GordonH
12-01-04, 03:53 AM
Hello
This is me thinking aloud, but it might be interesting to talk about it....
We can get Celeron 2.4GHz servers with 2x60GB HDD, cpanel and 1000GB per month from Nocster for $88 per month.
Now, because of the exchange rate to the UK market that works out at less than fifty pounds, which is peanuts.
I view all our suppliers as "opportunities" and I am always looking for ways to make money out of their products.
Selling those servers into the UK market would potentially realise higher profits than selling them into the US where prices are generally lower (and the exchange rate hits us when we bring the profit back).
However, the UK market demands a lot of tech support, which is why the servers we provide from our UK data centre cost more than $500 a month!
The costs for server admin here are high because wages are high.
So....
As I see it there are two ways to make a profit out of this.
1. Break the mould and provide reboots only (ala Rackshack).
This has considerable security implications because of software upgrades etc.
Might also give a bad impression (unless I sold it under our cheap brand to isolate it).
2. Outsource the support and server admin to somewhere like India.
I have concerns about reliablity and language issues if I did that. Also, I know that some of these companies subcontract which would not be good.
The next issue is the VAT.
We have to charge 17.5% VAT which means that if we sell at £99 per month we would need to pay £14.74 of that £99 in tax.
That would leave about £35 for profit, promotion, chargebacks and support which is not very good.
So, I could form a company in Jersey which would avoid the VAT, but the costs of doing that would be rather high on the accountancy side.
Thats how my mind is thinking.
Can I make a profit by doing this?
I think I can, but the question is how?
This is me thinking aloud, but it might be interesting to talk about it....
We can get Celeron 2.4GHz servers with 2x60GB HDD, cpanel and 1000GB per month from Nocster for $88 per month.
Now, because of the exchange rate to the UK market that works out at less than fifty pounds, which is peanuts.
I view all our suppliers as "opportunities" and I am always looking for ways to make money out of their products.
Selling those servers into the UK market would potentially realise higher profits than selling them into the US where prices are generally lower (and the exchange rate hits us when we bring the profit back).
However, the UK market demands a lot of tech support, which is why the servers we provide from our UK data centre cost more than $500 a month!
The costs for server admin here are high because wages are high.
So....
As I see it there are two ways to make a profit out of this.
1. Break the mould and provide reboots only (ala Rackshack).
This has considerable security implications because of software upgrades etc.
Might also give a bad impression (unless I sold it under our cheap brand to isolate it).
2. Outsource the support and server admin to somewhere like India.
I have concerns about reliablity and language issues if I did that. Also, I know that some of these companies subcontract which would not be good.
The next issue is the VAT.
We have to charge 17.5% VAT which means that if we sell at £99 per month we would need to pay £14.74 of that £99 in tax.
That would leave about £35 for profit, promotion, chargebacks and support which is not very good.
So, I could form a company in Jersey which would avoid the VAT, but the costs of doing that would be rather high on the accountancy side.
Thats how my mind is thinking.
Can I make a profit by doing this?
I think I can, but the question is how?