One of the most common issues we discover with clients is that they were initially lured into a web host that promised an amazing deal up front. What that host didn’t tell them, was what they would get in exchange was not all that it was promised to be.

Let’s breakdown the costs of a typical hosting company.

Average Cost of Goods Sold 30%

A typical hosting company operates with a Average Cost of Goods Sold at 30%. With the remaining 70% being made available to cover marketing (10%), staff (30%), and other miscellaneous overhead expenses (30%).

Let’s examine a scenario of a package that is available for $10 per month ($120 per year). Applying our percentages above, we end up with $3 ($36 per year) off the top for the cost of the servers. The remaining $7 dollars goes to the additional items listed above which doesn’t provide much runway.

The lower end pricing ends up being a race towards the bottom, with the end result being overcrowded servers and poor performance. We don’t currently, nor would we ever, compete with these providers as we’ve learned that the trade offs just aren’t worthwhile. We’d rather give our clients a reliable service that is still priced affordable but provides better value. We’re able to do this by using multiple cloud providers that allow us to choose the right solution for each client.

Why It Matters

It doesn’t take long to realize that cheap hosting isn’t what its cut out to be. Sure it might not be a bad deal for a personal blog that can afford to go down, but the impact from downtime to a business of any size doesn’t take long to become a concern. Its always baffling that someone would be willing to spend so little on a service that is so critical to the operation of their business. It would be the equivalent of a brick and mortar business choosing a cardboard box to save money. This obviously doesn’t make sense so why make the same choice when it comes to choosing a web host.

There are many different levels of web hosting, with each level serving a different need. We could easily get into the incorporation of load balancers, content delivery networks (CDNs), and multi-node server configurations, but we recognize that not every project will need those components. While we are engineers, we don’t force our clients to utilize an over-engineered, expensive solution. We work with our clients to craft an infrastructure designed specifically for their needs, without using a one-size-fits-all approach. By using a tailored approach, we can help ensure that the solution chosen not only serves the current and foreseeable needs, but can also be upgraded in the future as needed.

We’ve learned that those clients that end up getting lured in to a cheap solution often end up paying much more in the long run even though they don’t realize that upfront. This realization shouldn’t be a shock to many businesses though because the idiom you get what you pay for has likely appeared for them at some point already. While we will certainly help clients recover in those situations, we’d much prefer to help them avoid those situations all together. Feel free to reach out to us to review the situation you may be in and see how we can help make things better.