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Reseller help!
Posted by 3listen, 12-23-2002, 04:42 AM If i am selling webspaces will this be a bit too expensive $49.95/year 150MB space 3GB bandwidth just want to know
Posted by skelley1, 12-23-2002, 04:56 AM too expensive? Let's assume for the moment that this is your only plan: $49.95- say, $1 for credit card transaction=$49/yr == $4.08/mo average income before you spend anything on your reseller account. To make it simple, lets say you have a $10/mo reseller account. You would need 3 people to break even, and then you start making a profit after that. When you have 200 clients at this price, you'll have an income gross of approx. $800/mo but your reseller account would have grown a bunch by then, so you'd probably be looking at a dedicated server or a HUGE reseller account, each of which are going to cost you $100-$300/mo, especially if you go dedicated since you'll have to pay for security, management, software, etc. This would leave you with probably $500-$700/mo before taxes per month, not counting cancellations, chargebacks, etc. Supporting 200 clients that are paying that little would be at least a part-time job in itself, and you'd still have to deal with billing, problems that come up, accounting, etc. IMHO it would be a lot less work and some more pay at McDonald's. If you sit down and actually do a business plan, you'll see that this pricing will not allow you to grow, support your clients, keep your infrastructure intact, etc. Only your potential and current clients can really tell you whether that is expensive or not. They will make their determination based on what they think is comparable. If you don't justify your pricing somehow, then you'll lose out to the $9.95/yr hosting company even though they won't survive. Don't think that just because someone has cheap costs that they thought things out thoroughly. Hosting companies with cheap costs go out of businesses much more often than the ones that are more expensive. Maybe not Gospel, but that's what I think.
Posted by 3listen, 12-23-2002, 05:07 AM ooo! thank you very much! Now i'm more confident!
Posted by skelley1, 12-23-2002, 05:12 AM There are a lot of people who will try to give you advice (even me). The biggest thing you have to do is try to figure out what your prices will be now, in the short term, and in the long term, and make sure you will have enough income to do all that, but not price yourself out of the market. Just sit down with a spreadsheet and try to take everything into account that you will have to pay. Just FYI, my yearly plans for a similar plan (if I offered that amount exactly) would be about 10X what you are asking. I'm not targeting your audience though and have other things to compensate, so it might not translate well.
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