Reseller Revolt?

[frontlines]

Let me start by saying I've been a faithful customer of Hostgator for quite some time. I've been overall happy with the service and dependability. However, I can't help but get the feeling that HG is only concerned with getting new customers and not adding benefits for existing ones.

I'll give you an example. Another hosting company offers a reseller account with 60GB/1.6TB for $19.95 (plus a $50 setup). That space increases automatically every week. So I pay the same, and each week get more. Now, I don't expect HG to price compete, and I'm happy with the service, and I'm happy to pay $35/mo. for it. Have been for a long time. But when I started a chat with Sales to see if they wanted to try to keep my business the response I got was:

Me: I'm thinking of switching hosts because I've found a company offering 60GB of space and 1.6TB of bandwidth for $19.95/mo. Is there anything you can do to bump me up?
Brian: no im sorry
Me: So what benefits do I have in staying?
(LONG PAUSE)
Me: Will that space increase over time?
(PAUSE)
Brian: yes
Brian: we periodically increase space
Me: By how much and at what intervals?
(PAUSE)
Brian: about once or twice a year
Me: And how much of an increase are we talking about?
(LONGER PAUSE)
Me: hello?
(LONG PAUSE)
Me: Thanks for your help.

I mean, I was ignored essentially until I just stopped the chat. In my business if someone calls up and says, "Hey, we're going with someone else. They're cheaper and offer more" I at least try to remind them of why they went with me in the first place. Fight to keep the business, you know? I even tried to give the rep a chance to do that by asking what the benefits were. Nothing.

I'm extremely disappointed. EXTREMELY. I've not cancelled yet because I'm really not convinced about the other company, and there's a lot of hassle in switching over 25 or 30 sites. But man...what am I supposed to do? Stay with the company that won't throw a customer a bone or go to the one that rewards me every week without having to ask for it?

[quietFinn]

Originally Posted by frontlines

I'll give you an example. Another hosting company offers a reseller account with 60GB/1.6TB for $19.95 (plus a $50 setup). ...

If you think a bit you will understand that it's not possible to sell in that price, not so that their customers could actually use all the space and bandwidth. Just calculate how many accounts like that you can fit in a server...

Originally Posted by frontlines

I'm extremely disappointed. EXTREMELY. I've not cancelled yet because I'm really not convinced about the other company, and there's a lot of hassle in switching over 25 or 30 sites. But man...what am I supposed to do? Stay with the company that won't throw a customer a bone or go to the one that rewards me every week without having to ask for it?

I am really happy they didn't.
I am really happy to know that I am paying the same as others in HostGator, not more just bacause it didn't come to my mind to tell them that there are other, much cheaper hosting companies

Thanks HG, I am EXTREMELY satisfied

[frontlines]

Just calculate how many accounts like that you can fit in a server...

Actually you could get less in, right? And that would make the bandwidth make sense, right? (Right.)

I'm not just ripping HG, but I think businesses need to be competitive on some level. If HG won't compete on price, what are they competing on? Service? The service is good, but does that mean there's not better? Features? Let's face it, HG is a little behind the curve. Sticking to CPanel means they're more accessible to your average designer or random site owner, but not as powerful for true developers. (Just do a search for Ruby on Rails and see what the responses are.)

I'll digress. I'm really not looking for reasons to be jerky to HG...I just wish I would have gotten a better response from sales. Even if they didn't bump the space, he should have had an answer for how often they do that or be able to tell me why I should stay. I mean, isn't that what "sales" means? That they're going to "sell" me something? It's a tough way to run a business when you don't care if your clients leave.

Sorry you did not received a response, it is very possible that you were disconnected as we use Liveperson and the server we are on is known to lose connection with some clients. Did you try to re-enter chat?

And to answer your question, we do not compete with these types of services because most of them have not and will not be around as long as us because of what they offer. Most of these services are out to make a quick buck, and will oversell there hosting to you sacrificing support and stabability for more bandwith. At our current space and bandwith we may be less competitive the the other hosts out there, but we are able to maintain great uptime and service because of it and keep our customers long-term.

See what happens when you really use that amount of bandwith with any of these hosting services, and you will see that you are removed from there servers for "resource" issues long before that happens.

[frontlines]

I appreciate the response.

Like I said, I'm not sure if I'll try this other company or not, and I'm not griping about HG's price. I do, however, think that HG needs to look at ways to benefit their ongoing customers with some kind of real policy on upgrades beyond "we do that once or twice a year". I still don't know when the space is upgraded and by how much.

