Hi Andrew,
There are lots of customers who do not shop on price alone. The other thing to consider is that unlimited, is not really unlimited, and many people who have been hosting for a long time know this. Take a look at Terms of Service if you want to see an example of what most hosts restrict on their unlimited plans.
From a host's standpoint, in order to get yourself into the unlimited game, you need to have a dedicated server or possibly even a VPS/VDS so that you can allocate more space than your hard disks physically have. And then in doing so you are opening up an administrative can of worms because you need to either police your own customer's sites, or write scripts to do the policing for you. Here we do a combination of both to keep accounts from abusing the server.
When you offer unlimited, people like to think they can just go ahead and upload their entire movie and MP3 collection to the server for $6 a month. Clearly you won't be making money as a host when this happens. If you want to offer unlimited it helps if you have a few guys to help you manage the server since it requires more work than a traditional hosting package, and it helps if you know how to write some scripts on your own as well. It definately is not all it is cracked up to be and the only reason GlowHost offers it (we were one of the last hosts to convert to the dark side) was to retain our current customers from jumping ship to other hosts who were offering unlimited.
The term is a bit misleading in my opinion, but since that is how the industry has coined the name, that is what we have to call it as well.
You can still sell "unlimited" the same way that GlowHost and many others do it. Just set some predefined packages like "Tier1" "Tier2" and etc.
Then each time your customer hits the disk space limit, they will request an upgrade to the second tier. Before you upgrade them, you look through their account and see if they are violating the terms of service in any way, which they almost always are, and then invite them to pay for a more realistic hosting package.
You should also consider looking into getting local friends and businesses using your hosting service. You can usually get local customers to pay the entire price of your reseller account and have plenty of space left over to resell. That's how many of the larger web hosts today got started and the same way we got our first dedicated server 10 years ago.


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