hosted by liquidweb


Go Back   Web Hosting Talk : Web Hosting Main Forums : Running a Web Hosting Business : Gross Profit Margin
Reply

Forum Jump

Gross Profit Margin

View Poll Results: What is the acceptable Gross profit margin for webhosting biz.
60+% 22 42.31%
50%-40% 17 32.69%
30%-20% 4 7.69%
<20% 9 17.31%
Voters: 52. You may not vote on this poll

Reply Post New Thread In Running a Web Hosting Business Subscription
 
Send news tip View All Posts Thread Tools Search this Thread Display Modes
  #1  
Old 07-25-2002, 04:28 PM
matrosov matrosov is offline
Aspiring Evangelist
 
Join Date: Oct 2001
Posts: 383

Gross Profit Margin


In your opinion, what is the acceptable Gross profit margin for a web hosting biz.



Sponsored Links
  #2  
Old 07-25-2002, 04:31 PM
BeDifferentSolutions BeDifferentSolutions is offline
Web Hosting Master
 
Join Date: Nov 2000
Location: San Diego
Posts: 3,407
Re: Gross Profit Margin

Quote:
Originally posted by matrosov
In your opinion, what is the acceptable Gross profit margin for a web hosting biz.
I think you should explain what Gross profit margin is. I think a lot of host have no clue.

  #3  
Old 07-25-2002, 04:35 PM
ubergeek22 ubergeek22 is offline
Web Hosting Evangelist
 
Join Date: Jul 2002
Location: UK
Posts: 524
It's a basic business term, that anybody who runs a business should surely know...

Sponsored Links
  #4  
Old 07-25-2002, 04:40 PM
matrosov matrosov is offline
Aspiring Evangelist
 
Join Date: Oct 2001
Posts: 383
Oops accounting talk sorry. Gross profit margin is your revenues less expenses directly related to your hosting business like server rentals, backups, cp licences merchant account fees. (Does not include your salaries, publications, or travel and entertainment.), divided by your revenues and expressed as percentage so basically it is this formula

(Revenues-Direct expenses)/Revenues*100%

So as an example if your Revenues are $3200 and your Direct expenses are $1600 your Gross profit Margin is

(3200-1600)/3200*100%=50%

  #5  
Old 07-25-2002, 04:41 PM
BeDifferentSolutions BeDifferentSolutions is offline
Web Hosting Master
 
Join Date: Nov 2000
Location: San Diego
Posts: 3,407
Quote:
Originally posted by ubergeek22
It's a basic business term, that anybody who runs a business should surely know...
I know. Thanks. I was joking. If you hang around here long enough I think you will see my point.

  #6  
Old 07-25-2002, 04:43 PM
matrosov matrosov is offline
Aspiring Evangelist
 
Join Date: Oct 2001
Posts: 383
Well good businessman is not the one who knows what that term means but the one who can hire a good accountant to keep that businessman honest .

__________________
Neureal Inc.
The leader in multi-domain webpresence solutions
www.neureal.com

  #7  
Old 07-25-2002, 04:52 PM
JKLIVIN JKLIVIN is offline
Web Hosting Master
 
Join Date: May 2001
Location: United States of Walmart
Posts: 684
I would have to say 30 to 50% would be ideal, as once all the other expenses are factored in, it will keep cutting in.

umbilly, I was following ya!

  #8  
Old 07-25-2002, 04:53 PM
ISPCEO ISPCEO is offline
Registered User
 
Join Date: Apr 2002
Posts: 12
Quote:
Originally posted by matrosov
Well good businessman is not the one who knows what that term means but the one who can hire a good accountant to keep that businessman honest .
I hired Andersen

Seriously though, hosting has been infamous for its razor-thin margins. If there's a host out there with a GPM of >=20%, they are doing damn well.

  #9  
Old 07-25-2002, 05:04 PM
m00ds m00ds is offline
WHT Addict
 
Join Date: Jul 2001
Posts: 145
matrosov you'd really have to define your question about the GPM%. There are many types of webhosting services...those who provide only dedicated servers, those who provide ded servers and shared hosting and those who only provide shared hosting (did i miss anything?). the margins for these different types of services would vary differently. for example shared web hosting companies would have a higher GPM margin since they would not have higher costs involved compared to dedicated server providers like maintaining data centers and such...you get the point.

one thing i do know is that pure service based companies have a much higher margin, typically 40% or more based on what my accountant told me.