Since my original post I've checked with about 6 or 7 other well-known and reputable hosting providers who all had a plan for this kind of thing. And while I'm not complaining about the price (I make up for it with the domains I host easily), it would be nice to know that I'm valued when I'm paying in the top price range.

I'll stop going on and on about this, but it would be nice to have an answer: What is Host Gator's policy on upgrading existing member's storage space and bandwidth?

[Serra]

I'll stop going on and on about this, but it would be nice to have an answer: What is Host Gator's policy on upgrading existing member's storage space and bandwidth?

I'm sure they don't have a policy, like "every 6 months space is upgraded by 200mb". As space becomes cheaper and as other hosting companies increase their space, the space allocation goes up to remain competitive.

60GB/1.6TB for $19.95

As GatorJay pointed out, 60GB/1.6TB is basically a one dedicated server worth of space and bandwidth. A server costs $200 or so a month, so this company is paying $200 a month a selling at $19.95. A loss of about $180 per customer, per month.

In order to make money, they have to oversell by about 10 times, just to break even. That means for every server they have with about 60GB of space, they have sold 600GB and that is just the break even point. Assume they have to sell 1200GB per 60 GB server to make a profit.

As a shared user, this would really be ok because you could move your site to a new host fairly quickly and could you really use 1.6TB per month?

For a reseller, this is extreemly dangerous. You could really use 60GB and you could use 1.6TB with your customers. So, for the hosting company, you are a really bad customer. As GatorJay said, you will be asked to leave if you ever come close to these numbers. Then not only to you have to move your site, but all of your customers sites. That is difficult and takes a bunch of time.

Customer service wise, this company may be great, they may have great support, friendly chat support and the whole ball of wax, but they are going to go out of business or they will have to terminate about 25% of the accounts they get because they are actually using the resources that they were sold.

As a reseller, you need to stick to companies that charge about the same amount of money for the same services that HG offers. Companies in that range will be here for a long time. There are several choices to choose from, so if you think HG isn't the best deal, then move, but keep in mind, as a reseller, moving is difficult and hard on your customers. Little things like changes to their mail system can push customers away. Your are better off staying with HG and getting a dedicated server than moving.

I just wish I would have gotten a better response from sales. Even if they didn't bump the space, he should have had an answer for how often they do that or be able to tell me why I should stay. I mean, isn't that what "sales" means? That they're going to "sell" me something? It's a tough way to run a business when you don't care if your clients leave.

Was that sales or chat support? I didn't know you could chat with sales???

Again, it isn't a upgrade policy, HG increase spaces as the market changes. I think you will find that companies that are about the same price as HG now and offer the same space and bandwidth will continue to be more or less equal over time because the business increases space and bandwith over time as it becomes cheaper and as more becomes available to them.

I'm extremely disappointed. EXTREMELY. I've not cancelled yet because I'm really not convinced about the other company, and there's a lot of hassle in switching over 25 or 30 sites. But man...what am I supposed to do? Stay with the company that won't throw a customer a bone or go to the one that rewards me every week without having to ask for it?

Here is the real question. Why would HG need to throw you a bone? They offer good service at a reasonable price. They are doing very well because of it. I'm sure they care if you leave or not, but one reseller in a Gold? account, I'm guessing, doesn't make or break their business. Buy a couple of dedicated servers, then ask for the bone!

[frontlines]

Originally Posted by Serra

Why would HG need to throw you a bone? They offer good service at a reasonable price. They are doing very well because of it. I'm sure they care if you leave or not, but one reseller in a Gold? account, I'm guessing, doesn't make or break their business. Buy a couple of dedicated servers, then ask for the bone!

Again, I'm not asking for preferential treatment or to be treated like a rockstar because of my Copper Reseller account. My $35/mo probably means very little, or nothing, to the cashflow of HG. I know that HostGator won't be filing bankruptcy if I pull my business. But when I say "a bone" I really mean answers. It just seems that answers aren't there. And now it's like I should feel like an idiot for even asking.

The reason I haven't moved to a dedicated server is because it's the same amount of hassle, according to the sales rep I spoke last month, as going to a different provider because they have to move me to a different server. Also, I'm not sure that I really need a DS. That's why I'm examining the possibilities here.

See, I would have been just as happy if the guy said, "No, I can't give any freebies, but we can bump you to XXX plan for $XX/mo and give you the space and bandwidth you need." I mean, it's that simple. But I'm not going to feel like a jerk for asking what my host can do for me.

[frontlines]

On the upside of things, I just talked with Tim in support on an unrelated issue and he was awesome. Gave me my solution in less than a minute and actually asked if there was anything else he could do.

