Web hosting companies are increasingly outsourcing their services since it helps them reach more people without having to spend more on sales and marketing. In reseller hosting, a reseller purchases a hosting plan from a hosting company, and then sells it off independently. The reseller then makes a profit either from the discount offered by the hosting company or from a commission earned from the sale.
For instance, the reseller buys a plan valued at $200 for $180. This means that the reseller will earn a profit if $20 for every hosting plan sold. The reseller could also make money from commissions paid by the hosting company. This occurs when the reseller refers prospective clients to the company. Once the client signs up for a plan, the reseller then earns a recurring commission as long as the client continues using the services.
What can you sell?
As a reseller, you have the liberty of choosing what type of services to sell. You could offer dedicated, co-location or shared web hosting, or even store fronts and merchant accounts. If you decide to offer hosting services, then you could also consider offering related services such as domain name registration.
Resources and costs
There are several factors which determine the resources and costs involved in becoming a reseller. If you plan to simply make money by referring prospective clients to the company, then it won’t cost you much. All you need is a computer and a reliable internet connection.
For a small startup, you will need to pay upfront for a good reseller package. You will then need to have a reliable computer with internet connection which will enable you to manage customers’ accounts.
If you are a beginner in the business of reselling and web hosting, then you need to start small. As you get more customers and your business grows, you can then start offering more services. However, if you have the experience and the resources, then you can go to the extent of buying server equipment. You could also consider the cheaper option of leasing a server. Keep in mind that running your own server means that you will be responsible for all costs of maintenance.
Reselling web hosting has several advantages. First, you don’t need to invest a lot of money upfront. In addition, you don’t require much technical know-how. The hosting company usually handles software and hardware maintenance. All that you need is good internet and account management skills. A little marketing experience would also be useful for interacting effectively with your customers.
Since all technical support is handled by the parent company, you may experience delays in receiving support. This means that your customers also get affected. At times, when customers find out that you are not the real hosting company, they leave immediately.
How to market yourself
When starting out, you could advertise your services on online message boards. Many prospective customers with small hosting needs usually visit such message boards. You could also run contests to create interest and awareness of your services. Other helpful tactics include text links, online ad campaigns and email signatures.