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Thread: Ethical Question about fees

  1. #1
    One day older, one day wiser rafiki55's Avatar
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    Ethical Question about fees

    Is it ethical...

    For example...would it be ethical to charge $15 a month to a client, when the hosting only costs $10 a month for me to sign up? If so, is it still ethical to not tell the client about cheaper hosting solutions? (i.e. those $25 a year for very basic hosting)

    Secondly....what if it was shared hosting. For example, I have a hosting account that I use for my personal hosting and it costs me $10 a month. Now what if I also host my client's website on the same hosting account (basically just host another domain on the same hosting account) and charge them $10 a month, is that ethical?

    I'm thinking that it would be reasonable for the second case, as it is like having a hosting reseller account and selling hosting to the client. Although I'm not 100% sure, so this is where you come in.

    Also is it ethical to not tell the client about cheaper hosting solutions to push my own reselling hosting?


    hmm...
    Thanks

  2. #2
    FK M.D. pheck's Avatar
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    all cases you mention are ethical in my book. if they wanted to, they could research the web and find a cheaper host and not use you. but they are using you for your expertise; they don't want to go out searching for cheaper hosts that they aren't even sure will provide them with the services and uptime that they need. it should cost a small amount. $5/month is not unreasonable for your expertise in my book. in effect, it is costing them $5/month to transfer their worries about whether their hosting will be functional and do what they want to you, who is now in charge of making sure this happens. you are essentially their personal tech support guy. why should this be free?

  3. #3
    I'm somebody too! Gooeysoft's Avatar
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    I agree 100% with Pheck!
    I don't have a signature

  4. #4
    tell me, is this sellable..... OddDog's Avatar
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    lol, i am due to have a meeting with the local cable internet and general isp company thins morning, to discuss this idea of reselling on a virtual server.

    will inform after the meeting but .. any service you provide to the client should be charged for.

    and peace of mind is also a service..

  5. #5
    Nyuk! Nyuk! Nyuk! Hey Moe... serpent star's Avatar
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    Re: Ethical Question about fees

    Originally posted by rafiki55
    Is it ethical...

    For example...would it be ethical to charge $15 a month to a client, when the hosting only costs $10 a month for me to sign up? If so, is it still ethical to not tell the client about cheaper hosting solutions? (i.e. those $25 a year for very basic hosting)

    Secondly....what if it was shared hosting. For example, I have a hosting account that I use for my personal hosting and it costs me $10 a month. Now what if I also host my client's website on the same hosting account (basically just host another domain on the same hosting account) and charge them $10 a month, is that ethical?

    I'm thinking that it would be reasonable for the second case, as it is like having a hosting reseller account and selling hosting to the client. Although I'm not 100% sure, so this is where you come in.

    Also is it ethical to not tell the client about cheaper hosting solutions to push my own reselling hosting?


    hmm...
    Thanks

    oh my!

    I don't know about the ethics of it, but I can tell you that if it wasn't an accepted practice, 100% of businesses I have worked for, encountered, done business with, thought about starting, etc. would not be in business today.

    When I go to the grocery store, I am never told by the owners of the store, that the store down the road has much better deals. I'm never told that taking that milk off the shelf would be a huge mistake when taking into consideration the cost of the milk vs cost of a cow, hay and grain to feed the cow, storages and milking of the beast and the fact that if I grow tired of the cow I can turn that investment in milk into t-bones... Factor that over the 30 year lifespan of the cow and that's one hell of a deal.

    The goal common goal on it's most basic level in business is to turn a profit. If you have to middleman it to get there, more power to ya.

  6. #6
    Harry Tuttle phantomflanflinger's Avatar
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    Marking up Web space and selling it on will piss off a client only if:

    1. you give yourself a large profit, which you have NOT done. What's $5?!

    2. They find out about it, which at some stage they will if you've charged considerably more than the going rate (see 1) - any client can search the Net for cheap hosting and then when they do, if you're charging double... But 5$ is neither here nor there.

    3. You lied to them and said you were hosting the site yourself / that the sites server resided in business premises owned by you / whatever.

    What pisses me off is when design companies's sites say "we''ll host your site" and what they actually do is buy up space and sell it on at large profit for doing no work.
    If the bastard server goes wrong and the client phones them, what do they do, pick up another phone with their other hand and whisper to the host?

    They won't begrudge you $5 a month. But don't become a middle man. because then you'd be a middle man. You know what they are like.
    We're all in it together

  7. #7
    Nyuk! Nyuk! Nyuk! Hey Moe... serpent star's Avatar
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    If the client wants the security and ease of going through one contact for all things online, they will pay a premium and I will play middleman. Ever heard of Manpower Inc.? Their whole business is rooted in being a middleman. These middlemen have one of the most profitable businesses in America. They simpley find potential employees for employers. That is their job, to middleman. You don't need to manufacture a product to run a legitimate and profitable business.

    My business is mostly operated on other companies claiming to offer a service and in reality, I'm offering the service to them. They use me for my skill, I use them for thier influence, brand, and level of trust bestowed upon them by thier clients. To shame the middleman, or the business partnership in which both parties profit monetarily is simply naive.

  8. #8
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    just my thoughts:

    Making a profit from a service that you aren't providing wouldn't be ethical/professional. So if you are really charging them extra because of the support role you will play during that time, then spell it out to the client - stating specifically what you will and won't do for that money. Personally, I would charge a flat fee for setting them up with hosting and then, on top of that, a monthly retainer to cover the support. I don't think the hosting fees should be included in that calculation.

