I recently started a hosting business and my hosting website is presently being redesigned by a professional website developer. Under my current pricing, I offer the following three plans:

500 mb free space, 10 gb transfer, $7.95
1000 mb free space, 20 gb transfer, $12.95
2500 mb free space, 50 gb transfer, $24.95

Are these plans configured and priced correctly to be competitive in the hosting business market? I am not interested in competing with the budget hosting market.

Any feedback is appreciated.

Those sound like very reasonable prices. However, a large part of it is going to depend on what level of service you will be able to give to your customers. I'm sure you will want to be the best in that area (who doesn't) but you must be mindfull. If your customers find your service less than average, they will probably start looking at the budget hosting sites.

I beleive the business hosting market has a lot more flexibility. Although businesses like a good deal too, like Brad, said, service is going to be key. If you can convey in your message and in the way you perform that you provide superior service and support, you could probably charge a little bit more (it would also depend on the extra features you are offering). There is more to hosting than just space and bandwidth, be it those are major things.

Sorry, I didn't mean to say that I only wanted to target webhosting for businesses. Actually, I wanted to target anyone that is interested in web hosting. I guess that using 'hosting business' was a bad phrase.

If I am targeting the general audience for web hosting, how do my hosting packages look? I have no intention of competing with free web hosts or giving everything away for $1.49 per month.

How much bandwidth does the average lite user use? Do you believe that 10 gb is too high for the low end package? Should I only offer one package instead of 3 packages? Am I offering too much in disk space?

Question, are we talking about windows or Unix Hosting prices.
Also do you offer ColdFusion MX. I think Server OS makes a diff. in price.

If you expect that a large part of your customer base is going to be "lite users", I think you could probably do well if you halved each of your plans, or close to it. There are a lot of websites that won't go over 200-250mb of space, especially personal websites.
I mention this because you don't want to sell a bunch of 500mb plans if a majority of those plans used 200mb or less... that's a lot of wasted MB that could be used for new accounts.

I think your prices are too low for these packages. Many customers don't need that much bandwidth anyway and it might look too good to be true in some eyes. It also might attract customers who are (as always) just looking for the cheapest deal out there. They still expect top noth support and will leave you in a heartbeat if they find an even better deal. I'd bump up your prices by at least 30% and reduce the packages by 10-20% at the same time. Then provide world class support and customers will love you.

Chris

Thanks for the info on pricing. I do not wish to charge less than $7.95 per month for hosting fees. I would like to offer three packages that would benefit the home user, home-based business user and larger based business. What would the bandwidth, disk space and price be recommended for these three different targets?

I would think it depends on your market. If you are truly going at it as a free-for-all pricing wothout a target audience, then you are going to end up competing with the budget hosts not matter what.

But, if you have 1) anything unique , 2) special knowlkedge or skillsets for hosting, or 3) have a target or niche.. then your prices are too low. For the amount of space and bandwidth you offer, the average person just does NOT use that much.


In my opinion... truly:


Make a 5-year plan, then;

Build your site around your goals and target client then;

Build your business locally first. It is absolutely the best form of client AND you will find they are definitely willing to pay you what you are worth...raise your rates by 50%... Good service WILL prodice other clients by word-of-mouth from happy clients then;

Once you have a base with which YOU are comfortable, then expand to the wider world web. Competition is fierce.

Just my .02