Suggestions to Ploghost

Hi Mon,

To clear things first, I own plogHost. Second, thanks for the feedback.

1) We do have the 3rd-party one-click install service called Fantastico. We stopped aggresively promoting them because of one basic flaw. It cannot install the scripts in your root directory. The install/uninstall feature only allows for creation and deletion of a subfolder. To compensate for that, we actually help install client’s blog and migrate them from other free-hosted service such as BlogSpot at no additional cost. I am not sure if DreamHost has the same or different feature altogether.

2) When I founded plogHost 3 years ago, I had the opposite sentiment. Our target was Filipinos who are either uncomfortable with credit card transactions or do not have credit cards at all. That was my original selling point actually. I believe that in this very competitive market with cut-throat pricing, one needs to focus on the vertical and build a solid brand around it.

3) While I know the benefits of referral rewards, we did not really maintain an active program. IMHO, it is better to get new referrals because the referrer is actually using our service and is satisfied by it and not because the one referring will just get a cut. In the same sense, I think it’s more credible/sincere to refer a service or product when you do not have “personal interest” in it.

4) I want to draw the line between a “cheap” service and an “affordable” one. While DreamHost may be cheaper on a byte-per-byte basis, they are still not that affordable. Our lowest package of $1.50/month plan is way more “affordable” than their dirt-cheap $7.95. Not many bloggers need 1 Terabyte of bandwidth.

Some of my reasons here might seem technologically-backward but this backward approach allowed us to survive profitably for years.

We do recognize that the web hosting industry is a vicous market and we cannot be everything for everyone. As a matter of fact, we sometimes refer DreamHost to clients we can no longer service and no we don’t get a cut from Dreamhost for referring them.

Thanks again for your insight and feedback.

Though I don’t want to go into the issue of “overselling”, that’s practically the reason why DreamHost is able to sell at that price point.

Actual bandwidth cost of 1TB is nowhere near $10. It actually retails to around $100 to $125 per terabyte.

They offer you 1 TB but if you only consume 1GB, they will resell the rest of the 999GB to others.

Basically, they can sell 100 accounts at $7.95 each but may only actually use up 10GB of bandwidth per account. At the end of the month, they earned $795 on all 100 accounts and only actually used up 1,000GB.

But what happens if all of these accounts completely use up their allocated resources? You’d end up like Wowowee.

To prove this, we need to top up and go into one of their dedicated servers:

60GB space and 4,000GB bandwidth for $150 per month.

Just how many $7.95 (20GB/1TB) can you really put in there? Common sense will say just 3 right (for a total of $23.85)? But they don’t just put 3 there. I think they’ll have to put in around 20 of these $7.95 in order to break even with the dedicated server’s cost.

And in order to significantly profit, they’ll need to at least double or triple that number of accounts cramped into a single server.

That means they are overselling their resources by as much as 40 to 60 times their actual capacity.

I have to give it to them though, they handled the “overselling” strategy-risk mix quite well.

wrencelot:

We used to offer direct Paypal payments but you might already know why we discontinued it.

We’ve been using Xoom for over a year now actually since it supports Paypal and CC payments.

Thanks again to you and Mon for bringing this up. I guess it’s a matter of re-writing our website’s copy to highlight the most important information.

Too many fake orders from South East Asia.