How dirt cheap hosting providers exist?

[Sulphur]

I have seen many hosting providers providing hosting at dirt-cheap rates. How much margin they will make in each sale? Who provides them with hosting at such as negligible cost?

 

[tazarbm]

How much margin they will make in each sale?

um, this you'll have to ask the hosting providers directly, I doubt that anyone knows the profit margin of a random hoster

Who provides them with hosting at such as negligible cost?

they're the ones providing the hosting, and they set whichever prices they want. Also, you need to remember that in 2nd and 3rd world countries prices are different (usually way lower) than in 1st tier countries, and for those guys these prices are normal, they're not considered cheap the way you consider them

 

[Dopious]

Find dirt cheap server providers and use DirectAdmin´s cheap license and you are good to go. Servers are cheap, competition is built on volume not quality so you need hundreds of thousands of customers before making good money.

 

[Sulphur]

um, this you'll have to ask the hosting providers directly, I doubt that anyone knows the profit margin of a random hoster


they're the ones providing the hosting, and they set whichever prices they want. Also, you need to remember that in 2nd and 3rd world countries prices are different (usually way lower) than in 1st tier countries, and for those guys these prices are normal, they're not considered cheap the way you consider them

I agree, Will reseller hosting help in starting up a hosting company? From where do these people get the hosting? Do they setup their own servers? But what a person who is in the initial phase do to avoid high server costs?

 

[MKSKS]

How much margin they will make in each sale?

They make money by scaling the number of users.
Most of these are reselling cheap servers or cheap reseller hosting.
As a result most of these have an awfull service.

Like they setup a cheap server for $100 a year.
Then they sell cheap shared hosting packages to hundreds & thousands of people.
That's how they make profit and also because of too many websites on a single cheap quality servers the service and performance becomes awful.

Wondering how can servers be so cheap?

That's because some of them are built on refurbished hardware while others use desktop grade 2nd hand/refurbished hardware.

Who provides them with hosting at such as negligible cost?

There are so many providers just goto the web hosting related online communities you will find them.

 

[tazarbm]

I agree, Will reseller hosting help in starting up a hosting company? From where do these people get the hosting? Do they setup their own servers? But what a person who is in the initial phase do to avoid high server costs?

I don't know the answer to this, so I can't comment on it. All I know is that I've seen hosting companies selling reseller plans, but those are more expensive than the normal (shared) plans.

If you buy a reseller plan I think the parent company sets everything up for you and all you have to do is add your logo and stuff and then you can sell the hosting plans but the parent company handles everything. I think this is how it works, but I'm not sure, I'll better let someone else address this

 

[Sulphur]

They make money by scaling the number of users.
Most of these are reselling cheap servers or cheap reseller hosting.
As a result most of these have an awfull service.

Like they setup a cheap server for $100 a year.
Then they sell cheap shared hosting packages to hundreds & thousands of people.
That's how they make profit and also because of too many websites on a single cheap quality servers the service and performance becomes awful.

Wondering how can servers be so cheap?

That's because some of them are built on refurbished hardware while others use desktop grade 2nd hand/refurbished hardware.

There are so many providers just goto the web hosting related online communities you will find them.

Will the site be impacted or easily hacked if using a cheap hosting service?

 

[MKSKS]

Will the site be impacted or easily hacked if using a cheap hosting service?

That's should be obvious if it's cheap & bad quality that means the owner doesn't care anything apart from keeping the servers crawling instead of running them.

 

[Ashk881]

I have seen many hosting providers providing hosting at dirt-cheap rates. How much margin they will make in each sale? Who provides them with hosting at such as negligible cost?

The dirt cheap hosting that you see around are usually shared hosting plans for static websites or LAMP stack websites (Linux,apache MySQL, Php)

LAMP stack websites can be very "multi-tenant", ie you can have hundreds of them on a single server. They can be "resource stealing" but 90% of websites being hosted recieve close to zero traffic, so it's usually okay.

The margins depend on whether it's your hardware, how many employees you have and how efficient your operations are. The profitable ones aren't resellers. They host their own servers usually at cheap colocation datacenters.

To do some math, if you were to start a discount hosting plan today:
A used Dell PowerEdge server usually costs around $300-500. Electricity and internet at a cheap colocation space in US for a 10U unit would be about $200-$400 including electricity and about 100mbps 1Gbit uplink bandwidth. Meaning you would fit about 5 of those servers. So that comes out to around $3000 1500$ for the servers and 1500$ for about 20tb of SSD storage) worth of hardware and about ~$2500-$5000/yr for colocation.

You will have about ~20tb SSD storage, about 240-300 cores and about quarter terabyte worth of RAM in that configuration.

Considering you give your customers about 100gb/mon worth of bandwidth and 2gb of storage 7$/yr.. with that kind of hardware you would easily host 10,000 customers on a single 10U rank. That's $7000 in revenue per year.

Charge extra for more domains and emails and you'd easily make about $10k/yr on that single 10u rack.

So you'd recoup your server expenses in the first year and from the second year onwards it would be pure profit.

Considering you spend $4000-70000 on the colocation per year that would $3-6k of profit or about 30-60% depending on how good you are at keeping your colo costs low.

 

[Sulphur]

The dirt cheap hosting that you see around are usually shared hosting plans for static websites or LAMP stack websites (Linux,apache MySQL, Php)

LAMP stack websites can be very "multi-tenant", ie you can have hundreds of them on a single server. They can be "resource stealing" but 90% of websites being hosted recieve close to zero traffic, so it's usually okay.

The margins depend on whether it's your hardware, how many employees you have and how efficient your operations are. The profitable ones aren't resellers. They host their own servers usually at cheap colocation datacenters.

To do some math, if you were to start a discount hosting plan today:
A used Dell PowerEdge server usually costs around $300-500. Electricity and internet at a cheap colocation space in US for a 10U unit would be about $200-$400 including electricity and about 100mbps 1Gbit uplink bandwidth. Meaning you would fit about 5 of those servers. So that comes out to around $3000 1500$ for the servers and 1500$ for about 20tb of SSD storage) worth of hardware and about ~$2500-$5000/yr for colocation.

You will have about ~20tb SSD storage, about 240-300 cores and about quarter terabyte worth of RAM in that configuration.

Considering you give your customers about 100gb/mon worth of bandwidth and 2gb of storage 7$/yr.. with that kind of hardware you would easily host 10,000 customers on a single 10U rank. That's $7000 in revenue per year.

Charge extra for more domains and emails and you'd easily make about $10k/yr on that single 10u rack.

So you'd recoup your server expenses in the first year and from the second year onwards it would be pure profit.

Considering you spend $4000-70000 on the colocation per year that would $3-6k of profit or about 30-60% depending on how good you are at keeping your colo costs low.

Maths looks interesting. Though I think only few percent of hosting providers with dedicated data centers are profitable considering cute-edge competition.

 

[seothatranks]

I have seen many hosting providers providing hosting at dirt-cheap rates. How much margin they will make in each sale? Who provides them with hosting at such as negligible cost?

They might be earning in other ways like selling your data. That is why I suggest you to go with reputed hosting providers only.

 

[MKSKS]

reputed hosting providers

And what makes you so sure that these reputed ones don't sell?

 

[Derro]

It costs too much to have your servers, a lot of web hosting companies use Amazon, Google, or Microsoft servers to meager cost.

 

[Michigan00000]

Yes sometimes I ask myself how these host even make money.....

 

[MKSKS]

is tohost.in good because they said 99 percent uptime also provide cPanel Should i buy hosting and try

With that just a month old website I would only use it for testing no production websites.

Better go with hostkoala if looking for cheap hosting.