    Regarding hosting their domain on your own hosting account, you need to read the hosting company's terms & conditions to see whether that's allowed. Generally, I think you would need a reseller account to provide that kind of service - but I could be wrong.

    - n.

  9. #9
    curmudgeon swampy's Avatar
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    yep it's called "reselling"

    the 7 11 doesn't make coca cola, they buy it from the manufacturer, add a little onto the price and resell it to the consumer.

    If you are unsure you could state that you would liase with the ISP in the event of problems.
    "They're very much like scruffy pigs to look at, and they've got big, knobbly warts and lumps all over their long, hairy faces. They are very, very ugly indeed..."

  10. #10
    Monkey Wrangler monsterfx's Avatar
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    Originally posted by enemem
    Making a profit from a service that you aren't providing wouldn't be ethical/professional.
    Just my experience from the time I spent in advertising... that happens all the time. Pretty much every 3rd party service (photography, extra freelance help, printing, etc) gets marked up from cost by at least a few percent. The idea is to help cover the administrative costs associated with 3rd parties.

    Of course, just because it happens in advertising doesn't make it ethical. But it does happen.

    -monster.

  11. #11
    Monkey Wrangler monsterfx's Avatar
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    Originally posted by enemem
    Making a profit from a service that you aren't providing wouldn't be ethical/professional.
    Just my experience from the time I spent in advertising... that happens all the time. Pretty much every 3rd party service (photography, extra freelance help, printing, etc) gets marked up from cost by at least a few percent. The idea is to help cover the administrative costs associated with 3rd parties.

    Of course, just because it happens in advertising doesn't make it ethical. But it does happen.

    -monster.
    Last edited by JabezStone; 02-12-2003 at 12:04 PM.

  12. #12
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    Sometimes we take for granted our own skill sets. We see things as very easy to do and do not see the value in them.

    There are many ways to approach hosting. But lets look at the reasons behind marking it up.

    The first question is what is your hourly rate required to live (if you are a freelancer)? Basically take all your monthly expenses, personal and business, include entertainment and food cost the divide by 160 hours (standard 40 hour work weeks, we wish). Now lets say this amounts to $20/hr that is not what you should charge the client per hour. Thats how much you need to live. So in order to actually make money you should triple that rate to $60/hr. This makes up for lack of clients one month and allows you to actually make a profit. Hopefully your skill set justifys this rate.

    Now how does this relate to hosting. Well if you spend 15 minutes a month dealing with your clients hosting then that is $12 worth of your time. Whether the 15 min is generating the invoice or configuring e-mails or whatever. This is why I personally choose to setup my client directly with their host billing wise and charge them hourly for any support/config/maintenance I do.

    Remember all we are selling is time and we have a limited supply of it.

  13. #13
    Nyuk! Nyuk! Nyuk! Hey Moe... serpent star's Avatar
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    Originally posted by dcullipher
    Sometimes we take for granted our own skill sets. We see things as very easy to do and do not see the value in them.

    There are many ways to approach hosting. But lets look at the reasons behind marking it up.

    The first question is what is your hourly rate required to live (if you are a freelancer)? Basically take all your monthly expenses, personal and business, include entertainment and food cost the divide by 160 hours (standard 40 hour work weeks, we wish). Now lets say this amounts to $20/hr that is not what you should charge the client per hour. Thats how much you need to live. So in order to actually make money you should triple that rate to $60/hr. This makes up for lack of clients one month and allows you to actually make a profit. Hopefully your skill set justifys this rate.

    Now how does this relate to hosting. Well if you spend 15 minutes a month dealing with your clients hosting then that is $12 worth of your time. Whether the 15 min is generating the invoice or configuring e-mails or whatever. This is why I personally choose to setup my client directly with their host billing wise and charge them hourly for any support/config/maintenance I do.

    Remember all we are selling is time and we have a limited supply of it.
    Good post.

  14. #14
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    Thanks!

    I try to help freelancers when I can.

    One more thought. The next time your client ask you to do something that you know you can do in 15 minutes ask yourself why you can do it in 15 minutes. How long did you have to experiment and learn to do things fast. Then factor that in before you do a bid.

    If we all start charging $50 for little development projects we will all be poor eventually.

  15. #15
    tell me, is this sellable..... OddDog's Avatar
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    for anyoone interested in my conversion with my local isp:

    they are charging me 29 euros (approx 29 USD) for 100 megs, 10 pop3, 2 dbs,ect.

    for an additional 6 euros for each domian name, we can share this space adn pops, bds, ect.

    so i will be charging 26 euros to all my clients. when i need more mail accounts, space or more dbs no problem. i buy extras seperately.

    unethical. no. i charge for my time adn expertise. the client is free to organise there own renting....

  16. #16
    One day older, one day wiser rafiki55's Avatar
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    Thank you everyone for their responses! It has given me a lot of insight.

    Odddog: Wow! you are paying a lot for hosting!

  17. #17
    tell me, is this sellable..... OddDog's Avatar
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    yes i am, but it is the local isp.

    there are political advantages ...

  18. #18
    An Inconvenient Serving Size hurricaneone's Avatar
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    Originally posted by OddDog
    yes i am, but it is the local isp.

    there are political advantages ...
    You are one savvy operator, OD.

    Stand by for emergency synapse rerouting

  19. #19
    tell me, is this sellable..... OddDog's Avatar
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    its just a few dollars more, and the advantages are very real adn tangible.

    like most places, there are few powerful groups of people, companies .. and the people behind this operator are like that.

    I suppose that were you are hurricane there are like 50 families that run the place ...

    same here, just less familes.
    Last edited by OddDog; 02-12-2003 at 01:16 PM.

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