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  1. #1
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    Questions for hosting businesses with more than 5000 clients.

    Hi.

    I would like to know:

    1. How long it took you to build a 5000+ hosting business.

    2. What's the average profit per hosting account for hosting businesses with 5000+ clients.

    Thank you very much for taking time to answer my question.

  2. #2
    Join Date
    Oct 2001
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    Ohio
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    Seems like this question is asked every two weeks...

  3. #3
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    Sorry... I just didn't find the answer so... I thought I'd better ask...

  4. #4
    I think only hostingplex can answer your question.

    Else, if you have a business plan it's quite easy to analyse a rough profit rate from 5000+ customers.
    YourCheapHost.com - Low cost multi domain hosting solutions. [Legal adult content friendly]
    Reliable web site hosting is our motto. We have Alertra stats to back that up.
    Proven provider of high quality shared and reseller accounts since 2002.

  5. #5
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  6. #6
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    Clustered Hosting With Continuous Data Protection (CDP)
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  7. #7
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    Originally posted by net-trend
    I think only hostingplex can answer your question.
    That's my line, damnit!!!
    WLVPN.com NetProtect owned White Label VPN provider
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  8. #8
    Join Date
    Sep 2002
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    1,585
    Well wheres hostingplex?

  9. #9
    Well wheres hostingplex?
    They are busy at their desk deciding how many clients they want to say they've added this month....could easily be up to 10,000 or more by the next time they post.

  10. #10
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  11. #11
    Originally posted by Aussie Bob

    That's my line, damnit!!!
    First come first serve Mr. Bob.
    YourCheapHost.com - Low cost multi domain hosting solutions. [Legal adult content friendly]
    Reliable web site hosting is our motto. We have Alertra stats to back that up.
    Proven provider of high quality shared and reseller accounts since 2002.

  12. #12
    Join Date
    Mar 2001
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    1,446

    Re: Questions for hosting businesses with more than 5000 clients.

    Originally posted by ldcdc
    1. How long it took you to build a 5000+ hosting business.

    2. What's the average profit per hosting account for hosting businesses with 5000+ clients.
    If you price your accounts at $1.99/month, it'll take much less time than if you price your accounts ar $19.99/month. 5000+ customers is not hard to do if you have rock bottom prices, but then you have very little profit, which equals poor support and planning many times.

    It takes years to build a larger client base (> 1000) with decent profit margins. 6+ years here

    - John C.

  13. #13
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    Nov 2002
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    New York
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    Our company is in business for about a year and we got 800 clients in that time.
    Last edited by Chicken; 11-17-2002 at 12:54 PM.

  14. #14
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    Oct 2002
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    MO, USA
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    Seems like this question is asked every two weeks...
    Everyone wants instant $$$ in the shortest amount of time. Maybe we just need money trees. But that did bring up something I'm curious about. What is the avg client base for most hosting companies?

  15. #15
    Join Date
    May 2002
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    Georgia, USA
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    Hosting is the next "get rich quick" scheme... it's the Amway of the future!
    CDHost - Managed Business Hosting
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  16. #16
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    Nov 2001
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    Actually we don't have 5000 clients but we do host over 6500 web sites.

    So heck I'll chime in anyway

    It took a year, I started Oct 24th 2001.

    Profit margin is good, I don't have an exact figure but rough estimate is it costs about 60% of our intake to cover the costs. Per account is misleading, I have $19.95 per year customers, and then I have resellers paying $150 a month for their service. So there's not figure for "per customer profit".

    I can say, if I had 5000 $19.95 a year customers and nothing else I'd quit the business and go to Domino's and deliver pizzas. The profit in a $19.95 per year account isn't nothing to crow about, if you had 5000 of them and nothing else you could if you were very careful maybe make a living, but I can make a living delivering pizzas and I won't have the stress of 5000 customers greying my hair prematurely
    Gary Harris - the artist formerly known as Dixiesys
    resident grumpy redneck

  17. #17
    Join Date
    Mar 2001
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    1,446
    congrats Gary! Seems you're on the right track.
    ( better update your About Us page )

    - John C.

  18. #18

    *

    Originally posted by CDHost
    Hosting is the next "get rich quick" scheme... it's the Amway of the future!

  19. #19
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    Nov 2000
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    San Diego
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    Re: Re: Questions for hosting businesses with more than 5000 clients.

