Reseller hosting question

anotherpoolie

Hi All,
Not sure if this is the correct place to ask this question but I'm desperate so any help or advice would be greatly appreciated.

I run a small (1 man) business and have done so for 11 years. I provide domain names, Website hosting and e-mail to many customers throughout the UK. I do this through what is called a reseller account, without getting technical at this stage, basically I pay (or paid) £35 a month to a large hosting company for this reseller account. There are lots of providers out there but the one I use offers:

UNLIMITED Web Space
UNLIMITED Bandwidth
UNLIMITED Websites
UNLIMITED Domains

This means I can then sell multiple hosting accounts etc and add them to my reseller account. I actually run three reseller accounts with different companies and they all work in pretty much the same way. On the account in question I had about 1000 accounts - nothing out of the ordinary - however in December I was informed by the supplier companies support that they were increasing the monthly price from £35 to £360 per month - even though they are still advertising it for £35 to new customers. When I said they could not do this they replied with the following:

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The reason we have had to do this is because a number of our Reseller customers are costing us a lot more than we are getting from you – meaning we’re subsidising your business.

If we look at your specific details:

Revenue in the last 12 months: £758
Number of packages: 1048
Ticket numbers: 242

To deal with a ticket at ???????? costs us in the region of £5.50, so your 242 tickets have cost us £1300, yet you only bring in £748. If you had a customer like that I’m sure you would also do something about it.

Our options are:

1. Increase your payments.
2. Ask you to move elsewhere (a Hybrid or DS server would be an option)
3. You could reduce the size of your account.

Perhaps you could look at option 3? Do you need to put in so many support tickets – the idea is that you are meant to support your customers. Out of our 10,000+ Resellers you are in the top 0.1% for support tickets per package.

Many of the Resellers that we have had to increase prices to accept that this is still good value for money. However if you can demonstrate over the next few months that you've reduced your support load then we'll be happy to review your billing.

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quote

As I can genuinely not afford the increase in monthly cost I said I would go for option 3 - Over the next month I have reduced the account to 800 and had 1 single support request and told them I will reduce by another 200 over the next month - but they were still unwilling to listen. I replied with the following:


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Although I can understand your need to make a profit - I am not prepared to accept an increase in price. I was sold the reseller account on the basis of your advertising stating it held unlimited domains, hosting space etc etc - there was (and still is not) any reference in your literature to the amount of support tickets that can be raised. For yourselves to allow the account to build up and then inform me that the price is increasing by 10x is totally unacceptable - bordering on entrapment.

I do not see the price increases you mention as 'still value for money' - I see them as extortionate, when compared to other similar providers. As a Company we could not afford that sort of price rise and it would inevitably lead to the failure of the Company, for which we would hold yourselves responsible.

I can however easily reduce the size of the account and the amount of support requests raised - I could of done this previously if I had been aware of the issue. I have started to remove old accounts and will soon move a raft of hosted domains to another provider. If I Had guide lines to work to (ie. how many accounts/ how much space available for use etc) it would make it a lot easier.

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quote

They were completely unwilling to listen to anything - they went ahead with their '10x' a month price hike (£360 per month instead of the advertised reseller cost). I tried to resist, however they suspended my access to the reseller control panel and then the next day they suspended all of my clients accounts. You can imagine the knock-on effect this had - I had to pay the bill straight away to get the sites live again - took me a week to calm all the disgruntled customers with a 'fob off' excuse a to why their Websites and emails had stopped working

The top and bottom of it is that I can not afford to take their price rise, it is possibly going to cost me my business that I have worked at for over 10 years. The annoying thing is that it is almost like they waited until I had enough clients with them that it would be impossible for me to do anything - with the best will in the world it would take months to move everyone somewhere else - and even then I would lose some who would not be happy with the upheaval.

I am currently searching for any forums/groups etc, that have the same problem in the hope that they might have some info on how to approach this, or pointers to the right direction. So if anyone has any ideas please get in touch - on her or PM me.

