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How do VPS providers do it?
I was considering becoming a VPS provider, but after looking at the expenses, it doesn't add up to me.
(Based on paying upfront all costs for 12 months, then expecting the service to pay for itself with little or no turnover.)
WHMCS - $250.00
SolusVM - $120.00
Node from DataShack (with /27) - $722.00
This excludes cost of advertisement,seo,staff,payment gateway fees & many hours put into the project.
How do providers do it?
Comments
That is the yearly price... most providers can earn that added together in a month
Start small and re-invest, many do it as a part time or 2nd job.
Depends on the specifications of the node.
It's all about price negotiation techniques.
The price of an IP is $1.00 - $1.20 a month, yet some providers are selling VPS's for $2-3 a month. Given the cost of SolusVM, that's another $1 added.
It doesn't make sense.
That's not what I ment, I ment the actual specifications of the node (ram, hdd etc. etc.)
You have a nice built node, and still it'd be limited by SolusVM, WHMCS & IP costs.
I thought that other than a few idiots, the lowend crowd is only a small part of the business for most hosts.
That's not true, there's a huge difference between splitting the costs of SolusVM & WHMCS between 1000 customers and 100. these providers usually choose to get bigger subnets than a /27, because it's more profitable. (nodes with 64-368GB ram and /24-/20's of IPv4)
In fact I thought about this as well and did a bit research and I came to the conclussion that I would never be a LowEnd host :P
I think it's just a recommendation.
I believe that's not his.
The low end can be profitable. Although we had unprofitable months at the start of our business (this was planned for) we're now operating at a profit. Although we initially targeted the low end and continue to do so we're seeing a larger mix of non-low end clients appear on our systems.
It's just a recommendation
I don't have enough experience with Linux/OpenVZ to start my own host 
Who needs experience, just summerhost like 60% of LET hosts..
I think Incero use to give free IP's for some of their dedi's. I'm sure a few other providers do this as well, if you purchased the right package.
Also I think OVH use to give free IP's once you pay the per IP setup fee there is no additional monthly fee, not sure if that has changed or not.
Haha yeah I'm not that type of person:P And apparently I'm even a bit too young to form a company here in Germany.
Better to not be that kind of person than to be it.
For example take hetzners ex40ssd dedicated server.
http://www.hetzner.de/hosting/produkte_rootserver/ex40ssd
CPU: i7-4770
RAM: 32GB
SSD: 240GB
Server cost: (59€ ~ $77)
IP: /27 (30 IPs) (40€ ~ $50)
SolusVM 8€ ~ $10
Total cost: 107€ ~ $138
For example sell 28 VMs 1GB of ram for 5.5€ ~ $7 leb price of course you will sell a little higher price to other customers.
28 * 5.5€ ~ $7 = 168€ ~ $217
And you could theoretically earn 168 - 107 = 61€ ~ $79 per node every month.
Best Regards!
Generally, massive overselling . . . and keep in mind, many low end providers are making very little profit.
Some providers would start their business by taking out a loan, or investing in buying their hardware, then once that is done you would only have to pay for licenses, staff, gateway fees, seo, advertising, and electricity/power/bandwidth for the servers. That makes it more profitable, or you can just start small and over time you can make enough money to go ahead with such a plan, alternatively you start small and as you grow you get better reseller deals. There are many ways to get this done, its all depending on your size with your providers and your negotiating skills.
OP's yearly price is for a single node. For the subsequent nodes you wouldn't have to buy WHMCS again and the SolusVM price is $2.50 instead of $10 per month, so all nodes after the first are cheaper. Prices for colo and IPs are generally somewhat negotiable, especially once you get to be a larger and more long term customer of your datacenter and if you own your own equipment.
Price is only $2.50/mo for a 2VPS node. For a regular node its $10/mo
So, you can use free software VM panel.
Like I told you last night on Skype, not all providers go 12-mo CIH. I personally like 6-mo DATP, because it allows a faster expansion safely.
Can you lengthen out those abbreviations?
After posting this thread, I've gotten some amazing offers from reputable DC providers.
Thanks all!
Cash in Hand, Demonstrable Ability to Pay.
If I were a host, I'd start out by investing a fair amount of cash upfront, would it only be to cover basic expenses and business risks. If I initially didn't have lots of funds, then I would use alternatives to WHMCS and SolusVM to be gentle on the funds. I guess I would rent dedicated servers from reputable companies (i.e. OVH, Hetzner, etc), make a profit, and save this profit to gradually buy my own hardware.
I wouldn't do it, though, for tons of reasons; the primary one being that I'm in no position to be a host (no time for such a responsibility). But it definitely sounds possible if you do things right. Besides the hardware, remember that eventually, customers deal with you and your team, so try to be as professional (and kind?) as possible.