Reseller hosting is an agreement between the client and the host. The client purchases the host’s services at a wholesale price then resells the bandwidth and server space to customers. There are two methods of doing this. First, the reseller rents a dedicated server from the host and sells the space and bandwidth or they may resell the shared server space.
Advantages of Reseller Hosting
- The reseller doesn’t need to have extensive technical knowledge of web hosting. This is a very profitable market, so a smart business sense may be enough.
- The reseller doesn’t have to maintain the servers. All downtime issues, upgrades, recovery centers, hardware and general infrastructure are preserved by the hosting company.
- Many resellers have been known to work from home in their pajamas and never personally meet your clients.
Drawbacks of Reseller hosting
- Extensive advertising costs. It’s difficult to go head-to-head against large web hosting providers when it’s simply a reseller service. A large budget in advertising is a must for any reseller to be profitable.
- Responsibility. If you are selling hosting packages, you will need to be able to provide support for your new customers. Reseller plans do not typically include customer support for your clients, only for you. If you don’t have the time or resources to devote to providing necessary support, technical and customer service.
Who can be a Reseller?
The typical web hosting resellers are web developers, system integrators, and web design firms. They tend to offer the hosting services as an add-on to their already established business. As it’s an inexpensive way to start a business with little overhead, entrepreneurs are also attracted to reseller hosting.
Most hosting companies allow reselling to occur. Many resellers are actually permitted to customize their hosting plans as well as pricing arrangement. This allows resellers to create branding of their services based on the unique plans that are established. All actions can be monitored via the web in a control panel.
Another form of hosting is more on the affiliate level. The reseller acts as an agent for the hosting company by advertising the hosting services. Customers purchase the service directly from the host, but the reseller makes a small commission for their advertising efforts.
An additional form is where the reseller acts as a marketer for the hosting company. Customers purchase the service from the reseller, but only deal with the hosting company thereafter. The reseller acts as a middle man only selling the service, but not dealing with any follow-ups, technical issues or complaints.
The final type occurs when the reseller purchases a large chunk of bandwidth and storage space, then breaks it up into smaller portions and sells it to consumers. Customers contact the reseller for any issues.
There are many different types of resellers within the web hosting industry. Since this industry generates tremendous profits, resellers get a small piece of that without having to invest much upfront capital. This is a great way to start a business and also obtain inexpensive web hosting.