Thanks, Tim! You rock!

[Serra]

Originally Posted by frontlines

Again, I'm not asking for preferential treatment or to be treated like a rockstar because of my Copper Reseller account. My $35/mo probably means very little, or nothing, to the cashflow of HG. I know that HostGator won't be filing bankruptcy if I pull my business. But when I say "a bone" I really mean answers. It just seems that answers aren't there. And now it's like I should feel like an idiot for even asking.

No, you shouldn't feel like an idiot for asking. It is a critical question that too many people fail to ask. Many people look at two accounts, one is three times as big and half the price and they wonder why they should take the smaller account. Now you know. Its really not a stupid question and the truth is, HG isn't competing with those companies, so you get no bones for staying.

Originally Posted by frontlines

The reason I haven't moved to a dedicated server is because it's the same amount of hassle, according to the sales rep I spoke last month, as going to a different provider because they have to move me to a different server. Also, I'm not sure that I really need a DS. That's why I'm examining the possibilities here.

If your accounts fit in a Copper account, it is a little early to be thinking DS. When you can no longer fit in Gold, then you need to think about moving. It is a hassle to move and A TON more expensive to run a dedciated server, but it is well worth it.

Originally Posted by frontlines

See, I would have been just as happy if the guy said, "No, I can't give any freebies, but we can bump you to XXX plan for $XX/mo and give you the space and bandwidth you need." I mean, it's that simple. But I'm not going to feel like a jerk for asking what my host can do for me.

You are free to upgrade any time, but keep in mind that those other companies aren't going to give you anything better, so don't move! Just about all of the good companies are equally priced.

Originally Posted by frontlines

On the upside of things, I just talked with Tim in support on an unrelated issue and he was awesome. Gave me my solution in less than a minute and actually asked if there was anything else he could do.

Thanks, Tim! You rock!

And that is what seperates us from the rest.
We have Tim.. and 80 others that are equally as awesome.

With the plans you've been quoting (sort of adding to Serra's post) it would be impossible to offer the same level of support, speed and quality without sacrificing one or all of the three.

Our pricing structure is very competitive for what we're offering. It was also built with our company's longevity in mind as we don't oversell and even if the majority of our clients were to use their resources we would still be making a profit.

The other companies? Taking a 180 dollar loss per client would definitely decrease their level of support.

Which would you prefer:

• Support
• Speed
• Quality

or all of the 3?

If you require more resources simply let our sales team know.

Have a great day!

[chaloupe]

What about if they have 10 or 100Mbps Unmetered server? Bandwidth is not an issue anymore. The only issue is about disk space then.

You will all say that it will be poor bandwidth...We can't really tell.

But 60GB is a lot of space for the price.

For myself I would just stick with HG!

Originally Posted by chaloupe

What about if they have 10 or 100Mbps Unmetered server? Bandwidth is not an issue anymore. The only issue is about disk space then.

You will all say that it will be poor bandwidth...We can't really tell.

But 60GB is a lot of space for the price.

For myself I would just stick with HG!

They are still overselling even the space, a dedicated server will usually not have more than two 200 gig hard drives. And if they are actually using all of that space, the server would most likely also be so overloaded with accounts that performance would be the issue. Its really the same problem as bandwith, its not as much, "do we have the space and bandwith to give" but what happens when you have 100's of accounts using that much space and bandwith. A server can only handle so much.

[stonecold]

I have a couple of site that do use up close to 200 gigs and is pulling close to 6tb a month. They are with a company that is cheaper than hostgator dedicated servers and I getting dedicated server for 99 a month with almost unlimited bandiwth I tend to throttle back about 9tb but they are not one of these fly by night operations but one of the largest host in the world. Wont say there name as I dont belive thats right to do in another host forum. I in this case though it about support. If you happy with HG support then I say go full at it and keep HG if not switch. Personally I hate HG support they have been lame compared to other companies. I keep them around as the 3 or sites they host are low maintance and I just dont feel like moving them around.

[cjnoyes]

Originally Posted by stonecold

I have a couple of site that do use up close to 200 gigs and is pulling close to 6tb a month. They are with a company that is cheaper than hostgator dedicated servers and I getting dedicated server for 99 a month with almost unlimited bandiwth I tend to throttle back about 9tb but they are not one of these fly by night operations but one of the largest host in the world. Wont say there name as I dont belive thats right to do in another host forum. I in this case though it about support. If you happy with HG support then I say go full at it and keep HG if not switch. Personally I hate HG support they have been lame compared to other companies. I keep them around as the 3 or sites they host are low maintance and I just dont feel like moving them around.