Think I will also pull together a quick webpage with their advertised info and my situation etc - again open to ideas!!!!

Your help will be much appreciated - thanks in advance Poolie!

bris

Sorry m8 but as a B2B you need to read the companies T&C's, if it's in there that they can do this then they will, if not there will be a term that they can close your account with notice.
Either way you can't win, consumer rights is not for you, try the small business board.

TonyMMM

All depends on the details of the contract you have with the company - and possibly just as important which jurisdiction they operate in.....are they UK based ?

If not, taking any sort of legal action to enforce the contract (if it supports your case) may be prohibitively expensive.

anotherpoolie

Thanks for replies. To answer a couple of questions, yes they are UK based and I have been right through their advertising literature and there T+C's and I can not find anything that allows then to do this. I've been digging around though and this apppears to be happening to quite a lot of other resellers also.

Whats the score with adding the link on here to the services they advertise - will I get blocked?

UsernameAlreadyExists

No different to posting the URL for BT, or Sky, or Admiral etc IMHO
It's not like you're advertising them, you're in dispute.

keyser666

I find it remarkable you could have 1000 accounts from a hosting provider for £35 a month all in. You must be making a amazing profit from reselling these and I think you have had it good for as long as you have had.

As for the support tickets open initially I think that is ludicrous too. The onus is on you to resolve their issues via WHM\cPanel. I don't know what type of support calls you logged but I cannot see anyone needed that amount.

I am not having a go but I truly dont think you see the cost you are costing them and if their was a FUP then I think you have deffo gone over that.

What are you charging each customer for their reseller account/web space, register a domain and bandwidth? If you are passing on the unlimited like you have no doubt you are charging them well for it.

A basic shared hosting account would cost about £1.99, with 500MB Space, 5GB bandwidth per month. I cant see how that rise of £360 per month would put you under. I can see it hitting your profits though.

nitra

You've hit up against the reason why you should never go with "UNLIMITED" offers for hosting (be it shared or reseller)...

There is and always will be a limit and if you exceed it they will cut you off or ask you to pay more, as you've been in the business for ten years you should of known better.

lucy03

To be honest, that does sound like a lot of support tickets for the price paid. Many companies will review their customers and remove the ones which aren't cost effective, and your only hope really is that the terms and conditions work in your favour, which I would guess (without seeing them) they probably won't.

I can think of one of the largest accountancy companies in the country that does this, the middle market clients they don't think are going anywhere suddenly start getting much higher quotes. It's potentially expensive for companies to switch accountants, but once they're not profitable enough, there's not much that can be done.

InsideInsurance

As long as they give you the notice outlined in the T&Cs/ Contract then they can vary prices and suspend/ cancel accounts.

Anyone offering "unlimited" bandwidth/ space etc is clearly going to be a budget provider as there isnt truly such thing as unlimited and it is based on assumptions of what each person will actually use. If you want to provider a higher quality proposition to your clients you would look at a more professional host for your reseller accounts or alternatively accept you are bottom of the market, you'll make large margins but will need to relocate periodically when hosts think you exceed their fair use policies

Ectophile

anotherpoolie wrote: »

Thanks for replies. To answer a couple of questions, yes they are UK based and I have been right through their advertising literature and there T+C's and I can not find anything that allows then to do this. I've been digging around though and this apppears to be happening to quite a lot of other resellers also.

Whats the score with adding the link on here to the services they advertise - will I get blocked?

The chances are that there's something in their T&C's that gives them a loophole to get out of the contract. Without having a chance to read them, none of us here really know what you signed up for.

paddyrg

There may be an acceptable use policy - if you're in the top-10 ticket-openers paying just £35/month, frankly I'd also be inclined to see your usage as being disproportionate to the value of your business.

I suspect the £360 is really them just trying to get rid of you - more trouble than you're worth if you cost them money and cause them work. Find another host, find some other all-you-can-eat provider to subsidise your hosting ;-)