Web Hosting Pricing

There has been a trend in pricing for web hosting services over the past couple years…it keeps getting cheaper by about $1/year over the last 5 years.

What happens when they bottom out on pricing? Well…this is exactly what we’re seeing right now in the industry.  The providers keep adding more features and more space. They have also been adding this and many other features for the last few years with the price decreases. We now see hosts with unlimited bandwidth and web space where you can host unlimited domain names.   HostMonster is a prime example.

More hosts are now doing away with the free domain name and making users pay for a cheap domain namelike Ipowerweb and PowWeb.  There are still some good hosts that include it all, but they are up around $5.95 per month versus the $4/month crowd that offers the domain name for about $15/year. So it’s pretty much a wash because with those $5.95 plans you also get a ton of features.

The biggest problem we have had over the years is that hosts keep trying to get you to pay for many years upfront. Then some have bad cancellation policies that don’t allow partial month or partial year refunds! Make sure you read all the fine print before you sign up for any web hosting plan. This will enable you to get a refund if you’re not satisfied with the plan you sign up for.

I was talking to a friend that just started a website about police equipment and he was saying that when he was looking at web hosting options he was lost when it came to all the features. He didn’t know what half of it meant and he chose one that had the most “unlimited” options. He almost started out with a free web hostingplan. But don’t be a victim of overselling…these hosts don’t always live up to their word. They can’t be providing you unlimited space. There is always some fine print about how if you have excessive usage or abuse the system you can be suspended for any reason. This happens quite often at ALL hosts. If you have extensive usage on disk and traffic you may want a VPS system.  Then the next step up is a dedicated server – this enables you to use as much as you want. Think about it logically – if you only have a 250GB harddrive in a server – how can they give you unlimited space? They can’t. You’ll end up losing your files and waste a lot of time trying to get reactivated because they usually have a zero tolerance to those who actually expect what they buy!

What’s the next move in web host pricing? Anybody’s guess…they have dropped the price to the best they can and they can’t give more than unlimited. So…the next year or two should be very interesting.  It’ll probably come down to who is more creative in the marketing and provide the best support.

Online Merchant Account for Your Site

Recently, I was looking online at various merchant accounts that integrate with websites. It was a lot of sorting through junk and I decided to do a post so you can save time.

There are a couple different types of merchant processors that allow you to obtain an account and begin taking credit cards on your site. Most of these payment processing accounts that you’ll find online are specifically for online use. However, some will offer various equipment options in case you’re in a retail business.

There are a couple things you need to be aware of when you’re searching for online merchant accounts. These include:

1. Discount Rate – this is the rate you get charged (a deduction in your revenue) as a percentage.

2. Per transaction fees – these are on a per sale basis on top of the rate you pay.  So if you’re paying 3% rate + $0.35 per trans – might want to think twice about running a credit card for a pack of gum!

3. Statement fee or monthly fee – this is not related to your number of transactions, but some companies want to charge you for sending you a statement each month.

4. Payment Gateway fee – this is for a third party gateway software like Authorize.net – that is a clearing house basically for online transactions. There are tons of reporting tools and ability to run chargebacks and such. Many of the top online accounts include access setup for free, but there is a per transaction or monthly access charge.

What are normal fees?

If you’re in retail you will pay a little less on the merchant rate – because there is less risk. This can be as low as 1.65% depending on your volume. For online businesses you can expect to pay around .5% higher +/- depending on volume.  This is in contrast where paypal charges 3% or so to start, but they don’t charge you a statement fee (they do charge a per trans fee though).

How to find the best account?

There are many web hosting companies that offer shopping cart systems and even free setup on payment gateways – perhaps they will help you get your shopping cart setup – you could ask them which merchant account provider is the easiest to setup shop with. You can also look online for merchant account reviews.  Sometimes these can include valuable info on comparisons – these review sites often list the most popular accounts and show you the fees of each. Sometimes they may even list user reviews. 

Paypal: Good or Bad?

This could be it’s own post right here, but I’ll summarize. Paypal is good for quick payments to and from your account. It’s not as robust as a full merchant account. If you use their website payment pro – they charge you a monthly fee. The good part about this is they have a large developers network and good documentation to build it. Most web hosting servicesthese days include the paypal shopping cart as well. You might try HostMonster, BlueHost, or Ipowerweb.  This is usually a system for beginners and if you do volume in the thousands per month – you can find better rates and a custom solution that will better suit your needs.

Good luck!

Yahoo Domains

Yep. They did it. They jacked the price up to $34.95 on the renewal years for domain names.

Yahoo has gone off the deep end here.  They start by getting people in the door at $9.95 per year and they try to get you to register for multiple years with the scare tactic that your price is going to be $34.95 after that.  This change affects millions of domain names.  I’ve been in this business a long time…got into it when domains cost about $50 per year to start.  I started out with NetSol, then Verio, then Godaddy, and Registerfly. Finally, settled back down at Godaddy after trying many others.

Over time – the price of domains had come down to about $7-8 per year. This was the good ol days of domain pricing when godaddy had the best pricing in town. Then ICANN started letting the registry get rich off the deal and they allowed extra charges for domain name registration that goes straight to the registry that registrars have to collect.

We are seeing a reversal in pricing right now on the web. Prices are rising. When will it stop and level off? We have no idea. The registry (NSI) wants to keep raising their fees and therefore – raising the price of domains. We have some large registrars like register.com, godaddy, and networksolutions – along with Yahoo – that are starting to raise rates because they control such a large part of the market. The other share is controlled by Tucows (which has resellers, but they don’t sell domains directly).  Independent web hosting services use tucows a lot to offer their customers domain names.

Why is this Yahoo Domain Pricing change a problem?  It’s the writing on the wall…when will they change the price of the Yahoo Web Hosting? I don’t know, but I don’t like the prospects here. They are already using the tactic of switching your price. They start you out just under $9/month for the first 3 months then they jack you up to about $12 after those first 3. They want you to get in there and build a website…get used to there template system and use their features that make it almost impossible to transfer your site – unless you want to rebuild the entire thing from scratch.

It’s just sad. They don’t even offer good service (I’ve had services through Yahoo in the past). They are already one of the more expensive. It would probably do the company and all their customers a favor if they would sell to some other company and do an overhaul of there services.   If you’re with Yahoo – you should probably get out now-  you can compare hosts on the web.