Pricing strategies for web hosting providers
The pricing of web hosting accounts vary between web hosting providers. here is a description of different pricing strategies, payment periods, account extras and value for money.
The cost of two web hosting accounts with the same "poster price" is not always equal. Different payment periods, set up fees etc. can also add to your cost.
Most web hosting accounts are given in monthly prices. But sometimes the given price is valid only if you pay for x months in advance. Common options are prepayment for 3, 6 or 12 months, and the monthly price drops when you pay for a longer period. This gives the web hosting provider more stability, and provides a good deal for the customer. But as everything moves so fast on the internet, it's not a safe bet for the customer. Your needs may change, the web hosts services may grow worse, etc, etc.
Set up fees
Some web hosts charge a fee just for setting up your account. This insures some financial stability and makes people less likely to move after a short time. A setup fee of $50 and a monthly charge of $10, adds up to an effective monthly price of $60 after the first month and $30 after two months. A bad deal if you move after one or two months, in other words.
Some web hosts include more than web hosting in their accounts. A common include is a domain name, that otherwise will cost another $10/year or more. Also check out any software (like shopping carts) and/or scripts that are included. You can save both money and hassle on this software.
Sometimes you may run out of allocated resources, and have to purchase extra resources for your account. Some web hosts have very high prices for extras, and this can throw another $50 or more into your monthly bill. If f.ex. your web site suddenly becomes more popular, you may have to purchase extra bandwidth at an unreasonably high price. Make sure this does not happen to you by checking prices for extras, and try to stay within your account limits.
When comparing the prices of two or more web hosts, different pricing schemes are confusing. Try to figure out the effective monthly price after 12 months with different pricing schemes and find the best compromise between money and flexibility. Remember to put domain registrations and various extras you know you will need into the equation.
Value for money, over-selling vs. under-selling
When you compare 2 web hosting packages, it often looks like one offers better
value for money. So why choose the one that apparently offer less web hosting
for your money? The difference in value for money could be the result of two
different sales strategies.
Most customers does not use anything near their resource quotas, so the web hosting provider can sell more resources than they have. It will work out fine in most cases, but it increases the risk of overloading their servers and connections. This is also referred to as over-selling.
Under-selling refers to the opposite. The web hosting provider sells less resources than they have, thus insuring that their servers will run smoothly and hopefully with a minimum of downtime. Even if all customers are using 100% of their allocated resources the servers will not be overloaded. The downside is that you apparently get less web hosting for your money.