Becoming a web hosting reseller can be a profitable way to earn residual income. Owning a hosting business allows you to set up, manage, and operate the back-end of websites, emails and domain management for your company and others as well. There are many options for doing this which we will examine in this article. We will also look at pros and cons of the industry to see if becoming a reseller is the right choice for you.
Reseller Hosting Options
Colocation Servers: If you own your own server and are familiar with the ins and outs of server management, you may choose to store and run your machine from a datacenter. This allows you to store your machine in a secure place with more bandwidth, fire protection, backup generators and security than a normal office building. You can also set up your own hardware and software for your business.
Dedicated Servers: A dedicated server allows you to use all of the resources of a single server machine. The equipment is owned and operated by the company that owns the datacenter where the server is located but use of the machine is exclusively yours. By getting a managed dedicated server, all of the maintenance and troubleshooting of the machine are the responsibility of the datacenter.
VPS Hosting: Virtual Private Server Hosting is a virtual “slice” of a much larger main server node. The main server node is often a very powerful dedicated server which is divided up into a number of different virtual environments. While it is possible to become a reseller on a VPS plan, these accounts are typically meant for development purposes only because resources are somewhat limited when compared to other forms of hosting. Regardless of this fact, many have come to view VPS hosting as a great transition from reseller hosting to a dedicated server. This is good to have while your company grows and expands.
Reseller Hosting: This form of hosting is often the least expensive and easiest way to begin a hosting business. By using one control panel, you can manage multiple clients who will also have access to a control panel to make changes and updates to their service. Many clients may not have knowledge or a background in this area and will be completely dependent on you for setup and changes to their service. This allows you, the reseller, to charge a bit more for this hands-on service. Shared hosting is usually located on a server which you will share with other hosting companies and individuals.
How to Start Your Reseller Business
1) If you are unfamiliar with the world of web hosting, email management and domain services, we suggest you take the time to research and understand the full scope of what you will be undertaking. Many web designers and coders find that transitioning to also being a reseller allows full control of a client’s web presence and management.
2) Reselling is much like any other business in that it requires hard work, effort and some start-up capital. Like any business, you will need:
- A powerful, reliable computer for running your business. A laptop will allow you to work from multiple locations.
- High speed internet. Get the best you can afford.
- A phone line dedicated to the business and possibly a fax line. An internet capable phone to receive emails and calls on the go is ideal.
- A tax license, occupational license and incorporation papers.
- A bank account with your company name or DBA (Doing Business As) with a debit card.
- A merchant account and gateway software for taking credit cards.
- I also suggest a private work area in your home or office with a comfortable chair.
3) Choose a hosting plan from the aforementioned options based on your budget and the amount of customers you feel you can grow to in the next three years.
4) Get a good web host. This is probably the most important step in this process or I wouldn’t have underlined it. Choosing a web hosting company to resell for is crucial; take into consideration the following:
- Does the company have a good reputation? Be sure to check out their track record by researching online and visiting reputable forums such as www.webhostingtalk.com .
- Do they own their own datacenter? While this is not mandatory, a company that has its own datacenter is better able to communicate between departments such as accounting, support, security and maintenance. Their ability to monitor and work within their own company to perform all functions of service saves you time and frustration.
- Do they have 24/7/365 support? Look at all of the options that your host offers such as email ticketing, live chat and phone support.
- Does your host support the platform you choose to work with? (Windows/Linux).
- Does your host have the software options you need such as a good control panel (like cPanel/Plesk), accounting management software (like WHMCS) and web development tools?
- Does your host offer a manageable monthly plan and easy payment options?
5) Learn and understand your software to manage tickets, accounting and your control panel. Set up a sample site to get to know your way around.
6) Set customer pricing. This can be tricky. You are competing with companies who offer $1.00 pricing online and others who can charge hundreds of dollars. Research pricing and then break down your resources. Divide up server cost, operational costs and other factors. Websites needing secure certificates for e-commerce will be charged a higher rate as will companies demanding more space and bandwidth.
7) Build an e-commerce website with a helpdesk. Adding an e-commerce option to your company’s website will allow you to take credit card payments online, saving you the hassle of cashing checks. Encourage users to set up automated billing so that you have to worry less about tracking each payment. Also set up a help desk option where customers can contact you if trouble arises.
8) Create business documents. Templates found online can be helpful in creating proposals, agreements and terms of service. Be sure you carefully craft these important documents and have your lawyer review them for accuracy. Also create an informative email to send to customers after they have signed up giving them their access codes, URLs, and email information. We have found it is helpful to highlight and bold the first line that reads, “IMPORTANT. This email contains important information and passwords you will need now and in the future. You must keep this email.”
9) “Early to bed, early to rise, work like hell and advertise.” – Laurence J. Peter. Be sure to advertise your site accordingly. Add banner advertisements or network ads. Advertising can get expensive so reach out to those you know first.
So, with all of the beginning steps out of the way, there are a few things you should be prepared for in the reseller business:
- Reseller hosting offers you a way to earn residual income. Many customers, after initial setup, will need very little work every month to maintain their account, but the same check keeps coming in, month after month. These add up quickly and can turn into a tidy profit if you can get customers on board right away.
- With most reseller options there is no equipment to buy. Therefore you can save yourself the expense of purchasing a server and lease space on a server in the datacenter, usually on a monthly plan.
- A reseller business is very compatible with other services such as website design, website development, gaming forums, domain name registration and blogging.
- Many resellers have been known to work from home in their pajamas.
- You may never meet your clients.
- You must be knowledgeable at handling the ins and outs of web hosting, this can take some time for those not familiar with the industry.
- Problems happen at the oddest times in this industry. A customer usually forgets his password right as you are sitting down to dinner or boarding a plane.
- Web hosting is a 24/7/365 business and you will receive emails and phone calls during the holidays, on vacation and on Sundays. Due to the time sensitive nature of the business, you will need to respond as soon as possible.
- Many customers will need to be hand-held through every facet of your relationship.
- You may never meet your clients. (this can also be a pro)
What is the Best HostDime Package for Resellers?
HostDime no longer offers reseller packages to prevent directly competing with our clients. Therefore our product line has evolved to implement KVM VPS packages. These provide the same interface and features that shared and reseller packages provide but with much more security, stability, reliability, and level of customization than the shared environment can offer.
Lastly, if this all sounds like a bit too much work, consider becoming an affiliate where the web host pays you for leads you send to them. Each time you send a lead, you receive money.
Whatever you choose to do, HostDime wishes you luck in all your endeavors!
Are you looking to leave your current web host? Use coupon code VHOST for 15% off recurring every month on any HostDime package.
Vikki F. is the Director of Marketing for HostDime.com, Inc. and has been a reseller herself for almost 10 years. Let us know if you have any questions by sharing your comments in the box below, or by sounding off on our Facebook Page or Google+ Page, or by tweeting us at @HostDime.