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  1. #1
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    Resellers and silly prices

    This post is not pointed at anyone in particular, but it`s been bugging me for some time.

    I`ve noticed a trend in recent months for new resellers to start up, and charge dirt cheap prices for large amounts of space and bandwidth. Is it just me, but what is the point of trying the compete with the big boys?

    Surely it is pointless for resellers to charge a couple of bucks for a hosting package, where is the profit in that? Especially considering you are paying out for your own hosting, billing software, maybe merchant account and all the other stuff. It just seems more trouble than it`s worth, especially if you offer nothing but hosting.

    Personally I charge a good deal more than the big boys, because I focus on my local area and justify the higher prices by one on one sales and support, phone calls etc. Resellers have to charge higher prices to make the whole darn thing worth it?

    Surely I`m not alone in that thinking

  2. #2
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    No.. a lot of companies that do that are kiddie companies. They love to make 5 dollars so that they can buy more at tomorrow's lunch!

    To be honest though, I know what you mean. It really is bad, especially now.
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  3. #3
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    It's summertime. Happens every year. Just keep doing whatever you do and things will work out.
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  4. #4
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    You will notice that most of these "ultra-cheap" companies selling shared and reseller hosting for next to nothing, are not around in 12 or even 6 months time.

    I mean lets face it, when you consider a decent server and CP is going to cost you ~$120 per month and then you have your billing software, staffing costs, maintenance costs, business costs and the personal cost to yourself in time, it would be extremely hard for many of these companies to even think about making a profit.

    99.9% of the time, with ultra-cheap hosts you will get:

    Overcrowded servers
    Non 24/7 technical support (in most cases a few hours a day)
    Servers that have a lot of security flaws due to lack of updates

    And then after a few months, your website suddenly dissappears off the face of the earth, as does your web host.

    So its really not worth the risk.

    I think clients are becoming a lot more aware nowadays that price is not everything. They seems to understand a lot more that quality and the backup when you need it most comes at a cost. Whilst the cost is not "ultra cheap", it is fair.

    And to be honest, I would rather clients who are interested in getting a good service and paying a fair price for it rather then just looking for the lowest price plan they can find....
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  5. #5
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    Originally posted by UK PC Net Matty
    Non 24/7 technical support (in most cases a few hours a day)
    Also lower quality, don't forget that!
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  6. #6
    Originally posted by pixelized
    It's summertime. Happens every year. Just keep doing whatever you do and things will work out.
    Pardon my ignorance but how significant is this trend? I mean in terms of percentage ... approximately.
    "Glory to God in the highest, and on earth peace, good will toward men."

  7. #7
    Over 85% of web hosts are doing it.

    That is of course if you consider someone with an eBay sourced resale account as running a "hosting business"

    a) Get on eBay, pick up a .99c unlimited reseller account
    b) Get on TemplateMonster, get a 44$ template
    c) Get a domain, 9$

    And all of a sudden it's possible to compete with real companies!

    This is the only industry where the end user cannot see if someone is "real" or not without some heavy investigative work. Anyone can put up a nice web site and pretend to be a company. Trick is, to know how to spot these and avoid them like the plague.

    Funny to think that I have so many discussions with people about SCSI vs IDE, HP vs whitebox, and then someone can come up with a .99c reseller account and attract the same clientelle we will due to a 1.00 per month lower price.

    Amazing.
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  8. #8
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    Yeah, I guess in some ways it`s just as well these hosts that offer the dirt cheap prices dissapear after a few months.

  9. #9
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    WHY is it that when someone offers lower prices you all get defensive and consider them kiddie companies.... are you that worried?

    I myself am in the process of starting a webhosting company and I WILL be offering 10GIG space and 100GIG transfer for 25/month for resellers, it will be running on direct admin and I will offer the best support I can.

    I WILL NOT OVERSELL... so their getting what their paying for.... Of course i have dedicated server and billing software..... but what does it matter.... I probably wont make as much profit as all the other companies but as long as I break even and costumers are happy what else matters ... word of mouth spreads around.


  10. #10
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    Sep 2003
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    Originally posted by pixelized
    It's summertime. Happens every year. Just keep doing whatever you do and things will work out.
    Hilarious! Same thing happens every year at the domain forums.

  11. #11
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    Originally posted by BoggeRs
    I myself am in the process of starting a webhosting company and I WILL be offering 10GIG space and 100GIG transfer for 25/month for resellers, it will be running on direct admin and I will offer the best support I can
    We never said that would be overselling. The main point is that some companies do this for a living. Whether they eat or not depends on if they keep their customers. Some companies work very hard with extremely long shifts just to keep the customers they have. For some people lower price is fine, for others they want to pay for quality. If you can show me a place where I can get 10 GB of space and 100 GB of transfer for 25 a month with 24/7 support and 10 minute response times (and over 99.9% uptime) with no overselling, I'm completely all ears.
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  12. #12
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    Originally posted by RefreshNet
    We never said that would be overselling. The main point is that some companies do this for a living. Whether they eat or not depends on if they keep their customers. Some companies work very hard with extremely long shifts just to keep the customers they have. For some people lower price is fine, for others they want to pay for quality. If you can show me a place where I can get 10 GB of space and 100 GB of transfer for 25 a month with 24/7 support and 10 minute response times (and over 99.9% uptime) with no overselling, I'm completely all ears.
    ummm my server has been up for 2 weeks and i have 100% uptime thanks to site stats .... and 24/7 support and 10 min response is inposible for me.... I WILL ANSWER ALL EMAILS within 12 hours.... I am a full time cobol programmer to have food so that kinda takes alot... BUT i have NEVER seen 10 minute response after the customer signs up so I should be ok Im not bashing just saying in personal experience before i sign up its 5 min and after its 3 days .... so

  13. #13
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    I'm glad you see my point 12 hours isn't exactly 10 minutes, if you want high quality you have to pay the price.

