So for every 1,400 customers at $10 per month, a hosting company can afford to hire a system administrator who actually knows what they’re doing. Using the above assumptions, the real answer can be found with some simple math.īy solving for X above, we find that it’s equal to nearly 1400 customers. That would assume that the company doesn’t have any cost of goods sold or marketing, but remember, the hosting company in this example has a COGS of 30%, a marketing budget of 10%, and therefore only 60 cents of every dollar they bring in is available to pay staff. If you’re paying the host $10 per month ($120 per year), and a good system administrator costs $100,000 per year including benefits, how many customers do they need just to cover that one employee?
#WORDPRESS HOSTING SOFTWARE#
The difference is that you’re not paying them a meager $10 per month, and their support agents don’t cost them nearly as much, since resolving an issue with your cell phone bill can be solved by someone making $40K per year, and doesn’t require a software engineer. You call GEICO, Anthem, AT&T, or Verizon and they’re not amazing but they do fix things eventually in your battle with them. You’ve been told by their marketing copy that they’re amazing, they have 24/7 support, phone support, and you’re expecting the experience to be like most other companies you deal with. Let’s assume you decided to go with cheap WordPress hosting and you’re paying them $10 per month ($120 per year). So marketing and COGS (servers, infrastructure) alone mean that only 60% of each dollar a hosting company brings in is available to pay salaries and all other expenses. The cost to acquire a customer in hosting is actually one of the highest out there.
You’ll need to spend time finding and hiring freelance writers who are experts at their craft. Trying to outsource for cheap content to places like iWriter simply won’t work. A well written technical article that is at least 2,500 words can easily cost $1,500. You also would need to be prepared to shell out thousands of dollars to create amazing evergreen content that will compete in this niche. We are definitely fans of the organic approach along with content marketing, but it’s a long-term play, and requires consistency and patience. Trying to rank organically with SEO for the term “web hosting” nowadays could take years, due to all the competition. If you’re a VC funded company perhaps you don’t care, but if you’re a startup or bootstrap company, this requires you get creative. 😲 This can vary base how many impressions shares and what you’re willing to bid to appear at the top of the page, and for how long. If you go down the pay-per-click (PPC) route, bidding on a keyword like “web hosting” can cost up to $20 per click with Google Ads. After all, the cost to acquire a customer in hosting is actually one of the highest out there. If the company is still trying to grow (and hopefully it is) then another 10% or so will go towards marketing expenses. That leaves 70% of each dollar they bring in to pay staff and everything else. Average Cost of Goods Sold (30%)įor most hosting companies, the average cost of goods sold ( servers at data centers) is around 30%. Below I’ll break down some of the costs and expenses a typical hosting company has.
Hosting companies are for the most part largely like others, where gross profit determines how many people they can staff for support among other things. Click to Tweet Breaking Down the Web Hosting Industry When you pay $5/month for WordPress hosting (which equates to a cup of coffee ☕), don't be surprised when it fails.
0 kommentar(er)
