Hosts that only offer yearly hosting depend on new customer sign-ups for their cash flow. As long as they are consistently getting new customers they shouldn't have any cash flow problems.

I don't think signing up yearly is necessarily a bad idea. It can often save the customer some real money. However, I would look at their TOS to see that if the customer were not happy and decided to cut their losses and leave, do they offer a prorated refund. If not, I wouldn't sign up for a yearly account, but I think any hosting business that is willing to back up their service with cold hard cash, would offer a prorated refund to those customers.

Another reason for a host to offer an annual or even lifetime payment is to cut down on transaction fees of a few percent on every charge. The percentages are relatively high for small amounts.

For this reason, we offer clients the choice of monthly flexibility or annual savings.

This is a common practice by Hosting companies now a days.
however there are some hosting companies that offer hosting solutions at monthly payments too.
I generally think that hosting companies that offer monthly payment opportunities are more sure and concrete about their services.
They generally provide better support as well.

One time hosting scares me and its not something we offer, if we need to we might consider it but as a client I would never want it. I would rather have more choices to fit me, not the company - thats not my job as a client.

Some companies sell their most basic plans on annual pricing. This is usually done to encourage the person to buy a more expensive product. Other companies do it to make a quick buck. It just depends.

Has anyone here done a lifetime hosting? Can you share your experiences with us. I have seen on ebay and other auction websites lifetime hosting and people are buying it. I wonder how popular lifetime hosting is in this market.

well . yearly payment is just a quicker way to raise funds as well as to lock a customer in . they will offer promotional pricing for those who are willing to commit to the company for a long period of time .

on the other hand, lifetime hosting is not possible as there will be recurring operational costs for any hosting company and a one time will not be able to cover such costs.

I agree, at the same time these lifetime plans only mean you get hosting as long as the company stays in business. It also mean if you violate there TOS they can terminate your account without refund . Make sure you read there TOS before purchasing anything.

They use it to get more money fast to use it on advertising and other things.

This is true. Asmallorange is a repeatable company to say the least, and hosted a few websites for a friend of mine a few years back. He to this day is still on his "lifetime package" and asmallorange continues to support him and honor him as if he was still a paying customer.

in short, you can say it is easier to management, better ROI,and client no need to handle alot of BILLING stuff.

I also agree that buying life time hosting is nothing but taking a huge risk. Even extremely fit companies can get sold to someone else and turn into something terrible in a single day, we've seen such examples in years.

Annual hosting is something we do as well. As we sell affordable hosting plans, smaller plans are inexpensive enough to be sold annually. As the plans get bigger, we shorten the contract periods but to tell the truth, most customers still choose to save money and pay annually even for the biggest hosting plans.

Although we do NOT force annual payments, there are definitely several benefits for the hosting company when the client does pay in advance.

I know that most shared/reseller plans are priced with the assumption that the client will stay for a period of time. It can take months to return a profit on a single customer, so if they pay ahead of time, then it guarantees that they are not a loss from the start.

Also, as others have said, there is much less hassle for both the host and the client in regards to billing for an annual plan. Its much easier to collect once every 12 months rather than every 30 days.

But, as a client you must be sure that you are not paying annually to a 12 year old who is running a hosting company out of his basement, who will close up shop 3 weeks later

Ok now this above all things makes the most sense to me. Thank you for that reply. The idea that it is a way of forcing their upselling, well its a simply technique that really has little in the way of draw backs.