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Thread: Good Prices?

  1. #1
    Join Date
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    Good Prices?

    Hello,

    I'm starting my Web Hosting Company, and i have one question about my Plans and the prices:

    Budget Plan:

    200 MB of Disk Space, 2 GB of Data transfer and Unlimited Resources at $1.00 Per month, It is a good Price for this plan?

    Basic Plan:

    450 MB of Disk Space, 5 GB of Data Transfer and Unlimited Resources at $3.95 Per month, It is a good Price for this plan?

    Business Plan:

    1500 MB of Disk Space, 15 GB of Data Transfer and Unlimited Resources at $6.95 Per month, It is a good Price for this plan?

    Premium Plan:

    2500 MB of Disk Space, 25 GB of Data transfer and Unlimited Resources at $8.95 Per month, It is a good Price for this plan?


    Thanks for your Help ,
    Pickin

  2. #2
    Join Date
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    First, read this: http://webhostingtalk.com/showthread.php?t=526088

    My best advice is to pick another well reputed provider and try to become THEM. They've probably been in the industry much longer and know what kind of pricing they need to sustain a proper business, you should try and mimic how they handle things unless you know exactly what you want to do.

    What you probably want to hear - I don't think $1/month is going to get anywhere. If it's really monthly, factor in transaction fees and you're not making much. You'll need to charge yearly for that to get any money at all. Is that little amount really enough to cover for all the different costs?

    Just by looking at those, don't even bother with the first place, the $4/month price is still a bit small for a monthly account, but much better than $1/month. With what I just said, I did not even factor in how much space/bandwidth you're giving, you need to be sure you have the proper revenue coming in to sustain the business before you worry too much about how much space/bandwidth you're giving each client.
    Ankit Gupta - Cernax Hosting
    "We're always second in the industry, the customer comes first."

  3. #3
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    Salt Lake City, UT
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    same question..

    SB-1GB Storage/Unmetered Bandwidth ($7.95/mo)
    SD-3GB Storage/Unmetered Bandwidth ($14.95/mo)
    SP-6GB Storage/Unmetered Bandwidth ($24.95/mo)
    SE-10GB Storage/Unmetered Bandwidth ($39.95/mo)

    From my calculations, these plans seem to provide a good cashflow with great groth oppertunity. Any thoughts/suggestions?

  4. #4
    Hello,

    Determining what price is best depends a lot upon who your target audience will be.

    Are you attempting to sell to local retail businesses, e-commerce sites, medium sized companies, hobbyists, etc?

  5. #5
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    Ya as Cyber Mark said, you need to find your niche! You can't compete in the general hosting market with those offerings to some degree...

    If you focus your hosting to a smaller market it makes advertising cheaper, plus you can charge more and hopefully provide a better product tailored for your customers.
    Like passive recurring revenue you can retire on?
    You focus on building your brand, we handle all support, billing, and more.
    Pressed.net - Start your own Managed WordPress Hosting Company

  6. #6
    I think ankit is right, you need to factor in the transaction fees, monthly expenses u may inccure, break even at such low price point, etc

    if you offer large space size at sizable price and offer 1$ / month for 3 month types goddies for getting them to your site, it may make better business for you.

    Well !! personal view hmm

  7. #7
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    Quote Originally Posted by siforek
    SB-1GB Storage/Unmetered Bandwidth ($7.95/mo)
    SD-3GB Storage/Unmetered Bandwidth ($14.95/mo)
    SP-6GB Storage/Unmetered Bandwidth ($24.95/mo)
    SE-10GB Storage/Unmetered Bandwidth ($39.95/mo)

    From my calculations, these plans seem to provide a good cashflow with great groth oppertunity. Any thoughts/suggestions?
    I'm not sure unmetered bandwidth is such a good idea, their site may only need 500mb of disk space but traffic could increase a lot, what would you do?

    In order to properly bill them and get them in the right price ranges, bandwidth needs to be taken into consideration for the prices.

    If they used 40-50gb of bandwidth on the highest plan with only 500mb of disk space, they could move down to the $8 plan and be just fine.

    Also, what kind of clients are you hoping to acquire? *Very few* of your clients will need 10GB of disk space in a shared environment, which further puts your clients into the lower packages, they have no reason to go any higher up.

    Let's take this as an example:
    Client 1: 100MB disk space and 500MB bandwidth usage
    Client 2: 750MB disk space and 2GB bandwidth usage
    Client 3: 1.25GB disk space and 15GB bandwidth usage
    Client 4: 2.5GB disk space and 50GB bandwidth usage

    You're looking at just under $46/month from those clients using your pricing. If your largest clients are using 2.5GB disk space, there's no point in offering a 10GB plan, now is there?

    Let's toss some other plans up:
    1: 450MB/4.5GB
    2: 900MB/9GB
    3: 1.5GB/15GB
    4: 3GB/30GB

    Using the same pricing, this time around you'll be making just under $88/month on the same number of clients, which doesn't even account for the largest client needing more bandwidth, unless you worked out a special plan for him. This kind of pricing would make it easier to provide better support, better server hardware and backup procedures, etc.

