Just curious, trying to build some kind of ratio I can use for future projections.
Your projections will clearly depend on what you will have to work with. If you want to keep it simple lets take for example that you start off with a reseller account.
This reseller account offers 20GB of disk space and 200GB of monthly transfer.
If you work out that your first plan will be 200MB in space and 2GB of transfer priced at say $8.99 a month that would mean you may host: 100 clients at this plan. Of course 100 clients would consume the entire space, however, say the reseller account costs you $50USD a month that's $9USD x 100 = $900USD a month minus $50USD for the reseller account that would be a good return of $850USD. This is of course not including advertising costs etc. Neverthless, if you are able to obtain 100 clients and retain them than you can look at a steady $850USD a month.
Nevertheless, if you break it down so you have three plans
200mb / 2gb transfer
500mb / 10gb transfer
1000mb / 15gb transfer
These would all depend on you of course. Personally I wouldn't offer crazy space and bandwidth and cheap hosting. There would really be no point of even doing web hosting. Say you had the first plan of 200mb / 2gb transfer at $2.99 a month that would be $300 a month compared to 900. That means you would need 300 clients to make 900 a month which in turn would create more work for you in the support/customer service area.
Nonetheless, if after a year you are able to build your client base ie: 1000 clients and your pulling in a steady $7000 a month, these are just estimates than you could start making deals like the big boys. It all depends on what you want.
Sorry for the disorganized post, i'm at work and replying here at the same time. I hope this cleared things up a bit. I'm sure someone else will explain things in greater detail.
I think it would be better to be patient and get clients at a higher price than a bunch of clients at a cheaper price. It will pay off in the long run and to me seems more professional. Such cheap hosting, for me atleast, creates an atmosphere that the company isn't confident in their work so they have to charge cheap prices. That's like you accepting a job for 40Gs a year which really pays 50Gs. To the person hiring you it will be like, okay this person is not confident in their work so they'll take the same job for cheaper. (may be a lame analogy) sorry.
Your post was great! I love long well written replies like that.
Total agreement here. I would much rather make the same amount from 20 customers or even 10 than making it from 100 of them. Less customers = better support that I can give because of less hassle = the higher price is worth it to them.
I am not Wal*Mart and I am not willing to enter Commodity Hell. In Commodity Hell, everyone looks the same. Your products look the same, your margins look the same, and-- wait a minute, where did those margins go? We hear they were spotted in shanghai.
Even though wallyworld is trying to herd everyone else there with a pitchfork..
Happy to find a person in the same situatio as myself. Me too in a fix as to decide with reseller accounts. Did you start off with the same? I would like to know more about your experiences , only if you wouldnt mind sharing them.