__________________
spam --> /dev/null

  #10  
Old 07-25-2002, 10:16 PM
AcuNett AcuNett is offline
Peace of Mind ServerManagement
 
Join Date: Dec 2001
Location: Franklin, TN, USA
Posts: 1,313
UmBillyCord
Loves Square Dancing

Registered: Nov 2000
Posts: 1337

UmBillyCord is l337
Congrats

__________________
ServerSync, By AcuNett | RAID-6 Remote RSYNC Space
Are you ready for peace of mind?

Sit back. Relax. Leave everything to us.
( AcuNett 24x7 Always-On Server Management Est. 12 Years, BBB A+, RateLobby Reviews )


  #11  
Old 07-26-2002, 12:23 AM
HRBrendan HRBrendan is offline
Web Hosting Master
 
Join Date: Sep 2001
Location: Clifton Park, NY
Posts: 925
just for some contrast walmart's profit margin is about 3%

-Brendan

  #12  
Old 07-26-2002, 10:19 AM
Duchz Duchz is offline
Newbie
 
Join Date: Nov 2001
Posts: 16
*

Given sales of $226.7B , 3.1% are enormous.

  #13  
Old 07-26-2002, 10:32 AM
mpalamar mpalamar is offline
Web Hosting Master
 
Join Date: Dec 2000
Posts: 610
Quote:
Originally posted by matrosov
Oops accounting talk sorry. Gross profit margin is your revenues less expenses directly related to your hosting business like server rentals, backups, cp licences merchant account fees. (Does not include your salaries, publications, or travel and entertainment.), divided by your revenues and expressed as percentage so basically it is this formula
Shouldn't sales commisions and wages for support employees be included in the above equation. They are variable expenses and directly related to sales volume.

Mike

  #14  
Old 07-26-2002, 12:40 PM
HRBrendan HRBrendan is offline
Web Hosting Master
 
Join Date: Sep 2001
Location: Clifton Park, NY
Posts: 925
Quote:
Originally posted by Duchz
Given sales of $226.7B , 3.1% are enormous.
About 1 out of ever 200 people in the US works for Walmart.

-Brendan

  #15  
Old 07-26-2002, 01:45 PM
Skeptical Skeptical is offline
Web Hosting Master
 
Join Date: May 2001
Posts: 1,349
Quote:
Originally posted by HRBrendan


About 1 out of ever 200 people in the US works for Walmart.

-Brendan
You're kidding right? Wow! Can you show me a link or some report about this?

__________________
Expert Cpanel and WHMCS Development
We have done many modules such as alipay, chinabank, net.cn domain registration, and Cpanel modules such as auto-installers similar to Scriptaculous. Demo available upon request.
Email: sales[-at-]systemengineer.com

Reply

Related posts from TheWhir.com
Title Type Date Posted
Microsoft Cloud-Focused Partners Beat Peers in Revenue and Growth: Study Web Hosting News 2014-05-08 12:34:46
Strong Cloud Revenue Helps Microsoft Beat Wall Street Estimates in Q3 Web Hosting News 2014-04-30 18:21:47
ProfitBricks Talks Cloud Price Cuts Web Hosting News 2013-07-31 16:20:00
Strategies to Reduce Operating Costs, Avoid Email Blacklisting and Improve Deliverability Webinars 2014-06-10 11:05:29
Fahrenheit Marketing to Foot the Bill for 500 Texas Non-Profits' Web Hosting Web Hosting News 2012-12-31 16:22:22


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes
Postbit Selector

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is Off
HTML code is Off

Forum Jump
Login:
Log in with your username and password
Username:
Password:



Forgot Password?
Advertisement:
Web Hosting News:



 

X

Welcome to WebHostingTalk.com

Create your username to jump into the discussion!

WebHostingTalk.com is the largest, most influentual web hosting community on the Internet. Join us by filling in the form below.


(4 digit year)

Already a member?