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  1. #1

    Starting a Web Hosting company at a small town.

    I live in a small town with only one web hosting provider around. Their prices, in my opinion, are ridiculous.

    $20/month
    $25.00 set up charge
    50MB disk space, extra space $.35 per MB
    1GB transfers, extra transfers $1.50 per 100 MB
    1 POP E-mail Account
    cgi-bin and PHP enabled
    Monthly web traffic reports

    $35/month
    $30.00 set up charge
    500MB disk space, extra space $.35 per MB
    25GB transfers, extra transfers $1.5 per 100MB
    5 POP E-mail Accounts
    cgi-bin and PHP enabled
    Monthly web traffic reports
    MySQL Database Service with PHP
    To add more to that, they oversell and their servers lag pretty badly. Most of the time I can't access my school's website (which is hosted from the local provider). They basically host virtually all of the websites from my town. I plan on opening a new web hosting company in town to compete with them. Since most of them already have domain names and are currently hosted with the one and only provider in town, I plan on offering free setup and transferring. I have also affiliated myself with one of the major site designers in town; I offered them free web hosting for 1 year if they direct all their clients to me for web hosting.

    I am also currently looking at jixhost to get my reseller account from, but I'm not also ruling out any suggestiong you folks might have.

    So my major questions are:
    If you were in my shoes, would you open a webhosting company to compete against the monopolizing local provider?
    If so, who would your reseller provider be?
    And would you offer domain reselling?

  2. #2
    @Lucky Che
    I would definitely open a web hosting company if I were in your place to compete against the local provider, however I wouldn't have my prices ridiculously low, when you do this the market that is currently existent there will be killed. Have your prices slightly lower so there is still some competition, eventually when your competitor looks at this they may reduce their price and this way you still have some room for margin.

    You can get a reseller account from hostgator.com or innohosting.com depending on whether or not you require end user help desk support. Either way, local clientele will mostly contact you for support during business hours and on weekdays, you will get the occasional odd request outside business hours but that is something you would have to deal with.

    Target this specific niche of local clientele which will help grow your business tremendously if done right from both a pricing, management and service perspective. Good luck!

  3. #3
    @antony_m

    Thanks for the pricing feedback! It really helps

    I was planning on maybe offering web hosting for $5.00 less the price and slightly more resources?

    Jixhost, Innohosting and HostGator are my top choices as of the moment. I have known from experience that local clientele would contact for support during business hours, as is the case with my school. I can handle odd requests outside business hours as well

    My plan was to approach the local business personally via e-mail or over a cup of tea (people in our town conduct business this way). Would that be a good idea to get some starting customers?

  4. #4
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    You would be in safe hands with Host Gator because if you do not have the technical expertise, they will be more than willing to lend you a hand

    PS:- 5 USD is a great starter plan. Wish you all the best
    If you're the smartest person in the room then you're in the wrong room

  5. #5
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    Quote Originally Posted by Lucky Che View Post
    My plan was to approach the local business personally via e-mail or over a cup of tea (people in our town conduct business this way). Would that be a good idea to get some starting customers?
    As far as local business is concerned seems not a bad idea . Hope it will work fine for you. Best wishes for your business.

  6. #6
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    If you were in my shoes, would you open a webhosting company to compete against the monopolizing local provider?
    It depends a lot on how big that market is in the area. You may be able to fight the price way, but his prices may be what they are for reasons other than being the only provider there. If there are 200 customers there at most, with few prospects that the market will be getting larger anytime soon, his $20-30 pricing makes some sense.

    Sure, you could expand and look for customers out of town/county, but that means you'll have a heck of a lot more competitors, and a lot more market analysis to do.

    Slicing prices is something he can probably do if necessary; I'm pretty sure he won't just let you take his customers away without fighting back. This means you need to come up with something that he's unlikely to be able to copy. Something that you're uniquely qualified to do/advise maybe?

  7. #7
    My town is a tourist hub. A lot of businesses catering to the tourists pop up every month.

    One thing I can do is design & code websites ([x]HTML, CSS, PHP, jS). I know that the competition cannot design websites or understand basic HTML for that matter. Bu this MAY also mean losing my affiliation with the designer (see 1st post).

  8. #8
    Quote Originally Posted by Lucky Che View Post
    So my major questions are:
    If you were in my shoes, would you open a webhosting company to compete against the monopolizing local provider?
    If so, who would your reseller provider be?
    And would you offer domain reselling?
    Looks like you found a fortune.
    I would grab the opportunity and start the business asap.
    You shold get a domain reseller account on Directi platform which allows you to create website for selling domains and managing domains.

