at.

    paul
    * Rusko Enterprises LLC - Upgrade to 100% uptime today!
    * Premium NYC collocation and custom dedicated servers
    call 1-877-MY-RUSKO or paul [at] rusko.us

    dedicated servers, collocation, load balanced and high availability clusters

  12. #12
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    it could be she has made a deal with managed.com to get only something like 200gig per server of traffic, and then she will pay the charges for the servers that go over, taking into account the argument of her overselling.

  13. #13
    Greetings:

    “Question That Ponders Everyone - Is Two Cheap REALLY to cheap?”

    Well, really two heads are better than one, so two cheap providers would be….

    If you look at companies that sell what Wall Mart sells in terms of the overall number of companies in the entire industry (forget price; just sell what they sell); and, then compare that number to the number of companies that compete in Wall Mart’s area of price, what’s the ratio?

    Personally, I’ve not done the numbers; but my guess is that you have thousands of retail stores (going by brand, not just by store count), but probably a score or so that compete in Wall Mart’s pricing spectrum.

    If my guess is true, why aren’t the other stores competing on price?

    In my opinion, competing on price is far more risky than competing on value; anyone with financial backing, enough working capital, or just plain perseverance (as long as the money lasts) can beat you on price.

    The lower the margins, the less you can invest back into the business for being able to handle the future needs of the business, the less you can invest in the people running the business, etc.

    Eventually you get to the point of such diminished returns there is no value there for the customer.

    Thank you.
    ---
    Peter M. Abraham
    LinkedIn Profile

  14. #14
    I hate to bring this back up during hard times, but it shows how some people should not be so quick to defend a company when they are offering servers for $30 per month. My partner made this post in May to try and alert those who were falling for this. That is exactly what this board is here for. When someone comes out and asks a simple question, we need to all sit back and ponder on what we are doing instead of jumping to the defense of someone. As said before, if you can buy a server WITH cpanel for only $30 per month, lets rethink the old saying "Too good to be true".

    I am not trying to stir up problems, and I know this does not help those who are down. It is just very disturbing that these companies that are held in high regard here are shutting down, stealing money, etc, etc. But those you see put down on are still here 1,2,3, ....5 years later. I think this whole situation will help many understand to not trust every username they see, as Angel had at the minimum of 9 - 10. Weird they all took up for her and praised her

    I am very sorry for you guys who are down, but sometimes we all need a little "I told you so".

  15. #15
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    When you buy in bulk and establish a good relationship with a provider, prices are more than just a percentage of discount. But rather, the companies make deals such as replacing the need of support for all servers, saving managed.com money. Also by doing this it eliminates the need for managed.com to do any marketing for these servers so it's like saying that the discounts are considering their marketing fees. All these things come into play when it comes into resellers. If you resell huge, you can underprice the direct provider, but if you're doing just a few servers, good luck. AngelNetworkz definetely has 100s of servers in flow though...

  16. #16
    LOL.. We have many servers in "flow" and basically offer some of the lowest prices for dedicated servers. But we could never offer a server with cPanel for $30 nor could the datacenter ITSELF.

    Also, you said "AngelNetworkz definetely has 100s of servers in flow though" Actually, they have no servers in FLOW currently at Managed.

    I do not want to say that you are confused, but would like to hear from any company that has a total overhead of $10 per month per server with 1000GB bandwidth.

    Also, one last question. Why should we make judgment on a company offering 5GB space and 100GB bandwidth for $19.99 if we can TRULY believe that you can buy servers for $30 with 120GB HDD and 1000GB Bandwidth? I am just confused with all the contradiction.

  17. #17
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    Good job httpd444 in predicting the future. Even if AN gets back online, their performance with server uptime is ruining the reputation of all hosting companies and resellers in particular.

  18. #18
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    Originally posted by httpd444
    LOL.. We have many servers in "flow" and basically offer some of the lowest prices for dedicated servers. But we could never offer a server with cPanel for $30 nor could the datacenter ITSELF.

    Also, you said "AngelNetworkz definetely has 100s of servers in flow though" Actually, they have no servers in FLOW currently at Managed.

    I do not want to say that you are confused, but would like to hear from any company that has a total overhead of $10 per month per server with 1000GB bandwidth.

    Also, one last question. Why should we make judgment on a company offering 5GB space and 100GB bandwidth for $19.99 if we can TRULY believe that you can buy servers for $30 with 120GB HDD and 1000GB Bandwidth? I am just confused with all the contradiction.
    You have much to learn my friend. I dont think anyone said $30 exactly for a server? The things i've read was that they were at $37.50 for a temporary amount of time. A lot of companies underprice things and then don't put any money into advertising, but rather have the underpricing do the advertising for them.

    As for my pricing, we can sell at these prices because it works for us. We are able to mass sell this package. Also it is not 5 GB space and 100 GB transfer but rather 2 GB space and 100 GB transfer. By offering a lower amount of disk space, and hiking the price up for upgrading, it ensures that people wont easily be able to use 100 GB transfer unless they needed to. But we still keep server resources to a minimum.

  19. #19
    I think you may have a lot to learn. You have to know what you are doing, or you end up just like Angel and can't pay your bills. I did not ever point to you or anyone else, I was taking up for resellers. But $37.50 for a server with all features does exactly what it has now.

    Angel has now suspended all of those deals so she can pay the bills.

  20. #20
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    httpd, can I hire you as a fortune-telling consultant?

  21. #21
    YES!! I can do it for $37.50 per month. I may be able to even offer buy 1 get 1 free after a month or so.

    But if anything messes up, I will simply blame WHT and you will have to deal with it

    **Sorry for the sarcasm***

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