Just wait till they close their doors and you are caught in the lurch. That has happened to numbers of clients, hopefully never with gator

[shanee86]

Im glad hostgator isn't overselling like so many other's these days and if I ever need a reseller account I know who I will go with and that hostgator because they have the best uptime support and servers. Or so I did when I had a shared account with them but some others say different. But as far as a bonus they are giving you a big plus with there great server's and support alot of companys use cheap servers to compete.

[Serra]

Don't think HG isn't overselling, they do oversell. The difference with Host Gator is that the amount they oversell is within reasonable limits and their prices remain high enough to cover the costs.

The combination of massive overselling and cut rate prices is what ends most companies. When the income doesn't cover what they have sold. If everyone at HG suddenly needed all of their space, Host Gator would need to expand to cover the need, but they would still be able to cover the cost.

[stonecold]

Originally Posted by cjnoyes

Just wait till they close their doors and you are caught in the lurch. That has happened to numbers of clients, hopefully never with gator

well considering they are the largest host according to netcraft and is a multi billion dollar company I dont think they are going any where soon.

[Serra]

Originally Posted by stonecold

well considering they are the largest host according to netcraft and is a multi billion dollar company I dont think they are going any where soon.

I have to agree. That company is a major player and isn't likely to go out of business any time soon. They offer extreme discount hosting and have been in business for a long time and I personally doubt they are in danger of going out of business any time soon.

However, I think that anyone who is serious about a dedicated server will see right off the bad that the $99.00 server is totally useless. A 40gig Celeron with a 100 account Plesk doesn't even rate looking at, from a reseller point of view. (no Urchin, Plesk instead of cPanel, only 1000 gig of transfer and only 512K of RAM)

Upgrading to their $139.00 server gets a dedicated user into the HG ball park with a $219.00 HG server, but the $139.00 server lacks Fantasico, Urchin, has only one IP address (extra, up to 8 for $.99 per month).

Basically, a scaled down version of HG's server. By removing the licensing fees for the better software, they are able to cut the price a bit. It would seem that if someone was interested in forgoing HG's support, thePlanet is still a better deal, though it would be about $30.00 per month more expensive, but the better software is included.

As far as how customers feel about the cheaper company, on www.hostsearch.com, Host Gator is rated 3.53/4. The cheaper company is rated 1.73/4.

Most reviewers gave it a 0.0. It only has a 1.73 because several people rated it 4.0, but there are few reviews that aren't either a 0.0 or a 4.0, so I suspect that those 4.0s are not legit.

If you want to put your eggs in their basket, then that is your choice. I'll stick with the 3.53 company.

[cjnoyes]

Originally Posted by stonecold

well considering they are the largest host according to netcraft and is a multi billion dollar company I dont think they are going any where soon.

What company are you speaking about as being the largest host?

I would question what netcraft presents. One of the problems I see in what they present is there are so many companies, that any time you try to rank a lot gets lost.

The other thing is what metrics do you look at, for example bandwidth provided, or total revenue, or how many domains do they host.

There is another problem. If you look at a provider for example thePlanet, there is this tier problem, since for example gator is one of their resllers, and we all resellers are on top of that.

Even if they don't go out of business, if they get bought by some large company with $ on the brain, you could get screwed.

Remember what Mark Twain said about statistics

[Serra]

They have "6,000 employees and a market cap of $3 billion" according to press releases.... they aren't going to out of business any time soon.

[cjnoyes]

Originally Posted by Serra

They have "6,000 employees and a market cap of $3 billion" according to press releases.... they aren't going to out of business any time soon.

Don't you love it when people won't mention the name?

I wonder if we are talking about thePlanet's new purchase?

The other problem, is that the client for such a company is such small fry that they don't give a darn about you and your problems. Gator to it's credit does care about their customers.

[Serra]

I'm not going to post the name of the other company. If you are interested, do like I did an PM stonecold and find out for yourself.

The other problem, is that the client for such a company is such small fry that they don't give a darn about you and your problems. Gator to it's credit does care about their customers.

Right, everyone of their customers end up being small fries and they do have a lot of customers. The result of that is their very low customer sat rating.

[abstraktMedia]

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However, I can't help but get the feeling that HG is only concerned with getting new customers and not adding benefits for existing ones. 


I couldn't agree more on this one...I've been with HG for more than 3 years now and they surely are getting worse and worse...sorry guys that's juts the truth....like someon said...whena small company becomes big it developes big company attitude....and in HG's case it's true....