Cheap plans are bad?

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LuxHost

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At my company, I have really cheap plans, but then I go around and read certain "guidelines" stating that cheap is not good? I don't know whether or not to raise the prices in order for browsers to be more satisfied or not.
 
The first concern for your business should be whether or not you can afford to offer plans at such a price without putting the quality of your clients service on the line. If you can afford to offer cheap plans, then by all means go for it. But some people might be skeptical about the service they will receive at a cheaper host. Then again, some people don't really think about that and just look for the cheapest price.
 
I can afford to sell such plans. I mean if I get 2 to 3 customers, then that is my payment right there for my reseller, and I am sharing a dedicated server with someone else, so I pay for that partly. I just don't want to make my prices extremely cheap so people don't want to buy.. Nor do I want to make it so expensive, that people cannot afford it.
 
LuxHost,
I wouldn't say that all cheap plans are bad. Go by what you pay per month for services. For instance.
Take server price/month and divide it by server total bandwidth. Take that number and write it down, that's what it costs YOU per GB of bandwidth. Take price/month of server and divide it by MB of storage. Take that number and write it down. That's what it costs YOU per MB of storage.

Then take a package - say a 200MB/3GB package. Take the magic storage number and times it by 200. Write that number down. That's what it costs you for storage for this package. Take the magic bandwidth/transfer number and times it by 3. Write that number down. That's what it costs you for bandwidth/transfer for this package.

Now, add those last two numbers together. That's your cost for the package in question. Now, take that number and times it by a markup percentage, and add a static cost amount for support fees. That should be what you charge for the package.

Compare your prices after this to your top 5 competitors and adjust your markup percentage accordingly to make your prices competitive. Don't undercut yourself.

Hope this helps.

Edit: This is assuming that you've already done the math conversion for Mbit/month to GB/month conversion for your server's transfer.
 
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Xcel_Hosting said:
Do you oversell?
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What do you mean? As in do I sell things for more than it should be?
Because if that is what you are asking, then I do think so sometimes. Take for example, the unlimited shared plan. That can run anywhere from 250 to 300 at some places, but I only charge 180.

And thank you Exon, that is a wonderful way to look at it:)
 
In that case, no.

For shared plans, I have an unlimited reseller, therefore I can afford it.

As for dedicated servers, it is not an unmetered, therefore I do not sell unlimited plans.
 
Lux - your page is dark...too dark. I know you're not asking for reviews but when a potential customer is interested in a host, if the host has black on blue text it makes it hard for any cutomer to read. I have a very bright monitor, the lighting in here is great, and I STILL had to highlight your text in order to even attempt to read your plans. In the brief time I spent on your website I have one word of advice for you. Brighter. But, this is not a "how is my website" post.

When you say unlimited reseller - define unlimited. There is no such thing as unmetered hosts and selling yourself like this makes it look as though you won't be with us in another month or two.
 
Exon is right. You should be very careful with what you do with that reseller. Your clients won't be too happy when their account is suddenly full.
 
Thanks for the advice on making things brighter.

I am not going to sell unlimited resellers either. I was'nt planning to. I was saying that the reseller that I am hosted at has over 999999999999 gb of space (or so I am told).
 
Its good to see that you will take our advice into consideration. We're all here to help each other. About the 999999999999 gb of space - I wouldn't try to use it. Chances are your host will give you the boot a few trillion gb before that ;)
 
If I were in your position, I would get rid of that account and either get another reseller account, or multiple reseller accounts if you are not yet ready to manage your own server. You just want to make sure that your services will always be available. With a reseller account, you must be careful because you can never tell what other people on the server are doing or how your host is selling space on the server.
 
Jordan is absolutely right (We go back and forth with this - we're so smart! :) ) - that "unlimited" account you got yourself, I'd be careful with that - don't put clients on there that you want to keep.
 
well they have great support, plus if anything, I would just switch them to my dedicated servers
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What I can't understand is that if you have server(s), then you should already know the "unlimited" bandwidth and space do not exist. Furthermore, if you have server(s), why even bother with a reseller account?
 
In answer to the thread posted.....if you provide quality service for a cheap price then why do you care about if cheap pricing is bad or not? The whole idea from cheap pricing is you get what you pay for and sometimes hosts with cheap prices are not always good. People also say never try to compete when it comes to cheap prices. But if ur customers arent compaling i dont see a problem. your service is probably great even tho you have a cheap price!
 
The issue with starting out with cheap pricing is reaising upsets people even more. If you provide a great service then sell that even if you have low prices.
 
It could affect you, it could be good for you. Everyone looks at it in different ways. Some say, why are there plans this cheap? Are they that desperate? Some say WOW! SO CHEAP, LET ME BUY NOW. The people that think twice, care about there site.. the ones that pay those few bucks extra care about there site, the customers looking to spend the LEAST amount especially if your pricing is good.. will probably not be long term customers. Think of it that way, you can do cheap prices Just do not shoot yourself in the foot.
 
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