How do $1 hostings make money?

[natural]

I host one of my website naturalgasprice.org (http://www.naturalgasprice.org/) on dollar hosting - I pay $1 per month ($12 per year). It's my first site hosted on such cheap hosting. I don't understand one thing: how do $1 hostings make money? I mean, they get only $12 per year from me. This price include:

$12 / year
- Paypal fee (3% + $0.34)
- Affiliate in case of referral (25%)
- Tax
- Server costs (hardware + electricity)
- Human labor costs
- ...
--------------
? profit ?

Where is the profit? How do $1 hostings make money?

[HostingRaid]

They make up for the low cost by having a lot of accounts. And putting as many accounts on each server as possible.

I am not sure how they make ends meat. After paypal fees you have .67 cents.
Lets say their server costs $200 month, they would need almost 300 accounts to break even. That's a lot of accounts.

When I see $1 hosting I think of a company running on budget servers and hardware.

As long as your site loads fast and has no downtime that's what matters.

However you get what you pay for.

[dadiehost]

Nowadays servers are very cheap, with one dollar still you can make money.

[Nooru Nizu]

I dont think think its because of cheapness . Even If it cost only $1 per month , Just check their renewal price its quite high . Such companies generally back on their customers to renew their plans . one such Host is iPage . You can see that ipage is a word class company that provide Hosting for just $1/mo during a particular time of a month ( otherwise it cost us $1.89/mo) , where as its renewal cost us $112 per year . Just check the difference . You can Know more about iPage and such Web Host at http://inlinehostblogger.com/ipage-reviews/

[Ahmad]

I think that is very very interesting question and I think that is possible to provide (can afford that) only for big and trusted companies. Like kvchosting.com for example.
When small and new company ties to start providing that - it would not be really possible.

[paullopez]

I host one of my website naturalgasprice.org (http://www.naturalgasprice.org/) on dollar hosting - I pay $1 per month ($12 per year). It's my first site hosted on such cheap hosting. I don't understand one thing: how do $1 hostings make money? I mean, they get only $12 per year from me. This price include:

$12 / year
- Paypal fee (3% + $0.34)
- Affiliate in case of referral (25%)
- Tax
- Server costs (hardware + electricity)
- Human labor costs
- ...
--------------
? profit ?

Where is the profit? How do $1 hostings make money?

Web hosting companies hosts hundreds of websites on their shared servers. Once the shared server configured, hosting company start offering different kind of shared hosting packages on the same node.

It seems like you are basically using the very basic plan of shared hosting. I am sure your web hosting service provider offering other shared plans as well with different price tag.

For example: if 300 websites hosted on the basic plan of $12 per year

300 x $12 = $3600 annual income

If we assume $600 went for PayPal Fees + Affiliate Commissions, still there is a $3000 profit through very basic shared hosting plan. Now guess how many customers the hosting company has on other shared plans.

FYI, hosting companies always calculate ROI before launching any hosting package.

[shoponics]

I think that is very very interesting question and I think that is possible to provide (can afford that) only for big and trusted companies. Like kvchosting.com for example.
When small and new company ties to start providing that - it would not be really possible.