How Does Your Webhost Make a Profit
Web hosting can be a profitable business. These days, there is a proliferation of web hosting services. If you own a website for your business or for your own personal use, you are probably wondering how does your webhost make a profit?
Most web hosting services make a profit by charging their customers a monthly fee. Although they may offer some form of discounts, they always make sure that the fee they collect from you covers all their expenses and allows them to make some money. And since customers will tend to stick to their services and keep paying monthly fees, they earn a handsome residual income.
A greater number of web hosts these days earn money by becoming resellers. They actually lease a dedicated server from another company and then re-sell the use of that server to other people for a profit. They market themselves as web hosts but are actually people who do not own their own servers or other equipment. The major drawback of this is that the reseller has no control of the technical site of the business should there be a server crash or any other technical problem. He will be at the mercy of the main company from which he has leased the servers.
Resellers do not have to be computer experts and can run the business without spending vast amounts of money buying equipment. However, since customers do not know he is a reseller, they will call him when they need support. If the servers are down or have crashed, the reseller will have to face a lot of angry customers without being able to do anything about their complaints except pass them on to the server owners.
There are also affiliate web hosts. As an affiliate, the web host does not do any technical support for the customer. This is to the web host affiliate's advantage as the person doesn't have to worry about any of the technical aspects of the business. The biggest drawback though is that the web host affiliate does not own the customer. The original web hosting company does. Another thing is that the affiliate won't be earning much unless he can drive a great amount of traffic for the web hosting company he is affiliated with.
The web hosts who offer free web hosting earn money by posting as many ads as they can possibly fit onto the customers' site. The web hosts have to earn money from somewhere and since free hosting means they can't collect any fees they earn money through the ads they post. Most websites hosted on free services are swimming in countless banner ads, pop-ups and pop-downs.
Although they may attract a lot of customers who are still unaware of their practices, most customers leave after a while and find other alternative hosts for their sites. The major drawback of free web hosting is that there is no guarantee that the web hosts will remain in business. Most free web hosting services close shop after a few months. Another thing is that free web hosting services offer no support to their customers even if they boast of 24/7 customer support.
About the Author:
Shane Stafford contributes to the hosting review website WhoIsHostingThis, which has reviews of hosts such as NetFirms, MidPhase and VPS.net.
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