Targeting small customers

[zwtun2000]

Hi there,

I have researched hosting business for some time, and i found out there are some number of hosting sellers providing less than 1000 MB + multiple domains with cheap prices. The price range is between $0.99 to $3.0. They are targeting small customers who doesn't want to spend even more 1 cent for what they don't actually need. Unfortunately, i was trying to set price like them in my reseller panel. It seems that i can't sell $ 1.00 dollar hosting with mysql + suppose 400 MB webspace.

Do you guys have any plan to enter peny market? It does make huge amount of sales according to my market research. Why we can not do that!

[Milen]

zwtun2000, as far as I know, we do not have any plans for entering the "penny market". Speaking from a marketing point of view (although I am sure that our marketing manager Nickolas and our chief financial manager Nick Blaskov are much more competent than me on this matter), it is not worth it, because the margins are too small (if any) and the risk is too big.

[Guest]

True, especially since RSP has to consider all the fees and expenses that arise with signups. Plus there is a very large chance that most sales would be "fraud" as the cheaper the packages the cheaper the people, haha.

Regards,

[zwtun2000]

Pls make sales from everyone's pocket

I do not strongly agree with you. If this small market make risk, why people still using coins and one dollar notes in real market transactions? I assume that 99.99% of human use that for everyday without risk. In addition, there are many customers like teenagers who do not afford to buy your one year package for $ 40. I suppose not only from rich countries but also from poor asian nations(may be $ 1= 30 thai baht $1= 1500 in other asian currency). They need only small space, and 1 mysql may be used for photos gallery. $1 or $1.5 packages are not making fraud, pls use search form in hostsearch.com and put $ 1 or less, $ 2 or less. There are many of them. Please look into 99.99 % of people wallet($1 *12 months + domain name $ 4 = $16/year). One million domains may make $ 12 dollars or more for that kind of package in teenage market or asian mraket.

[Guest]

I do agree with you zwtun on this, however this is a decision taken by RP management, so I am sure they must have thought this out.

[Milen]

zwtun2000, unfortunately, I cannot agree with you and I find your analogy about small currency values completely irrelevant to web hosting. One-dollar accounts cannot cover even the cost for server space and connectivity, not taking into account technical support and server management costs at all and at $4 per domain per year we are already loosing approximately $3 per domain registration (a loss that is otherwise covered by the price of the hosting package). I am sure that there are plenty of participants even in the a-dollar-per-month hosting market, but I do not even want to imagine the quality of technical support that you can get from such a hosting provider (this is, of course, if you can get any support at all). Moreover, there are plenty of free web hosting providers that offer a better deal that you will find it extremely hard to compete with. Many free web hosting providers offer the packages that you are reefing to, some of them even include pretty good customer support into the deal at the price of a small (or large) advertising banner. These providers draw their revenue from advertising, but even the free hosting market is pretty saturated and the competition there is extremely strong.