If you’re starting your own web hosting company, then pricing your plans can be confusing. Often, the way I see many determine their pricing is a very simplistic “per unit” pricing model. In that you see how much space/bandwidth you have and work out how much it is costing you per gb or per account – add your profit margin and you’re done, right? Unfortunately it’s not as simple as that.
Accurate pricing simply cannot be done on a per unit basis simply because you have costs that can vary and costs you probably haven’t yet taken into account.. For a web host that is just starting out or looking to be competitive in the long run, it’s important you have the right pricing from the start and that means anticipating future costs.
Just as important, you should not forget to consider your own time as a cost as well. You may not take a salary just yet, but if you plan to, you need to make sure your prices factor that in as well along with staff you may hire.
The great thing about starting out with our reseller hosting plans is that a lot of services are bundled in that save you a small fortune. The end user support namely where we answer the support questions your customers send to you under your brand name will be particularly useful in reducing your costs. If you plan to branch out onto dedicated servers, then you need to make sure you taken the associated costs into consideration – otherwise, for more predictable pricing you can just stick to reseller hosting and buy more plans as and when you need them while continuing to take advantage of our end user support.
Moving on, remember to account the following when setting prices:
1. Cost of provisioning services
2. Advertisement budget
3. Staff resources (including your time)
4. Potential license fees
5. Accounting & Taxes (i.e. for those in the UK, National Insurance contributions you have to make as an employer)
6. Disaster recovery & contingencies
7. Expansion (budget for introducing new services without having to increase prices every time)
The above is by no means an exhaustive list, but some of the main ones and should give you an idea of the type of costs you should be looking into.
As evident above, pricing goes much deeper than just working out how much you have and dividing it.. There is a whole list of costs which need to be taken into account for you to arrive at a price which is not only sustainable but also gives scope for you to fund expansion and reinvest back into your customers.