Resellers getting hurt by new changes

[Midihead]

Houston, we have a problem.

Since the new package updates occurred, I've been getting complaints from my clients. Currently I charge $20.00 for 1 gig of disk space and 15 gigs of bandwidth (fairly close to a similar package you offered clients directly). I am currently on the old Reseller 3 account, operating at 6,000 megs of disk space and 35 gigs of bandwidth to allocate. Basically, I'm able to host 2 accounts before I come close to running out of bandwidth allocation. What I'm hearing is, "Hey, I can get 1,200 megs of disk space and 80 gigs of bandwidth for $16.95 a month! Can you match that?" Of course I can't. So what is the point of being a reseller when you can't compete?

With the new reseller packages, I'd have to DOWNGRADE to a Reseller 2 package and pay an additional $13.00 a month for only an extra 5 gigs of bandwidth to allocate...still not enough for more than 2- 1,200 meg hosted accounts under my current package strucure. Not to mention, now I have to drop my price, so I'm left paying the majority of the bill. Everybody say it with me now: "That's not right!" Regardless of whether or not they use the allocated bandwidth (most don't even come close) if it isn't there to offer, how can we compete? It's like Westhost just sort of kicked it's resellers to the curb.

We have to be able to at least match what you guys are offering your hosting clients, or (I reiterate) WHAT IS THE POINT OF BEING A RESELLER? :x

Come on guys...did you really think this through before execution?

[WestHost - BErickson]

Midihead,

Thanks for your post. I wanted to make sure you were aware of 2 things. You are selling VPS technology and you have the ability to oversell your space and bandwidth.

Hey, I can get 1,200 megs of disk space and 80 gigs of bandwidth for $16.95 a month! Can you match that?" Of course I can't. So what is the point of being a reseller when you can't compete?

First off, there is always someone that is going to try and offer more than you for less. Can you compete? Absolutely. Do you want to? It depends on a number of factors.

The competitor isn't offering a VPS solution. They probably aren't going to offer a high level of service and are assuming their customers won't use the allocated space and bandwidth (those numbers are well below their costs).

You could "oversell" your space and bandwidth in Reseller Manager by allocating more than you have. As the total COMBINED usage of your client's accounts nears YOUR total limits, you would either upgrade your reseller package or purchase add-ons.

All highly competitive hosting companies lose money on a percentage of their clients. Some accept the losses on those few, while others kick off the clients that REALLY use the space and bandwidth, overuse support services, or cost them in other areas (unethical in our opinion).

With the new reseller packages, I'd have to DOWNGRADE to a Reseller 2 package and pay an additional $13.00 a month for only an extra 5 gigs of bandwidth to allocate

The current Reseller 2 Package is not more that the old Reseller 3. It's about $8 less. With the $8 savings you would also see an increase in 5 GIGs of space, 5 VPS's and 4,000 MB of space. It sounds like you took advantage of a promotional special and got a free upgrade.

We have to be able to at least match what you guys are offering your hosting clients, or (I reiterate) WHAT IS THE POINT OF BEING A RESELLER?

You can't compare our reseller packages with our normal packages. Our reseller packages assume "overselling" by OUR resellers and take into account much higher usage than our normal packages. You'll find similar differences in competitive offerings. Nevertheless, you absolutely CAN match what we are offering.

Come on guys...did you really think this through before execution?

We did think this through. We spent weeks looking at competitors, analyzing our existing packages, usage reports and pricing, and in the end, released an offering which is more competitive and gives our clients (normal and resellers) more for less. I'm really not sure how you can think resellers are "getting hurt by new changes".

Nonetheless, it doesn't matter what we think. If our clients don't feel our offering makes sense, we need to change things. We DO appreciate your feedback. We want to make sure you are comfortable in your ability to compete. Otherwise, you're right, "what is the point of being a reseller"?

Again, thanks for your post. I'd appreciate any of your thoughts.

Best regards,

[Midihead]

Hi Brian,

It looks like I owe you a bit of an apology, then. No one mentioned that I could "oversell" the bandwidth. At a previous hosting company, this was not allowed. When you allocated your allotted bandwidth, that was it. I suppose this information would have been a helpful tip that could have been included in my welcome email. Certainly this confrontation would have been avoided. :wink:

[Midihead]

Sorry Bevan...got your name confused with another Erickson that I know named Brian. LOL!