    Originally posted by JohnCrowley


    If you price your accounts at $1.99/month, it'll take much less time than if you price your accounts ar $19.99/month. 5000+ customers is not hard to do if you have rock bottom prices, but then you have very little profit, which equals poor support and planning many times.

    It takes years to build a larger client base (> 1000) with decent profit margins. 6+ years here

    - John C.
    This is a good point. I have never been impressed with any company that sells cheap hosting to get customers. Why? Because anyone can do it. People can do it for years before they realize they are flawed.

    What impresses me is host who get to 5000 buy actually running the business like a business. By offering quality services for actual prices that will allow you to grow your business long-term.

  20. #20
    Join Date
    Sep 2001
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    Texas
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    Hosting is the next "get rich quick" scheme... it's the Amway of the future!
    Just be sure you are at the top of the pyramid!
    Going out of business in our 10th year.

  21. #21
    Join Date
    Feb 2002
    Location
    Australia
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    Re: Questions for hosting businesses with more than 5000 clients.

    Originally posted by ldcdc
    1. How long it took you to build a 5000+ hosting business.

    How long a host takes to build a client base like that is dependant on many factors. Maybe you've got a few million in VC $$$ and you've set some targets through your customer acquisition programs. You could easily acquire 5000 clients by purchasing smaller hosts or using any one of 100 marketing strategies. So you could hit the 5000 mark in a matter of weeks. Hope you've got all your systems inplace and ready to go etc.
    2. What's the average profit per hosting account for hosting businesses with 5000+ clients.

    That depends on what you mean by profit. Nett profit or gross profit etc. That also depends on your cost structure and plan structure. I guess sit down with your spreadsheet and try to forecast some numbers. According to my spreadsheet, I make 32.86% profit. That's before tax and after all expenses etc. Many, many variables to take into consideration here with your question.

    If you're putting together a business plan for VC funding, then you'll need to go into great detail etc. If you're just wanting to just get started in the industry, then get a reseller plan and work your way forward etc. You'll then get a feel for your plan pricing, your marketing, costs etc. Just depends on how you want to attack this. There are so many things that you'll learn from running your business, that can't be written into a business plan.
    Thank you very much for taking time to answer my question.
    No worries at all.
    Last edited by Aussie Bob; 11-18-2002 at 02:06 AM.
    WLVPN.com NetProtect owned White Label VPN provider
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  22. #22
    Join Date
    Dec 2001
    Location
    Toronto, Ontario, Canada
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    you dont need any business plan to get into hosting nowdays, get some $300 of capital, and you've got enough for a $20/mo reseller for say 6 months, a merchant, domain, and ssl and you're basically in business (crude as it may be), unfortunatly getting past that is another matter, i've seen some resellers grow from like 2 accounts, to 20 accounts, to 200 accounts (in that order, in 3 months).

    Good thing about building up a relatively large client base is recognition, and if you hike your prices later (within reason) you'll have a sturdier client base for new signups, then starting up with no reputation and $20/mo accounts (which is nearly impossible). Lets just remember, sell stuff below profit, and the 3 ghosts of cyberwings will come and get you when you sleep! .
    Myles Loosley-Millman - admin@prioritycolo.com
    Priority Colo Inc. - Affordable Colocation & Dedicated Servers.
    Two Canadian facilities serving Toronto & Markham, Ontario
    http://www.prioritycolo.com

  23. #23
    I can say, if I had 5000 $19.95 a year customers and nothing else I'd quit the business and go to Domino's and deliver pizzas.
    $19.95 x 5000 = $99,750 per year

    Bloody hell - if Domino's are offering that much for pizza delivery, then count me in!


  24. #24
    Join Date
    Dec 2001
    Location
    Toronto, Ontario, Canada
    Posts
    6,896
    Originally posted by I, Brian


    $19.95 x 5000 = $99,750 per year

    Bloody hell - if Domino's are offering that much for pizza delivery, then count me in!

    Deduct staff to assist them, around 4% of that for the processor, around 1/2 of that for the servers, i mean they do want webhosting right? Most likely not the invisible type.... that leaves you with uh, next to nothing, dominoes is competitive at that point .
    Myles Loosley-Millman - admin@prioritycolo.com
    Priority Colo Inc. - Affordable Colocation & Dedicated Servers.
    Two Canadian facilities serving Toronto & Markham, Ontario
    http://www.prioritycolo.com

  25. #25
    Join Date
    Nov 2000
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    Tasmania, Australia.
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    3,590
    Originally posted by porcupine
    i mean they do want webhosting right?
    You're being pedantic Myles...

    Gary

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