Money in Reseller Hosting

Echilon · 16th August 2008

My hosting needs have recently expanded to need more than most packages provide. It's not like I have astronomical requirements, so I'm thinking of getting a reseller package. I'd only be using about 20% of what most seem to offer, so I'm thinking I might as well resell the rest using my own brand.

The main concern I have is how easy is it to make money from reselling hosting? I'd get the site up and recommend it in forum threads and do the usual SEO, but has anyone actually made any money from it? To be honest I'm just looking to break even on what I pay for the reseller account (~£150/year).

adamsmith · 16th August 2008

I know for a fact some of our resellers (primarily web designers) charge each of their customers more for their hosting than we charge for the entire reseller account. Therefore if you've got a captive audience or a niche market to appeal to then massive profits are possible.

If you want to hosting to the general market then you will need to give them some reason to host with you over more established competitors. Are you prepared to offer telephone support for instance if you're only aiming to break even? You might find it quite challenging for minimal return.

MountedWeb · 16th August 2008

Adam Smith is right, it really depends if you can caputre a small market and sell to them.

M8INTERNET · 17th August 2008

In principle, if you may as well purchase a reseller account then do so
Some people simply purchase them as they more flexible than basic fixed accounts and allow for future expansion
Equally, you can sell off the excess
However, if you do become a reseller then make sure you can cope with the customers and their support requests
The majority of customers looking for website hosting have normally messed around with either their own ISP webspace or that of an existing provider
However a small number will be inexperienced and you may need to deal with a great deal of support tickets from them
Some customers expect a reply within an hour, others can be patient

You may also want to consider how customers will contact you; telephone, email, feedback form, support tickets, support forum, etc
Choose a method that works for you

Finally, pricing
With packages at £100 per year you may get two customers signing up per year, or with packages at £10 per year you may get twenty customer signing up per year
People expect what they pay for really, but equally would you rather have high income low quantity or low income high quantity
If one of your high income customer leaves then that will be a great loss of income on renewal, but losing one low income customer isn't such a loss

LeaUK · 17th August 2008

Target web designers; it's straightforward. They HAVE to design sites for a living, each site they design (and park with you) makes YOU money

Support is reduced to them only.

Forget selling one off sites as you'll be stuck supporting the world for no revenue!

Lea

othellotech · 17th August 2008

Quote:

Originally Posted by Echilon

The main concern I have is how easy is it to make money from reselling hosting?

Unless you're adding something unique/special to the offering, dont bother - the hosting industry is littered with "hosts" that do little/nothing more than resell space and 99% of them dont last a year.

You *really* dont want to have to support and manage hostees just to cover another £200 for your own hosting needs, either suck-it-up or rethink the requirement.

shortword · 18th August 2008

I'll second what Rob is saying. Unless you're offering something very special at this stage in the game you're flogging a dead horse. The market is extremely competitive.

The plus side is, that with little effort you may well get your reseller package paid for. But be prepared to field all sorts of "dumb" (read uneducated in this sector) questions from potential customers.