Results 1 to 20 of 20
  1. #1

    Is this a good business model?

    A while ago, I noticed this reseller posting regularly on our Hosting Offers Forum - existed then but appears to have been discontinued? - with some interesting hosting plans:

    One-Time Fee Plans
    1000MB 6GB BW @$21.99
    2000MB 10GB BW @$29.99 and other incremental configurations
    featuring cPanel 9 + Fantastico DeLuxe, unlimited POP3 email accounts, unlimited FTP Accounts, unlimited Subdomains, WebMail Access, PHP, CGI, Perl, MySQL, Search Engine Submission, pre-installed Scripts, FrontPage Extensions, Real Time Stats, 24/7 Support.

    Shared Plans
    2000MB 30GB BW @$2.99/mth or $19.99/yr
    4000MB 40GB BW @$6.99/mth or $39.99/yr and other incremental configurations with the same features as above.

    My question: Is it viable if one were to offer similar packages and what implications will it have on staffing and support? And how much will it mean in terms of overselling - I do believe that this particular host would definitely have to oversell?

    Would someone who are aware of the intricacies of this business kindly help provide some answers? Thanks!
    "Glory to God in the highest, and on earth peace, good will toward men."

  2. #2
    Join Date
    Feb 2002
    Location
    Australia
    Posts
    24,009

    Re: Is this a good business model?

    Originally posted by qoheleth
    One-Time Fee Plans
    What exactly do you mean by that?
    AussieHost.com Aussie Bob, host since 2001
    Host Multiple Domains on Fast Australian Servers!!

  3. #3
    Join Date
    Sep 2003
    Posts
    1,915

    Re: Is this a good business model?

    Originally posted by qoheleth
    Shared Plans
    2000MB 30GB BW @$2.99/mth or $19.99/yr
    4000MB 40GB BW @$6.99/mth or $39.99/yr and other incremental configurations with the same features as above.
    I'm no hosting business expert but how could those prices even cover the bandwidth?

  4. #4
    Join Date
    Dec 2004
    Location
    Toronto, Ontario, Canada
    Posts
    285
    This is more of a package plan model then a business model.

    Personally, I think his packages are under priced.

    2000MB 30GB BW @$2.99/mth or $19.99/yr

    Unless this is 30GB of BW for the year and it works out to 2GB a month. Otherwise, 30GB BW at 2.99 a month or $20 a yr is ....speechless.

  5. #5

    Re: Re: Is this a good business model?

    Originally posted by Aussie Bob
    What exactly do you mean by that?
    From what is said on their site, it probably means the client needs only pay the listed fee once and get hosting for life.
    "Glory to God in the highest, and on earth peace, good will toward men."

  6. #6
    Join Date
    Jun 2003
    Location
    UK
    Posts
    6,601
    The one time fee can be good to get initial cash from customers to help a company startup but long term wise its not vialbe unless you charge huge amounts upfront. Overall its nothing something that will work as you would have ongoing costs but no income from customers..

    Rus
    Russ Foster - Industry Curmudgeon

  7. #7
    Join Date
    Jun 2003
    Location
    UK
    Posts
    6,601
    The one time fee can be good to get initial cash from customers to help a company startup but long term wise its not vialbe unless you charge huge amounts upfront. Overall its not something that will work as you would have ongoing costs but no income from customers..

    Rus
    Russ Foster - Industry Curmudgeon

  8. #8
    Originally posted by UniServe Hosting
    Personally, I think his packages are under priced.
    2000MB 30GB BW @$2.99/mth or $19.99/yr

    Unless this is 30GB of BW for the year and it works out to 2GB a month. Otherwise, 30GB BW at 2.99 a month or $20 a yr is ....speechless.
    It is 30GB BW per month.
    "Glory to God in the highest, and on earth peace, good will toward men."

  9. #9
    is there a setup fee?

  10. #10
    Originally posted by vaserv
    The one time fee can be good to get initial cash from customers to help a company startup but long term wise its not vialbe unless you charge huge amounts upfront. Overall its nothing something that will work as you would have ongoing costs but no income from customers..
    Rus
    I thought so too but was thinking I might not have enough specific experience to be certain. Thanks.
    "Glory to God in the highest, and on earth peace, good will toward men."

  11. #11
    Originally posted by PCXFX
    is there a setup fee?
    No setup fee.
    "Glory to God in the highest, and on earth peace, good will toward men."

