Why “Cheap” Hosting Is Really Expensive

That subject seems a bit contradictory, no?

Let me explain…

Over the years I’ve tested a whole heap of different hosting companies. So far, I’m yet to see a shared hosting company that I’d recommend to anyone. They’re just too expensive compared to other options… and the true cost is somewhat hidden…

So why is cheap hosting expensive?

Elementary, my dear Watson. It’s just maths!

Let’s go over it, piece by piece…

Visitors are impatient

You already know this… it’s funny really.

I remember years ago being happy to wait a couple of minutes for a big page to load on my dial up modem.

These days, if a page hasn’t loaded in a few seconds, I’m crawling up the wall…and it’s not just me…

A recent study conducted by Kissmetrics found that, for most websites:

– Almost 50% of visitors expect a page to load in less than 2 seconds
– A 1 second delay decreases customer satisfaction by about 16%
– A 1 second delay can reduce conversions by 7%

Remember that last point, it’ll be useful later…

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Visitors are super valuable

How much are your visitors worth? Let’s talk raw numbers…

In most niches, acquiring a targeted visitor costs around $ 1 or more (think Google, Bing, Facebook, Solo ads…).

If you’re not into paid traffic yet, this might seem nuts. It’s not… it’s really not… 🙂

So, effectively, whenever you lose a visitor due to slow pages, you’re losing $ 1 or so…

Remember that bit too 🙂

Shared hosting is slow…

Shared hosting is a numbers game… think about it, $ 5/month for unlimited x, y, & z. There’s got to be a catch right?

Yea, there is… think about it… why would someone like Facebook spend hundreds of millions on servers, if they could just use one for $ 5?

Most people evaluate hosting performance on how it “feels”, rather than testing it using a proper method, with real tools.

I’m yet to see a cheap shared hosting account that’s worth looking at. They all perform dismally when put under the microscope.

So much does shared hosting really cost?

We need to make a couple of assumptions for this… so, let’s say your site gets just 500 visitors per month. And let’s assume the hosting plan is costing you $ 7 per month.

Let’s also assume your shared hosting account is 1 second slower (on average) compared to… well… most other hosting plans around.

7% of 500 is 35 visitors lost
35 x $ 1 is $ 35 traffic value lost
$ 35 + $ 7 is $ 42, which is how much you’re really paying for your cheap hosting…

So what should you use?

For most people… are 2 options really – managed WP (eg. WPEngine) or a VPS (Virtual Private Server).

Personally I think managed WP services are a bit overpriced – you’re often allocated a rather small amount of bandwidth and will end up paying overuse charges. They can be a good fit if you’re after an almost hands-off experience (and are willing to pay for it).

Which brings us to… VPSs. If you’re not familiar, VPS stands for “Virtual Private Server”. Essentially you get a virtual slice of a large server (cake?) that you can use as you please. Resource allocations are fairly generous with most suppliers.

When you get a VPS, keep in mind that you’re able to host as many domains, subdomains, mail accounts, etc… as you like – your main limitation is either bandwidth or disk… and, realistically… by the time that becomes a problem, you’ll be living by the beach laughing at the pittance you pay compared to the income you get! (In other words, it’s almost more than enough to host A LOT of sites, as long as you don’t try and upload your movie collection).

Where should you get one from?

Tricky question… The service I use is unmanaged (which means I need to manage my servers myself). I can’t really recommend them unless you’re a bit of a geek; know your way around Linux, etc…! I used to offer a course that trained people in the basics, unfortunately it became a little too expensive for me to maintain it (the support part that is).

A good friend uses Rose Hosting (no affiliation) and so far he’s been impressed with the performance of their kit.

Otherwise… just about any reputable managed VPS provider is going to outperform some shonky shared hosting setup.

Avoid really cheap services that seem too good to be true – there are a fair few guys running a few standard desktop computers out of their garage for their “hosting” company.

I’d recommend making sure you’re getting a VPS with SSD (solid state disk) as well, it’ll help a lot with keeping sites scalable and fast.

Also, remember that some of the prices out there don’t include cPanel (the user-friendly domain, hosting and server management platform, which is charged for on top… so make sure you’re comparing apples with apples!

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