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  Post #22 (permalink)   02-21-2011, 01:52 PM
Frank Hagan
HD Newbie
 
Join Date: Feb 2011
Posts: 15

Status: Frank Hagan is offline
Try to establish what gross margin you want to aim for, and then price your offerings accordingly. You can take your basic costs of web space per 100M and bandwidth per GB, for instance, and calculate what the selling price would be for accounts at a 50, 75 or 85% gross margin.

If you are into any kind of niche at all, an 85% GM (or more) is not out of the question. There are other costs that have to be considered, and net profit will be quite a bit lower.

I'm often amazed at how many people how no idea how much margin they have, setting their prices just by a comparison of competition.
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