This is a short guide for WordPress web designers, developers, and small digital agencies. All too often your clients are on shared hosting, which seriously impacts their paidspeed loading times. As we discussed in this blog a lot, page speed is extremely important because it directly correlates to conversion rate, revenue generated by the website, and SEO placement.
Moving your web hosting clients to premium servers, will not only benefit their website in multiple ways, but can also lead to another stream of recurring revenue for you. In this blog we're going to discuss how we host our small client websites, what the process behind this is, and how we fully monetize it.
If you are a small designer, developer, freelancer, or digital agency, you typically have two options when it comes to hosting client websites. One, you purchase shared hosting for them and run the website through that. Or two, you have a reseller's account and do it that way. Both of these options offer terrible end products to your clients, and your returns aren't that high.
If you want to skip this section, it boils down to you get what you pay for and none of the options mentioned in this section are viable for long-term, high-performing websites. Click here to skip to the section where we discussed monetizing Enterprise level web hosting for even the smallest websites.
We consult with designers and digital agencies, and a big issue we see nowadays is that clients will run their website through tools like “Google PageSpeed” or GTMetrix and see abysmal scores of 60 out of a hundred. They will then come back to the designer and demand that their website becomes better performing.
Even if you have the most optimized website in the world, if it's a large website, it will not load fast on shared reseller hosting, or normal shared hosting. This is because the server simply doesn't offer enough resources to enable fast loading. I will guarantee that you will not be able to achieve a high performance score, on shared hosting, even if you implement every single method that we outlined in our book “How To Boost Your WordPress Website's PageSpeed Score”.
If you move a step up in the hosting world, you'll typically run across VPS hosting providers trying to sell you on their service. Basically, it allows you to purchase access to one server with a set amount of resources. You can then install as many clients sites as you can fit on it and run it that way. That's another issue, because you basically become your own shared hosting provider. You’ve got multiple websites sharing resources, which will inevitably lead to low performing, slow loading websites.
Let's take a look at this graphic which sustincly illustrates the drawbacks of these three methods that were discussed:
The old model has many drawbacks, for any option that you may choose. Shared hosting means that you have no control over the resources allocated to you, and your website will be slow. VPS hosting means you have a limited amount of resources, and doesn't allow you to scale your business. For example, say customer website decided to grow exponentially. On VPS hosting they would take up all the resources, leading to all your client websites running super slowly ( in the best-case scenario).
Our agency used to do reselling hosting until we discovered this new service and began using it. First, the gold standard of hosting is cloud hosting. There are numerous benefits when compared to any other style of Hosting. The first major one is unlimited scale. No matter how fast your website grows, you can never outgrow the shear server power of a company like Amazon or Google. Obviously, you'll need to pay for more, but hosting is a necessary cost.
Cloud hosting's benefits are impressive and long ranging. Search Google if you want to see exhaustive lists, but the three most important benefits to you are as follows:
The main drawback is that it's not managed. That means no security sweeps, no automatic WordPress updates, no nothing. You'll also need to do some heavy configuration to get the server set up to run WordPress, a dynamic PHP application. Till recently, these two issues were enough to keep most away from this.
When we discovered Cloudways a year ago, we were thrilled. Cloudways offers managed WordPress hosting through five major Cloud providers. Basically their platform sits on top of your chosen cloud provider and allows you to manage your WordPress installation, server, and more. Because it is a fully managed service, WordPress is always updated, they do security sweeps, they offer super high-quality live support, and a really simple interface that you can use to create new servers and scale existing ones.
They also offer features specifically for agencies, like team management and project taggings. This means that you can track every single website that you may be hosting, whether it's 10 or 500 installations. The team management allows us to delegate different roles to different individuals in our agency. For example one may manage billing, while the other may manage support. And though we don't do this, you can use the team management to offer client’s access to the web hosting platform.
Creating a new server / WordPress installation on one of the top 5 Cloud providers is dead simple:
They offer Live billing estimates for a 3% error rate. For example, on this test account, our bill at the end of the month will be roughly $17.
If you want to get experimental, the platform also offers an API. This allows you to automatically partition new servers and WordPress installation. We're working on incorporating the listen to a new onboarding platform for agencies, that will be using for ourselves and then releasing to others later down the road.
