Set up fees or lower pricing?

SenseiSteve

HD Moderator
Staff member
If you're a reseller and your upstream gives you the choice of a setup fee and lower month to month pricing versus no setup fee and higher month to month prices, which would you choose and why?
 

izumi777

Member
If the setup free is paid just once then I would choose the choice of a setup fee and lower month to month because I prefer lower recurring payment.
 

bigredseo

HD Community Advisor
Staff member
As a user, I'd want a setup fee (usually), but as a business, I'd rather the higher monthly fee so we could maintain level of service.

Getting that chunk up front is nice, but it's quickly spent and can hurt long term goals for the company.

We've seen some reseller places charge a $200 setup fee and $30/month thereafter ($560 first year, $360 each year after that), but I'd be just as happy spending $45/month and keep the user ($540/year).

As a user I'm also careful about paying a setup fee and then if the service is not up to my liking, I'm out the $200 :(
 

easyhostmedia

Well-known member
As a user, I'd want a setup fee (usually), but as a business, I'd rather the higher monthly fee so we could maintain level of service.

Getting that chunk up front is nice, but it's quickly spent and can hurt long term goals for the company.

We've seen some reseller places charge a $200 setup fee and $30/month thereafter ($560 first year, $360 each year after that), but I'd be just as happy spending $45/month and keep the user ($540/year).

As a user I'm also careful about paying a setup fee and then if the service is not up to my liking, I'm out the $200 :(
The only time i ever charged a setup fee £5 was when i had a server that i used for charities and community groups where i gave them free hosting (after stringent checks), this was for 2 reasons.
1) so they had to provide details by setting up an account with us.
and
2) Covered us setting up the account on the server and the checks.
 

chadwaliser

New member
FREE setup is a good way to stand out I feel and entices the user to signup. If there is a setup fee, that can be confusing to the customer. You should always have a one price system for your web hosting plan.
 

easyhostmedia

Well-known member
FREE setup is a good way to stand out I feel and entices the user to signup. If there is a setup fee, that can be confusing to the customer. You should always have a one price system for your web hosting plan.
You wont stand out from other hosts by offering free setup as a majority of hosts offer free setup
 
We don't charge any setup fee's across our services as like mentioned above, we would prefer a flat rate income rather than initial higher income which can give off false income predictions. The only time we would charge a setup fee would be if we have to obtain services on behalf of a customer where we get charged a setup fee.
 

clouvider

New member
I'd say it depends how long you choose to keep those services or what the setup fee cost is compared to without it.

e.g. if your doing an upgrade and say chose a setup fee for the cost of the hardware, but then only paid minimal monthly charges for the power/cooling of this upgrade then this could be appealing. However paying £200 upfront to say save £10 per month if you want to keep a service for 6 month's isn't worth it.
 

easyhostmedia

Well-known member
I'd say it depends how long you choose to keep those services or what the setup fee cost is compared to without it.

e.g. if your doing an upgrade and say chose a setup fee for the cost of the hardware, but then only paid minimal monthly charges for the power/cooling of this upgrade then this could be appealing. However paying £200 upfront to say save £10 per month if you want to keep a service for 6 month's isn't worth it.
but sometimes as a host you have no choice but to charge a set up fee.

e.g. Part of your offerings it to sell VPS/Dedicated Servers, but these are resold though a white label service, so your customers think these are direct from you, but your provider charges you a set up fee, so in turn you have to change your customers a set up fee at least equal to what you are being charged.

I have seen some hosts offer a free domain, but then charge a set up fee which strangly is approx. the cost of a domain, so they attract customer with the word FREE, but infact the customer is paying for the domain in the guise of a set up fee.
 

WerdPressEh

New member
No setup fees, setup fees for me has always been an instant turnoff, especially on services which I know are for the most part automated.
 
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