    This is obviously only ONE of the many aspects of pricing and probably not a good way of approaching it, but it's food for thought and something to keep in mind. You need to determine exactly what kind of service you want to provide, the kind of support costs that will be involved, etc.
    Ankit Gupta - Cernax Hosting
    "We're always second in the industry, the customer comes first."

  8. #8
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    Thanks Anky for your suggestions

  9. #9
    What does your business plan tell you? How much have you paid for a server? How many clients are you going to host on a server? Are you going to hire support? The price of your plans must be deduced from answers to these questions plus your concept, that's niche you're going to occupy in hosting business.

  10. #10
    not bad.go ahead

  11. #11
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    Quote Originally Posted by Segey
    What does your business plan tell you? How much have you paid for a server? How many clients are you going to host on a server? Are you going to hire support? The price of your plans must be deduced from answers to these questions plus your concept, that's niche you're going to occupy in hosting business.
    My plan/calculations tell me I'm looking at a high quality service, with support as good as any, growth from cashflow, and a good passive income for myself and investors.

    I believe I've got a strong niche.

  12. #12
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    Thanks all for the comments :-)

  13. #13
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    Ontario, Canada
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    Sometimes, a lower price will actually make a potential client go to another host. They might think of you as a lower tier host. By adding some additonal features, brulding on your customer service levels and charging a slightly higher price, customers will see you as a "premium" host. Just make sure that if you go this way, you are actually providing a product that has the features to be considered a premium.
    DGC TECHNOLOGIES
    World Class Hosting & Support!
    www.dgctechnologies.com
    1-866-588-2526

  14. #14
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    Thumbs up

    As this is related to Pickin and directed to him (not advertising) I trust this is ok?

    We actually market at Local Businesses. Who want to know you can provide what they need/ask for. Our web site brings in customers but they're mainly for hobby/personal sites, where the browser has spent an hour researching who they should talk to. If you go to them you have a far better chance of getting what you want! Profit.

    We have connections with several IT hardware/software/support companies who recommend us as their web hosting company for those that need it. Obviously we give them a good incentive (like free hosting), but you'd be amazed how many companies DO NOT actually have a web site. They have the domain for their emails but no site

    Therefore, with that as our driving force behind our business plan we offer packages in yearly agreements not monthly like

    1 - $45 / 50MB / 5 Users / 1GB BW
    2 - $76 / 100MB / 50 Users / 10GB / 1DB
    3 - $190 / 200MB / 50GB / 5DBs / 5 Subs
    4 - $285 / 500MB / 100GB / 10DBs / 10 Subs

    Again our policy is to provide web hosting. Not a place to keep all your files as backup! In other words, website rarely need to be GBs.

    As I said I hope this is viewed as a help to Pickin not as advertising!
    It's a Savage Universe out there!
    Savage Hosting Ltd - CLS | MCP | ITIL | PRINCE2 | Nerd

  15. #15
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    It depends on your capabilities. For a LONG time we would NOT oversell, now we do. We now have, almost at the click of a button, the ability to transfer clients between servers. We dont sell for under $10 per month for any plan on one host, and nothing under $30/mth on another. Thats the price of two cheap meals per month, usually only one.

    What is your time worth? Is it worth $1.00 per month? Take out merchant fees, and it's even less. Rather than lower our price, we up what we offer for the price. 5 gigs disk space and 100g/bw is pretty good for $12/mth. If a server starts filling up, we simply activate another server and activate a transfer of half the clients over to it. Overselling problem solved.

    In the end.... again, what is your time worth? Hardware and bw gets cheaper all the time, the cost is in support. Are you the Grand Verdi? Or some cheap roach infested slob shop in hooker valley? It's up to you which one you want to be. I have yet to see a $1/month host become a big recognized name in the industry.

    I've been in this industry a looong time. I do pretty well at it. $1/month doesnt make a host look good, just makes them look cheap, and I dont mean in price. Trust me, there are a LOT of people out there who value their sites enough to pay good money for a good host for them.

    Keep in mind things you have to build. NONE of our data in backups (offsite and local) is less than 5 minutes old at any given time. $1/month simply wont pay the bill on a system like that. @ $1 per month, 50 customers = $50. For me, 50 customers = an absolute minimal of $500 per month. Do what you want, but in the long term when you are tiring out on support because people who pay $1 per month whining and complaining all the time bug you constantly, you'll wish they were paying more. In my experience, the less someone pays, the more they are a problem. People who pay more also earn more, work more, and have more respect towards you and your job.

  16. #16

  17. #17
    Hello,

    You need to study the market first what all the webhosting companies offers. The price is not only the factor that matter. It actally deals with what are you offering to the clients and does the client's requirements matches your setup.

    Thank you.

    Regards,

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