Reseller
Hosting Explained
The term Reseller according to the dictionary means
to sell again i.e. to sell a product or service to the public or
to an end user, especially as an authorized dealer, while making
sure that you make a profit on the sale.
Reseller Hosting
Reseller hosting is no different either, a reseller buys a Web
hosting package from a hosting company and tries to sell it independently.
The profit for the reseller lies in either the discount or in the
commission s/he gets from selling an account.
For example: The reseller might purchase a package whose features
are valued at $100 for $90. So, the reseller stands to make a $10
profit on selling the package to customers. Normally as the customers
increase, so does the profit margin for the reseller.
Or, you can get some money by earning commissions from a hosting
company. This happens when you refer potential customers to the
hosting company. If the customer signs up with the company then
you earn a small recurring commission until the customer uses the
services.
Most web hosting companies try to outsource their services to resellers
as it helps them to extend their business reach without the cost
of marketing and sales and also helps them to concentrate on the
business side of things.
What can be resold
As a reseller you can decide what kinds of services you can sell.
You can provide shared, dedicated or co-location web hosting or
merchant accounts, store fronts etc.
If you go with hosting then it might be useful to offer some other
hosting related services like domain names, search engines etc.
Of course, if you have problems selling these value added services
in the beginning then you can sell them later.
The cost and resources involved
The cost of becoming a reseller and the equipment and people required
in order to be successful depends on many factors.
If you just plan to earn commission by referring people to the
hosting company by using the Internet, then you do not have to put
up a lot of money, all you need is an Internet ready PC and an Internet
connection.
For a small start-up not a lot of money and resources are required.
You can purchase a good reseller package from a hosting company
by paying them some money upfront. All that is needed is a decent
computer that can manage the accounts of customers and a good Internet
connection.
It is advisable to start small if you are very new to the concept
of web hosting and reselling. Then you can expand as you go on and
start getting more and more customers in which case offering domain
registration is also a very good way to make profits.
If you have the money and the experience then you can go as far
as buying all the server equipment required, in which case you will
also be responsible for all the server maintenance costs.
The other option could be leasing a server as this will be cheaper
than buying the server, but here as well you are responsible for
all the maintenance and running costs of the server.
In the above two cases you also need to make sure that you have
multiple connections with the hosting company so there are no complications
in case a connection goes down.
Upside
The best thing about being a reseller is that you do not require
a lot of upfront investment.
There is no need to have a lot of technical knowledge. Account
management and Internet skills are all that is required. However,
it would be really handy if you have some sales and marketing experience
so you can interact with your customers better.
The hosting company generally provides and maintains all the hardware
and software.
You do not need to hire a lot of IT staff to provide support. Providing
basic support and leaving the more technical issues to the parent
company support staff can be easily achieved.
Downside
Support can sometimes be delayed, as you are dependent on the parent
company to handle the technical aspects. If there is a delay from
their side then you along with your customer are affected.
Sometimes customers leave you if they find out that you are a reseller
and not a real hosting company.
Tips for marketing yourself
If you are starting out on a small scale then visiting message
boards and posting your services there is a good idea. A lot of
potential clientele with relatively small hosting needs also frequent
message boards and outline their desired services.
Having contests is a great idea for bringing awareness and interest
about your services.
Online ad campaigns, signatures, and text links are very helpful
techniques.
Once you have gotten a bigger budget then you can go for Google
ad words or PPC search engines.
The best strategy is to try out various combinations of these approaches
and work out the best one for your needs.
About the Author Ashish Jain
M6.Net
http://www.m6.net
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