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RAM?
what exacly $4/GB? it's RAM?
Yes
If RAM, Yes. Even the raw VPS is more than $4/GB in most cases.
Yes, it is by RAM.
Please explain.
Just look at the number of $4/GB VPS out there. Even if you don't want profit it is very hard to do. Let alone sell minecraft on top for the same price.
The thing is, minecraft hosting does not need separate IPs for each server, and uses very little disk space.
@Nick_A will probably want to explode at you, @mnpeep
The IP cost is but a minor part of the equation. Whatever that works for you guys. There are also 2GB VPS for $30/year. Who knows.
Artificial price reduction does not help the economy. If you aren't selling enough at your current price point, then lower your prices. However, I'm sure that's not the case. $10/GB is a good price these days.
We're surprisingly profiting quite a bit from this, you just need to find a host with a good price.
It isn't a price reduction, it's a different product.
Too low
Please do elaborate.
Personally, I would consider it a business risk.
Lets break it down shall we?
Why is it considered a risk?
Many minecraft hosts may have a higher premium, but that's due to the amount of additional risk they also take with it.
This is simple risk assessment here, and while lowering your prices to 4 dollars per GB may yield profits in the short term, it'll open you up for a bigger can of worms later on (possibly) especially with the quality of customers that sometimes lurks in the LowEnd-Market.
Do you mean outbound? Minecraft doesn't take more than a couple of MBits inbound (2-6, if ~500 people are connected)
The bill for the DDoS attack. Also what do you call profit? The sale price minus payment gateway fees minus cost of the VPS? If that's the business model then ok. People define profit differently. Maybe that's the issue here.
I mean inbound because that's what a DDoS usually tries to use up (read about it).
Also I'm sure @mnpeep, you want to make a profit (in terms of actually get a return on your time invested). How do you want to get that return?
Scenario: INCOME = EXPENSES
PROFIT: $0.00
Benefit: Possibly continue to grow your company?
This is a gamble due to the fact that you have NO money to expand and buy another server without going back into the negatives (as in every time you buy a server you have to invest your own money into it) and this also assumes you have a specific market you can target that will basically guarantee this working. This also assumes you want $0.00 for your time spent)
Scenario: INCOME > EXPENSES
PROFIT: $$$
Benefit: This is what everyone else does (if they're not a summer host). You have money to purchase another server. You have money to expand. You're getting paid for your time. This also increases the rate at which your company grows (leading to increased rate of future profits).
Scenario: INCOME < EXPENSES
PROFIT: ---
Benefit: You learn a valuable lesson about basic economics (assuming you actually think about it)
I define profit in terms of Income > Expenses (In dollar sense) then continually reinvesting that into the company in order to have it grow.
Great! It's not what I've mostly heard here. I've heard a lot of Profit = Income - payment gateway - cost of Hardware. So many other expenses are neglected.
Anyone else need some popcorn?
Especially when we get into licensing.
Standard/Basic Costs?
WHMCS License, SolusVM License, cost of the domain name (unless your trying to sell through an IP), etc.
He obviously hasn't thought it through. That's where the problem lies.
Most providers aim for $10/GB
I would say that the difference would be wanting happy customers, or just having a lot of customers. Then again, I don't have a lot of experience with Minecraft hosting (as @Spencer can attest), so maybe clients don't care about quality when it comes to Minecraft hosting?
Thanks @Damian, I would stay away from $4 per GB, hell $6 per GB gives me nightmares. Im sorry client please tell me how your $3 a month MC server is of the upmost importance to use right now as we handle much bigger situations. But in all honestly $6 per GB is lowest I would do.
Additionally, you tell me that you sell out at $6/gb. Why would anyone want to sell for less, just to make less profit faster?
Yup because MC a lot of the people go for the cheapest host possible, it is a terrible market to be in.
My margins are about 50% with $4/GB, so 2/3 of the server can be full and Income = expenses.
That is my point exactly... Artificial price reduction. It's not like demand is bad at ~$10/GB, but some of these Minecraft hosts are only concerned with how little they can charge. Many of them are not doing this as a "real" job, or at least not to pay their independent living expenses. Thus, they couldn't care less whether they maximize profit or not. They just want to be able to make threads like this and taunt anyone with a bit of economic common sense.
You can make more money at high demand with "normal" pricing. But saying that to them is a waste of time; they all have their own fixed ideas on how great it is to run the bargain bin. As you can seen, @mnpeep's signature proves that this thread is just a publicity stunt. He knew before posting it that he would be doing $4/GB--just wanted to get us talking about it.
After how long of an ROI?
Im not sure what costs are you working with here; however the cost of running a successful Minecraft host are not small. We operate a reasonably large Minecraft brand (4000 active servers) and have not joined the race to the bottom.