When we migrated to this platform, we were offered free migrations for all of our clients. They also offer automatic tools that you can install on existing WordPress installations to push them to the new server. If we had one word to describe this product, it's simple. It makes something really complicated, like installing a PHP application onto your own un managed cloud provides something you can do in 3 clicks.
The websites we build typically fall into two categories: not resource intensive, and resource intensive.
For the non resource-intensive websites, we basically set up our own shared server. We put multiple websites on that server, as they don't receive a lot of traffic, or don't require a lot of computing power to run. This allows us to keep costs down, while still being able to host our websites with complete control.
As this is on a self-healing cloud network, if one of the websites in this server suddenly increases in popularity and sees a spike in its traffic, the cloud network will be able to handle this until we're able to move the website to its own server.
Websites that are hosted on their own servers are classified as high resource-intensive sites. Typically these include those that need a higher allocation of Ram, or more storage. Examples would be e-commerce websites, large photography galleries, high-traffic blogs and more.
For each of these websites, we create a new server and scale it to its needs. For example, an e-commerce website would typically get 4 gigabytes of RAM. That's a base price of $44 a month.
A photography website is much less resource-intensive. This means we can host them on a $10 a month plan, which only afford one gigabyte of ram, but offers 25 gigabytes of storage. If the website outgrows that plan, we can simply scale the server by entering our desired parameters.
The two setups:
|Resource Intensive||Not Resource Intensive|
DigitalOcean, start at 2gb ram, scale as needed.
Monthly cost: $22/month+
|2-10 sites per server.|
DigitalOcean, start at 2gb ram, scale as needed.
Allocate about 2.5gb storage, 512mb ram for each site at an absolute minimum.
Monthly cost: typically $80/month (this allows for 16ish sites)
If you host more sites, you can scale as high as this plan (all in one server, you can do as many servers as you need).
|DO192GB||192GB Ram||32 Core||3840GB||12TB||$1,035/mon|
Say you allocate half a gigabyte of ram to every site you host. That means you can host at maximum 384 websites on that server for $1,035/month. You breakeven charge per site is $2.70/month.
Now let us talk about the profit side of this setup.
Resource-intensive websites are much lower margin, but you can still bring a profit from them. For example, we typically charge e-commerce website $60 a month for hosting. This includes unlimited bandwidth, 4GB of RAM, and a hundred gigabytes of storage. For us, through Cloudways, this costs $44/month. That means we’re making a profit of about $16/month and our net profit margin is 26.67%. Our clients are willing to pay this, as we completely manage the hosting side of things, and they don't need to worry about anything.
If we wanted, we could run it directly through DigitalOcean, which would increase our profit margin by almost 50%. We tried this once, and found it to take a lot more time away from us, as we had to spend hours debugging, running security and manually updating things. For the time it saves us, Cloudways is definitely worth it.
Non resource intensive sites are higher margin. We typically charge anywhere from $10-$14 per website per month. Hypothetically, if we were hosting 384 websites and had our break even of $2.70/month, our net profit margin would be 73.00% on the low side and 80.10% on the high side.
The good aspect about this is that you have complete control over the hosting. If one of your client websites decides to become popular and require more resources, you can effectively move/scale it and make sure that its performance doesn't drop.
This is the best of both worlds because your clients have managed websites on high performance, enterprise-level hosting, and you're getting paid to do this. If you are a small digital agency freelancer or developer who is running into the issue of low performing websites on shared hosting, or reseller hosting, I strongly suggest you take a look at this service. Use the coupon code “ISOTROPIC” for 30% off your first billing cycle, and also make use of the three-day completely free trial, where you can get a feel for the platform before purchasing.
We shot this article to some smaller agencies and designers that we consult with, and a big question was “how do you bill”?
Typically, we bill by setting up a recurring invoice in our CRM. Every month our client is billed $60, and every month we pay Cloudways $44. It's as simple as that. We are looking into solutions that will make this process simpler and easier for both parties though. For example, we've been experimenting with a platform called AppBind.
They're a startup themselves, but their product is super advanced and works pretty well in what we've used it for so far (a couple hosting applications, but more for Google Ads). Support was awesome (we live chatted with the founder of the company to solve our issues). Go check them out as they don't cost you anything upfront.