What's about 0,5$/GB hosts?

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dino14

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Hello,

I was always wondering how some hosts sell at prices lower than 1,5 $/GB (1$/GB or even 0,5$/GB). This seems like a scam for me...
I have some good dedicated servers for my minecraft comunity bought from a quite cheap hosting company in my country and there are like: 50 $/month, Intel Xeon E3-1271V3, 32 GB RAM, 2 x 240 GB SSD, 1 Gbit/s bandwidith and this is mainly the best offer of the market. OVH is more expensive for example, and it has no real suport (completly unmanaged) and just 250 mbit/s bandwidith. So the point is that dedicated servers are much more expensive that minecraft shared host/vps hosts selling for minecraft servers (per GB/CPU/Bandwidith,etc).

How can a company offer minecraft hosting/vps hosting so cheap in that situation ? For example you can find a 16 GB RAM minecraft host for just 12 $, but never a dedicated server with 16 GB ram under 20 $ or even at the 32 GB level the same thing aplies. For those 12 $ you get also a panel and suport, and maybe even a free dns. How could survive such a host?
Basic maths: If buy a ded with 256 GB RAM at 130-150$ (the cheapest posible),whmcs, multicraft,addons,gateway fees, administration fees (paperwork, acountancy, taxes),suport agents...

So let's asume you pay 130$ for that dedicated server (which is very low), whmcs is about 19$, so that's about 150$ already. Now with an average of 2,5 GB per server, you have 100 servers so you pay about 40-50 $ for multicraft.
Now payment fees. If you have only paypal as payment gateway the fee is 0,3$ per transaction and 2.9%. If you are lucky, the average transaction is of 10$ (considering those prices, they must pre-pay), you pay about 0,69$ per transaction. So your paypal fees per month are at 17-18 $.

So this is the maths: 256$ (what you get if you sell all your ram with 1$/GB) - 130$ - 19$ - 40$ - 17$ = 50$ per month left for all the rest and (maybe) a profit. Please note that I've quite taked the minimum price for costs and the maximum price for sales (you can't always have 256 GB sold, you could have a 220 GB avegerage, but no more...)

Minimum costs prices: 196 $ (without taxes, addons, templates, suport agents, aditional ips, storage, acountancy, etc). If you sell at 0.8$/GB you are already at clear loss. Let's start a discusion from this.
 
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DylanH

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Overselling (to an unreasonable amount), and using crappy/sketchy providers. All while still making next to no profit. My theory is that people (typically kids 14 or younger) try selling at such low prices because they want lots of customers (for those bragging rights) but couldn't care less about making (or loosing) money. My other theory is that they (still the kids 14 or younger) genuinely think they can turn a profit, if they sell enough servers. And while that probably is true (but still barely any profit at all) at a small/medium-ish scale, it definitely doesn't scale well when you hit medium-ish/large scale.

As much as I (and lots of other people probably) appreciate your post, unfortunately this has been brought up a few other times, but it doesn't seem to stop >$1/gb hosts from popping up here. It's pretty unique to MCM though - you go outside of here and people are honestly surprised $2.50/GB isn't a scam.
 
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Perhaps

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In a reply to the post above.
That all is mostly true. We mostly focus on colocation and dedicated server however and a single 32 GB server in a 1U form factor doesn't cost more than 18 USD per month to sustain. Having a lot of space means that the bill is high, but if you can cram a lot of people onto a single server that is actually capable of supporting all the trafic it isn't even a problem. Lets say you spend in total of 30 USD a month to colocate your own server with 64 GBs of RAM and for a WHMCS license. You can easily sell at 75c/GB/month an d still make a really small sum of money (profit that is). I do agree however that most hosts start off with rented hardware and don't give a single ____ about their customers or how they run their bussiness. People doing that are just hurting the market in my opinion. Most people then see it as a scam if they see a host with such low prices. While that can hold true in most cases it just speds a bad light on those legit ones. Being a part of a newly opened host I can confirm that Minecraft isn't much of a money maker in that sense, but most people will uprade to a VPS or even a dedi if they like their existing service and want more performance.
That essentially means you get more exposure in the long run and even get a customer or two more as you progress.

If you have any other questions you might want to ask me about it feel free to add me on Discord: Perhaps.#2019 .
(I can get you a nice deal on coolcation in Dallas)
 

Zelon-Jack

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I've talked to a number of the providers offering cheap $1/GB hosting, and the majority brag about turning a $20 profit on a $120 machine. While there's technically profit, you have to max out the node to turn a minuscule profit. These race to the bottom business models simply don't work or last. While I'm not too familiar with this community -- I can say it is the companies that are lowering the expectations of the customers -- not the customers being overly cheap.
 

Spenser

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you have 100 servers so you pay about 40-50 $ for multicraft.

- Pterodactyl, its free. Saves hosts money there.
 

Luh

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What people don't realise is that you make your money when you can attract customers that are willing to invest more for a better quality - which is where many go wrong.
 

BuffNetwork

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What people don't realise is that you make your money when you can attract customers that are willing to invest more for a better quality - which is where many go wrong.

Your Right But the hosting companies can only do so much, Its the customers who need to make the decision to come over or not.
 

Gatto

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This only happens here, tbh. We price the plans at $3/GB, and the people here has complained one and another and another time, every day, be it "This is a scam", "I can get the same for a dollar", etc. I've recently started advertising and selling outside of MCM and the people thinks even at $3/GB it's super cheap. ¯\_(ツ)_/¯

Your Right But the hosting companies can only do so much, Its the customers who need to make the decision to come over or not.

Just don't be a meme and have a proper brand and quality standard in place, the people will eventually come.
 
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BuffNetwork

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This only happens here, tbh. We price the plans at $3/GB, and the people here has complained one and another and another time, every day, be it "This is a scam", "I can get the same for a dollar", etc. I've recently started advertising and selling outside of MCM and the people thinks even at $3/GB it's super cheap. ¯\_(ツ)_/¯



Just don't be a meme and have a proper brand and quality standard in place, the people will eventually come.

Talk to me when you do. (;
 
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