Average profit margin for web hosting

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Posted by SuperZ, 08-09-2010, 07:16 AM
Hi, Just thought I would put this out to you all. I own a web hosting company and I'm looking at ways to improve the margins, and also interested in purchasing other hosting businesses, so this question is quite relative to the timing. Going on the basis of my current company I would say that around 25%-35% GP should be the figure, what do you people say?
Posted by Faris Aziz, 08-09-2010, 07:23 AM
Hi, Most user here including myself will NOT recommend new companies to actually purchase other hosting business because you can never know what will happen to the clientbase. Example you purchase a webhosting company containing 100 clients. On the next billing period, you will not know if all 100 will be staying or leaving. Most clients do not like companies which changes owner. Some may even move on to another host.
Posted by Server Management, 08-09-2010, 07:43 AM
To improve the margins going colo is best to be honest. Buy your licenses yearly or even buy the owned licenses. All these cost cutting ways does improve the margins alot unless you sweeten the deal for the clients and you give them a free month....
Posted by Faris Aziz, 08-09-2010, 07:48 AM
If he have spent $1000+ for the clientbase, I'm sure he do not want to spent more offering deals as he might be at loss. But it all depends on how well the company clientbase is.
Posted by Server Management, 08-09-2010, 07:51 AM
Either offer a free month to sweeten the deal or risk loosing clients because they either dont like the change over or things happened which they didnt like. I,d rather dish out a free month then risk loosing a clientbase ive just paid money for... After all you need to spend money to make money...
Posted by eLief, 08-09-2010, 10:15 AM
Do you own your own/rent your own servers, or are you currently on a reseller hosting account? Add some type of value-added service or enter a niche market and raise your pricing structure.
Posted by gotlivechat, 08-11-2010, 09:29 PM
I'd say hosting margins are all over the board - just depends on whether the host is doing volume or not. I mean, if you sell hosting really cheap, your margins will be tighter but you'll have more customers (which may make up the difference). On the other hand you sell a high-priced service but have a smaller customer base. On purchasing other companies, I guess you also have to ask yourself why the hosting company would be selling itself, especially if it has a recurring/loyal customer base already?
Posted by resellerswebhosting1, 08-20-2010, 10:57 PM
adding value added services using your reseller hosting account would be beneficial. i think so.

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