    Quote Originally Posted by Lucky Che View Post
    My plan was to approach the local business personally via e-mail or over a cup of tea (people in our town conduct business this way). Would that be a good idea to get some starting customers?
    Offer one free month + free website transfer.
    They will be happy to start paying you from second month
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  9. #9
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    Hey let us all know ok how it goes. THANKS!!!!!!!!!!!!!!!!
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  10. #10
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    Geez, this thread makes me want to move to a small town. (Dere's gold in dem dere hills!!!)

    You should definitely start up a competing hosting site. Don't make your plans too cheap - local business is always prepared to pay much more than the ridiculous online pricing. So for instance, offer a Starter Plan for $14.95 a month and offer 1 MB of disk space and 10 MB of monthly transfer. Local clients will only use a fraction of available resources, but you will shine in comparison to your only competitor.

    You will blow your competitor outa the water.

    When you launch the site, call your local paper and ask them to write an article about you. Free publicity will get you your first signups. Word of mouth will do the rest.

    Good luck!

    Vito
    DemoDemo.com - Flash tutorials since 2002
    DemoWolf.com - 5,300+ Flash tutorials for hosting companies, incl. Voice tutorials

  11. #11
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    Quote Originally Posted by vito View Post
    1 MB of disk space and 10 MB of monthly transfer.
    Typo, I think.
    Having problems, or maybe questions about WHT? Head over to the help desk!

  12. #12
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    Quote Originally Posted by bear View Post
    Typo, I think.
    Haha, you're right. GB not MB.

    Vito
    DemoDemo.com - Flash tutorials since 2002
    DemoWolf.com - 5,300+ Flash tutorials for hosting companies, incl. Voice tutorials

  13. #13
    I highly recommend Host Gator. If you go on retailmenot.com you can get a coupon for a free month of reseller hosting to test it out.

  14. #14
    Thanks for the feedback everyone!
    In the end, I'm sticking with my primary choice: JIXHost.

    I'll set up my prices as $14.99, $19.99 and $24.99. It may still change, though!

  15. #15
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    Quote Originally Posted by Lucky Che View Post
    Thanks for the feedback everyone!
    In the end, I'm sticking with my primary choice: JIXHost.

    I'll set up my prices as $14.99, $19.99 and $24.99. It may still change, though!
    Thank you. We look forward in working with you.
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  16. #16
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    Quote Originally Posted by Lucky Che View Post
    Thanks for the feedback everyone!
    In the end, I'm sticking with my primary choice: JIXHost.
    You are welcome. Best of luck with your new host. Give us a review after a couple of months.

  17. #17
    Are you marketing it locally only? I would think with the web anyone can get hosting from anywhere in the world

  18. #18
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    Lucky Che congrats and good wishes for you new venture.

    Pricing you mentioned are fine for the market you described.

    As you mentioned your town is tourist hub. You can get a portal developed dedicated to your town and it's business. That is a platform for extra revenue, attracting clientele and promoting your hosting business. To start with give out free text/banner ads to all the business on the portal whether client or not which later on at some point you can start charging for and in the footer of the portal have a link to your hosting domain/site.

    Also there is a good thread, have a read http://www.webhostingtalk.com/showthread.php?t=570295
    Vinsar.Net - Quality Web Hosting at Economical Price on USA & European Servers
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  19. #19
    The problem with reseller accounts and even VPS is that the less you pay ($50.00/m-$100/m) the less disk space and bandwith you get (ex: 25gb disk space, 250gb bandwith...) and you will only sell share hosting with low disk storage and low bandwith, when you compare to big names they have unlimited disk space and bandwith..... starting $4.00/month... How can tou beat your competitor, he might have some clients he might know but with one click of mouse and with "google as your friend" you can find tens of unlimited.... for really cheap and they are well established companies. Anyway give it a try youve got nothing to lose, good luck.
    Last edited by MonsterDomainer; 12-01-2009 at 05:36 AM.

  20. #20
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    There is no such thing like unlimited, there is a limit somewhere.

    There are people looking for cheap unlimited every thing but there are also people looking for quality, if there are big names providing unlimited everything there are more dependable names providing better quality services.

    There is market for every one, what matters is how you want to play.
    Vinsar.Net - Quality Web Hosting at Economical Price on USA & European Servers
    Offering domains, shared, reseller & VPS hosting.
    Reliable Domain Reseller Account Resell Domains with Confidence

  21. #21
    That's a great way of business. It is important also to compete wisely rather than destroying someone else livelihood. Cause think also the employees that they support if you put them out of business.

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