  12. #12
    Do you think they could have been hosting with their own servers? If so, could that have helped them get by on such offers?
    "Glory to God in the highest, and on earth peace, good will toward men."

  13. #13
    but paying for an ISP with that much bandwidth would be expensive.

  14. #14
    Join Date
    Dec 2004
    Location
    New York, NY
    Posts
    10,574
    It's no surprise that they no longer exist

    --GSV
    MediaLayer, LLC - www.medialayer.com Learn how we can make your website load faster, translating to better conversion rates for your business!
    The pioneers of optimized web hosting, featuring LiteSpeed Web Server & SSD Storage - Celebrating 10 Years in Business

  15. #15
    Join Date
    Jan 2002
    Posts
    1,033
    I could offer slews of storage space and bandwidth for cheap if I wanted to. Why don't I? Its simple economics...businesses should maximize their profits. I can get customers in the masses by offering unbelievable deals but in the end I can make more money by effectively pricing and targetting. I may have fewer customers but make a lot more money than a comparable host offering these "unbelievable" packages that has more customers. Also, it might make sense to do something crazy for a *limited* time but you should plan for the longrun (especially if you are serious about running a company).

  16. #16
    there is no way you can offer one time fee plans this is just like unlimited space and bandwidth. People who offer one time are just trying to get your money and run! You can't keep hosting someone site for only $20 bucks or whatever and they never pay again.

  17. #17
    Originally posted by PCXFX
    but paying for an ISP with that much bandwidth would be expensive.
    I see.

    Originally posted by elix It's no surprise that they no longer exist
    They're actually still around, although I remember the owner was once looking for part time desk support work on this forum.

    Josh Stein I could offer slews of storage space and bandwidth for cheap if I wanted to. Why don't I? Its simple economics...businesses should maximize their profits. I can get customers in the masses by offering unbelievable deals but in the end I can make more money by effectively pricing and targetting. I may have fewer customers but make a lot more money than a comparable host offering these "unbelievable" packages that has more customers. Also, it might make sense to do something crazy for a *limited* time but you should plan for the longrun (especially if you are serious about running a company).
    So, it's possible then for them to get by, probably only in the short term. Yes, I think I can see your point - it does not seem to make good business sense.

    elected there is no way you can offer one time fee plans this is just like unlimited space and bandwidth. People who offer one time are just trying to get your money and run! You can't keep hosting someone site for only $20 bucks or whatever and they never pay again.
    Judging from what I had seen on WHT, I guess it would either mean that the host might compromise on support and service or possibly resort to terminating clients' accounts on the slightest 'default' to keep itself going? Or run as you've just said. Hmm ... I think I wont want to stoop that low.


    Thanks, folks, appreciate your feedback very much. If I may continue to tap on you folks' experience in the hosting business, is there a way whereby one may design packages with perhaps a combination of various elements, say for example, one-time fee with a low annual 'maintenance' fee? Or a similar 'unbelievable' fee, as quoted at the beginning of this thread, for maybe the first ... two years and then thereafter ...? Do you think clients would be receptive to such fee structures? Would there be any suicidal consequences on the part of the host?
    "Glory to God in the highest, and on earth peace, good will toward men."

  18. #18
    Definately not a model for business....if you want to be around for a while.

    The prices are too low and the one-time payment is a lifetime deal which doesnt sound too profitable overall.

    Look at what the big boys (and girls ) are doing and go for something similar.

    You really have to look at your target customers needs and price your services according to the type of customers you want to attract.

    If you want a high volume of low-payment customers and possibly high support levels - price low, otherwise price a bit higher and you have a better chance of surviving with a decent profit margin with a more moderate need for support.

    Just my 2 cents and I'm no pro but I know the business.

    LH
    If the web closed at midnight, what would YOU do?

  19. #19
    Originally posted by LadyHost
    If you want a high volume of low-payment customers and possibly high support levels - price low, otherwise price a bit higher and you have a better chance of surviving with a decent profit margin with a more moderate need for support.
    Thank you, mdm. You've provided the clarity I need on this aspect of the relationship between pricing and support overheads.
    "Glory to God in the highest, and on earth peace, good will toward men."

  20. #20
    Originally posted by qoheleth
    Thank you, mdm. You've provided the clarity I need on this aspect of the relationship between pricing and support overheads.
    Coolness. Glad I could help!


    LH
    If the web closed at midnight, what would YOU do?

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •