Got some questions about starting a VPS hosting company
Hey all , I'm thinking about starting a VPS hosting
company but theres a few things that puzzles me
A) From what i read the average $200-300 dedicated server
can hold between 8 to 16 VPS's , i have seen VPS's being sold as low as $10 , if the server is limited to 8-16 VPS's and
i'll charge only $10 per VPS that would suck because
it wouldnt even cover the server costs, how do others do it?
what am i missing?
B) What do i do if the bandwidth of the dedicated server
wont do? do i search for a better deal or? ive heard
its possible to buy additional bandwidth from providers like
level3,teleglobe,cogent etc,is it true? and how much is it gonna cost? and how do i add it to the dedicated server?
C) What about IP addresses,do i have to buy additional ones
from my dedicated server host or can i buy em seperatly
and how much is that gonna cost?
Easy - you dont sell the VPS for $10/m. If you start your pricing at $30-$40/m, you will see much better success.
It doesn't matter if someone else offers it lower because your service could be different than theirs. You could offer a higher level of service, or even make a fully managed VPS service where you can charge even more.
b) depends on the host - in reality, it is likely that your VPS customers wont use all the bandwidth you give them. So If you only are given 1000Gb transfer, and want to offer 10 VPS accounts at 200GB each, you will probably still be OK. Worse comes to worse you just buy another block of transfer to take care of the overage.
c) You will have to buy IPs from the datacenter. They usually let you buy them starting in groups of 4-5
There are two kinds of people selling $5-10 VPSes: the ones operating on a big enough scale to provide a decent service at that rate, and the ones who have no idea what they're doing and just cram more VPSes on the same node to make profit.
Work the other direction - don't start out with a target price, start out with a target profit margin based on a given server. Divide that out by the number of VPSes that fit comfortably on the machine, and that's how much you want to charge.
If your sales pitch consists of nothing other than price, find a different section of the market to concentrate on - the budget VPS market is a minefield filled with carnage every day.
Why don't you just go ahead and get one decent server and try to sell at around $20ish/Month. Don't think too far ahead when starting your business, just do it. When you're successful filling up one server, then you can restructure your pricing for the second server and so forth. Don't waste energy doing the "what ifs" when you're just starting out.
Just start and try your best at filling up your first server. As for dedicated IPs, most provider charge some $1/Mo per IP. When you got enough IPs, go get your own pool from ARIN.
Don't think too far away, just get rolling.
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