View Full Version : Over Selling, etc...
IBanners
10-01-03, 10:56 PM
As youve seen from my other post, I am getting more and more interested in starting a hosting company. I have been looking at servers at RS expecially the P4's. For example the p4's come with 700 gigs of bw. If you didnt oversell on your servers you wouldnt be making a very big profit right? I mean, if you sold plans for ruffly $1 per gig like $5 for 5 gigs, then you would only make $700 a month if the server was full, and you would then lose most of it in server costs, and other costs. So how can hosts make a decent profit running off RS servers, or other similar setups? Do they all over sell? And if you were to oversell is that such a bad thing? What would you do if all your clients suddenly started using there bw? :cool: Thanks for the info once again guys!
if you are getting into the hosting business to make a profit, you won't. Not now, not for a few months. Oversell isn't a bad thing, if they know their limits. As long as you are money smart and save money for a 2nd server, than when you are half way full, just get a 2nd server.
This is true as Robert is saying. What reality is is that on one server you are not going to make a profit. If you break even that count yourself lucky.
There is a fine balance between the breakeven and profit. There are a great number of factors that come into play as well. Remember RS offers you 700G but there is a great deal they dont offer the new business starting out.
Make a list and weigh all of the providers out there. Some of the ones that dont offer as much transfer may offer better services to you or assist you in building your business. That would be more benefical than just an amount of transfer.
Do a lot of home work and then make the right shoice. Not on what you see up front such as hardware and transfer but on what you dont see.
IBanners
10-02-03, 12:59 PM
Why is getting into the hosting business to make money a bad thing? I would be getting into it because I am interested in hosting, to make money, and to have fun. Also, why can you not make a profit from one server?
Well you can but i think the point they are both trying to emphasise is do not expect high profits if any at all from your first server or your first couple of months.
Call it pessimistic if you wish but its the cycle most hosts go through and its just the way things work. Make sure you have the money side of things OK as you dont want things to end just before they have even started.
Dont expect to get into profit anytime soon.
To answer your question, overselling isn't bad as long as you know your limits.
Ok so you're getting a server from Rackshack. with 700GB of bandwidth, now what makes you better than the other 14,000 dedicated servers that also offer paid hosting with a 700GB limit on each server? We aren't saying you won't make a profit, we are saying it won't be right away. Unless you offer some dirt cheap prices and oversell like there is no tomorrow. But in the long run, it will bite you in the ass and everyone will not recommend your service.
If you make as much money as you claim, than I would suggest sticking to what you do best.
It is hard when starting out, first you have to make your startup costs back - server, setup advertising, billing setup, software etc.
Next you need to cover your nut - the base cost of operations every month. If you start at $10 for every plan, this means you need to sell 20 plans to get $200 a month, which will cover you nut, but not get you setup costs back. So you need 25-30.
How are you going to get them? Lower your prices, you have to get more. Spend money on advertising, it will take longer to recoup the money.
If it takes you 3 months to get 30 customers, that means much of your monthly cost is a loss for those first 3 months, more money to recoup.
Once you are going, dropping in another server costs you nothing but the server costs and setup, the rest should be covered by your other servers. But unless you get 100 customers out of the gate, it is a tough go.
As for overselling, i find diskspace more of an issue than bandwidth.
Chet
IBanners
10-02-03, 01:43 PM
Originally posted by Robert:
Ok so you're getting a server from Rackshack. with 700GB of bandwidth, now what makes you better than the other 14,000 dedicated servers that also offer paid hosting with a 700GB limit on each server? We aren't saying you won't make a profit, we are saying it won't be right away. Unless you offer some dirt cheap prices and oversell like there is no tomorrow. But in the long run, it will bite you in the ass and everyone will not recommend your service.
If you make as much money as you claim, than I would suggest sticking to what you do best.
People always pose this question "What will make you better then the million other hosts out there?", well, I will try hard to offer good support and good uptime, but will I be better then all the other hosts out there? Probably not, but I dont need to be. How will I get customers instead of them going to other companies? Advertising, and other promotions. We have already talked about how much money I make, its not that much after all expenses (Well its sweet for a 16 yr old). I am not the kind of person who does one thing, my passion is business, and I am not limited to one area. I appreciate all of your comments though :) and thanks for claryfing certain things chet.
IBanners
10-02-03, 01:45 PM
Maby I should be an intern at some hosting company lol. That way I could learn the ropes, and see if I really want to get into the hosting biz. Anyone want to take me up on the offer? haha.
Hi IBanners,
There is nothing wrong with wanting to make a profit in the hosting industry, but you need to find why you want to do this, and what kind of operating system will be used to host your clients, so whatever OS\Hardware\Server config you choose to use it is a good idea to be familiar with the common adminsitrative tasks for your OS of choice.
Now with that said here is what I did:
1. Pray
2. Start a business plan for your goals i.e. expenses,goals current and future.
3. Register a domain name.
4. Protect your personal assets by incorporating. It's not a bad idea to get a lawyer for this as you will make contacts and have someone to give you advice should something unexpected happen.
5. Get some accounting software to handle your day-to-day book keeping.
6. Get a good accountant.
7. Design your site (while all this is going on).
8. Be prepared to NOT make a million dollars in one day let alone $50 in the first month.
9. Be prepared to be rejected by people.
10. Be prepared to learn discipline.
11. Prepare a marketing\advertising strategy.
12. Be prepared to spend money because you will not do this with $20.00 as you will have some expenses that exceed this guaranteed.
13. Hope for the best and expect the worst.
14. Be different.
15. Do things right, and be professional.
16. Work within the resources given to you.
This is strictly my opinion and some of the things I did, so your mileage may vary.
To summarize the above it would be a good idea to plan things out, be patient, and know the territory a bit or at least try to know it so you can guage your first steps.
Let us know how you do and what your thoughts are.
Take care.
-Bones
Originally posted by IBanners:
Maby I should be an intern at some hosting company lol. That way I could learn the ropes, and see if I really want to get into the hosting biz. Anyone want to take me up on the offer? haha.
you might laugh but thats how I got started , hosting is one of the few places that ppl can jump in without training which isn't a good thing . can you imagine a fire fighter with no training? or a *****? :eek: peoples businesses depend on their hosts .
vBulletin v3.5.4, Copyright ©2000-2012, Jelsoft Enterprises Ltd.