Price Calculation

hi guys,

Just wonder what is the formula to sell our products vs the link price we take from the telcos?

Lets say Jerry sold:

SOHO - $99/Month
Business 5000 - $399.00/Month

Must be some kind of “standard” profit isnt it?

or… doesnt matter how much we buy the pipe from telcos, what we sell is: a little bit lower from the competitor price?


or... doesnt matter how much we buy the pipe from telcos, what we sell is: a little bit lower from the competitor price?

Why less? If your service and support are superior, why not more? Why do WISPs think that they have an inferior product that they have to sell for less?

Selling to businesses is easier than your think, you just need to hit the hot buttons;
- No overseas calls for support
- No escalation path (they get an engineer when they call)
- Local techs with better control over solving the problem
- Monitoring
- Faster uplink speeds
- Savings over the existing T1/Fractional T1 they have
- Better reliability than the DSL they have
the list is long.

What we pay for access has no relevance to what the product is sold for. The product is priced to compete in a certain space. If the price is too low it's undervalued. Priced too high and you cannot get enough customers.

We priced this way:
SOHO @ 99.00 - competes with Business DSL
BUSINESS 2000 @ 179.00 - competes against fractional T1
BUSINESS 3000 @ 249.00 - competes against T1 (double the download for 1/2 the cost)
BUSINESS 5000 @ 399.00 - competes against double T1 (nearly 2X the bandwidth at less than 1/2 the cost)

When compared to what's out there we are an incredible value.

Our philosophy is simple "Raise the level of performance of the company and the prices follow".

I price at market and win by service…

Jerry is correct, selling to business is easy, residential is hard…

residential is price sensitive, business is service sensistive… saving$50 a month means nothing to them

but, in my oppinion sell to home user is better, they have more loyalty than the business customer.

Lets say if your service is down, than the business customer will push you to fix the problem asap, no matter what you told them, like: the upstream provider is down, upgrade, etc. Business customer dont like the words of “down time” because they pay more…

But for the homeuser, if you said " sorry, the problems is coming from our upsteram provider" than they will understand and WAIT. Home user plans is cheaper, so our responsibility to home user is small too?

Dont you think so?

Sure it’s EASIER to do residential, but how is making an ARPU of 40.00 per month or less BETTER than an ARPU of 125.00 a month or more?

We dealt with everything you listed so that we could sell to businesses.

- Lost the T1, moved to Tier 1 colo with redundant AC, Power, and fiber.
- Upgraded to Advantage AP’s
- Hardened the equipment on the tower
- Do maintainence at night/sunday only
- Towers on Generator backup
- High quality network equipment
- NO Prism, BAM, or other edge device
- 12x7x265 monitoring of all nodes
- We can fix any problem that may come up in a day
- Rediculously fast response times

Yes residential customers are more tolerant of a network that is unreliable. Business customers are more loyal - unless there is a problem they will rarely switch for price, they want consistency and excellence in customer support. Residential customers will grind you for $4 a month AND demand excellence in customer support.

By the way, we have NEVER lost a customer for any reason other than moving out of our coverage and they ALWAYS ask if we can service them at the new location.

Yeah, I’m bragging

how about proxy / cache? did you guys use it?
it will save around 40% ++ bandwidth, i believe