Cheap Hosting Is More Expensive Than You Think…

A common misconception a lot of people have (especially when starting out), is that all hosting is created equally, and the cheaper, the better (we all love cheap!). It’s unfortunate that the majority of people who recommend hosting companies, do so without actually testing them, and are, realistically, unqualified (or at least lack proper methodology) to test them in the first place.

In this post I’m gonna break down, with painfully simple examples, why cheap hosting is super expensive.

So why is cheap hosting expensive? Elementary my dear Watson. It’s just maths! Let’s go over it, piece by piece…


Patience is a long lost virtue

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…


Every visitor is more valuable than you think

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

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

If you’re not running paid traffic yet, this might seem unrealistic – surely a targeted visitor isn’t worth that much, right?

Well, they are… so whenever you lose a visitor due to slow pages, you’re losing $1 or so in lost traffic.


Shared hosting is slow

Shared hosting is a numbers game.. just think about it, $5/month for unlimited x, y, & z. There’s gotta 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 Hostgator for $5? I know this is a silly example, but why would any company spend more than they need to on hosting if it really was unlimited?

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

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


Cheap hosting fails just when you need it most

Now here’s something you won’t see advertised – most ‘unlimited’ shared hosting accounts will be simply shut down if your site actually generates a lot of traffic.

So.. when you finally get a big break, and your site is featured on a popular site/TV program/podcast.. That’s when your site will be shut down by your host.

Yes, they really do shut you down right when you start getting traction…


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 a higher quality hosting account (like a VPS).

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.

Not so cheap now, right?


So what should you use?

For most people there are 2 reasonable options – managed WP (eg. WPEngine) or a VPS.

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 over use 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 from your site! (In other words, it’s almost always more than enough to host A LOT of sites, as long as you don’t try and upload your movie collection).



Unless you’re running a site just as a hobby and aren’t really concerned about every making money from it, you’re better off steering clear of cheap shared hosting. It’ll cost you a lot more in the long run compared to paying a little more for a service which you can really depend on.

In a future post, I’ll sign up for a few popular cheap hosting accounts and demonstrate just how bad they are 🙂

Any questions, drop me a line in the comments 🙂


Hey, I’m Michael Thomas. I’ve started a bunch of successful software brands, and I’m not focused on bigger, more bad-ass software platforms. I help people get their start in online business while sharing from my own experience (both successful and failures).