    (Just to clarify, I use a host with 24/7 10 minute response time and 99.9% uptime, but it certainly isn't in that price range -- I pay $20 a month for 1 GB space / 20 GB transfer (reseller))
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  14. #14
    15 minute response time is a little more reasonable and is what the higher end hosting providers offer with their services.

    As is with everything you get what you pay for and when your cheap your resting your entire business on that.

    Regards,
    crisper

  15. #15
    There is a term in management that describes this; it's called the "wheel of retailing."

  16. #16
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    You guys should love the summer hosts , they come in scoop up some people who think hey, ill throw a 2 bucks away, find out they like it and can make some money, and more importantly they find out how bad their host is and bam, new customer for everyone else! Plus it makes all the good hosts look even better compared to a summer host...
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  17. #17
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    Originally posted by bwb
    You guys should love the summer hosts , they come in scoop up some people who think hey, ill throw a 2 bucks away, find out they like it and can make some money, and more importantly they find out how bad their host is and bam, new customer for everyone else! Plus it makes all the good hosts look even better compared to a summer host...
    If only it were that easy. It's more along the lines of some of them give up with hosting in general after they "get screwed" with one. Sadly it does happen that way as well :/
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  18. #18
    Originally posted by RefreshNet
    Also lower quality, don't forget that!
    \

    Where's the start button? And why doesn't ctrl-alt-delete let me stop apache!!~!!1111oneone!111.


    That's always comforting to hear.

  19. #19
    What do you guys think of Verizon Fios and people hosting on that

  20. #20
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    Originally posted by BoggeRs
    ummm my server has been up for 2 weeks and i have 100% uptime thanks to site stats .... and 24/7 support and 10 min response is inposible for me.... I WILL ANSWER ALL EMAILS within 12 hours.... I am a full time cobol programmer to have food so that kinda takes alot... BUT i have NEVER seen 10 minute response after the customer signs up so I should be ok Im not bashing just saying in personal experience before i sign up its 5 min and after its 3 days .... so
    I'm not sure if you see the irony here. We're trying to say that companies who charge these rates either don't make a profit, or provide sub-par service. You're saying that you can do it anyway.

    Now look at what you're saying:
    * A lot of "I will"s... can you point us to an "I have"?
    * You have to work another job to support the hosting company. It should be able to run on its own if you are charging reasonable rates.
    * 12 hours is not acceptable for support. I would expect no more than a 1 hour response with a decent hosting company.
    * 2 weeks of uptime is not a lot of uptime. When your server has been up for several months without issue, then you might have a decent uptime.
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  21. #21
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    Originally posted by gbaxley
    What do you guys think of Verizon Fios and people hosting on that
    It's a residential service, and as such, shouldn't be used for hosting.
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  22. #22
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    Originally posted by gbaxley
    What do you guys think of Verizon Fios and people hosting on that
    No one in their right mind would trust their website to a FIOS based host. It's a residential service aimed at home surfing.

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  23. #23
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    Originally posted by BoggeRs
    WHY is it that when someone offers lower prices you all get defensive and consider them kiddie companies.... are you that worried?
    Yes I'm worried, worried about yet another batch of potential customers pissed off at web hosting companies in general because they hosted with some fly-by-nite operation that sold them the world for a few bucks a year and then disappeared after a couple of months. Man if I had a $1 for every "is your company really stable" email I got while Cyberwings was going bust I'd have a big stack of dollars.

    I myself am in the process of starting a webhosting company and I WILL be offering 10GIG space and 100GIG transfer for 25/month for resellers, it will be running on direct admin and I will offer the best support I can.
    And how many clients you gonna put per server? You know there's more to overselling than how many gigs EV1 (or other) gives you with your server? That 1000 gigs you know that's a pipe dream for shared hosting right? You push more than about 150 gigs of "shared" traffic through your average server and it's gonna be huffing and puffing like a fat man running after the ice cream truck.

    I WILL NOT OVERSELL... so their getting what their paying for.... Of course i have dedicated server and billing software..... but what does it matter.... I probably wont make as much profit as all the other companies but as long as I break even and costumers are happy what else matters ... word of mouth spreads around.

    [/B]
    Yes, you will oversell. Don't even think of denying it, all hosts oversell to a point, you have to it's stupid not to oversell TO A POINT. And let me fill you in on a little secret, successful businesses don't "break even" they make money, or they go away.

    It's unfair to your potential customers to have to sit on their hands while they wait on you to "get off of work" (replace get off of work with get out of school and you have a kiddie host in every sense of the word).

    If you just need a part time job to keep you business, think about delivering pizza or maybe working for an established host who won't mind that you only have a few hours a day to devote to hosting.
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  24. #24
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    You know what everyone is forgetting something.... before all of these big shot web hosting businesses became big guess what they were small and probably the owner was working to keep food on the table and then finaly the company was able to stand on its own feet. So i dont want to hear everyday... because it wouldnt be everyday if it wasnt paying your bills:

  25. #25
    In my humble opinion, any businesses including the webhosting companies, are obligated to provide a certain level of commitment and responsibility to their clients in return for the fee collected. I would think that charging a smaller fee would be fine provided the client is made fully aware of the level of service they're getting upfront.
    "Glory to God in the highest, and on earth peace, good will toward men."

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