Reseller Hosting vs. Affiliate Programs - Can You Turn a Profit?

Reseller hosting and affiliate programs generate income in different ways. With reseller hosting, you purchase hosting resources from a provider and resell them to your clients at a marked-up price, actively managing their hosting needs. With affiliate programs, you promote a hosting provider's services and earn a commission for each referral that results in a sale.

Reseller hosting requires more management and technical skill, while affiliate programs rely on marketing effort to drive new customers to the provider.

Read on to see how each model works in practice, and which one fits your skills, time, and appetite for risk.

Key takeaways:

• Reseller hosting means buying and reselling server space under your own brand; affiliate marketing means earning a commission for referring customers to a host you don't manage.

• Reselling takes more upfront work and technical familiarity, but lets you set your own prices and build a repeat-revenue client base.

• Affiliate programs need no technical skill and can be set up in minutes, but you only earn when a referral converts, and you can't retain the customer afterward.

• Reselling suits people with time, capital, and an existing business to build on; affiliate marketing suits bloggers and content creators adding income to an established audience.

What Is Reseller Hosting?

Reseller hosting is a business model where you buy server space from a large web hosting platform, rebrand it, and sell it on to your own clients.

It affords the opportunity to set up a ready-made hosting business, using the resources of an already established partner.

Check out our informative article, "What is Reseller Hosting?", for valuable insights and detailed information on the topic. If you're looking to explore reseller hosting further, this comprehensive guide is definitely worth reading.

What Is an Affiliate Program?

An affiliate program pays you a commission for promoting a particular product or service and referring customers who buy it.

For example, a tech blogger might be a big fan of a certain hosting platform that they'll recommend via articles and promotional content, and receive monetary rewards for directing traffic to that site.

What Do Reseller Hosting and Affiliate Programs Have in Common?

Reseller hosting and affiliate programs present different opportunities for generating income online, but they also share some common benefits.

Potential for passive income generation

Use established brands and infrastructure instead of building your own

Low upfront investment for business growth

These advantages make them popular choices among entrepreneurs and marketers alike.

What Do You Need to Succeed as a Reseller or Affiliate?

Reseller Hosting Must-Haves

• Relevant experience in related fields You must treat reselling with the same respect you would any other business. It really helps to have experience in a related field like website development, design, or digital marketing. This will give you a pool of existing contacts you can sell hosting to, as well as giving you a leg up when just starting out

• Relationship building skills Since a lot of your time will be spent winning new clients and keeping current ones happy, you’ll need to be good with people

• Time to commit It’ll take time and effort to integrate reselling into your existing business, and even longer if you’re starting from the ground up

• A good hosting provider You need a partner with excellent customer service, top-notch security, and excellent uptime stats. Remember, you’re entirely reliant on your host for all the technical aspects of your business. If you chose poorly, this bad service will reflect on you

Affiliate Program Must-Haves

• A genuine interest in the product Anyone can sign up to be an affiliate marketer, but only those that are interested and believe in the product they’re selling will succeed. Find a service that speaks to you personally and it’ll help you make a genuine connection with your audience

• An established online presence This could be a blog, social media account or even a YouTube channel. All the better if you already have an attentive audience to speak to. If you haven’t already built trust with your readers and viewers, it can be an uphill struggle to try and sell affiliate products to them

• A strategy You can’t just place a link in an article and hope people will click on it. You’re going to need to pull together a marketing strategy. Write articles that offer value to your audience, or create videos around the product you’re looking to promote. Explain to people just why you believe in what your offering

• A good hosting provider We’ve repeated this from the reseller must-have list as it’s vital for affiliate marketers too. If you’re plugging a bad or unreliable product, this will quickly come back to bite you in lost reputation. Only choose products you personally believe in

What Are the Perks and Pitfalls of Reseller Hosting?

Perks of Reseller Hosting

• It’s an easily scalable business - Since your hosting provider is dealing with the technical side of things, you can easily purchase more rack space as your business grows. Plus, you’ll earn repeat income each month

• It’s affordable - Your start-up costs are limited to how much server space you want to purchase, and your sales and marketing budget is up to you

• Total control over branding - Your clients won’t know you’re reselling server space from another hosting company. You can keep everything totally on brand and create your own unique packages

• Technical support is covered by your host - Your success is linked to your reseller hosting provider. Most platforms provide comprehensive customer and technical support, but make sure to choose the best reseller hosting.

Pitfalls of Reseller Hosting

• It’s a lot of hard work upfront - You’ll spend the majority of your time hunting for new clients. That means devoting time to sales, marketing, networking and looking after your customers. All time-intensive tasks

• The market is saturated - Since it’s so easy to become a reseller, the market has exploded in recent years. You’re going to need to target a niche and leverage existing business relationships to succeed. It’s difficult to enter this industry from scratch

• There can be a technical learning curve - We’d recommend you at least be familiar with the world of web hosting before starting. While you don’t necessarily need detailed technical expertise, a little knowledge of the industry goes a long way

What Are the Pros and Cons of Affiliate Programs?

Pros of Affiliate Programs

• Generate passive income - It’s a lot easier to set up passive revenue streams with affiliate programs. If you have high ranking blogs in Google, these can bring in a good income for years

• Very easy to get started - Most web hosting platforms let you sign up for affiliate programs in just a few minutes. Once you’ve got your marketing link, all you need to do is promote it

• No expertise needed - All you need is the passion for a product in order to promote it. You’ll never have to answer any technical queries

• It’s flexible and convenient - You can dip in and out of affiliate programs as you like. There’s no pressure to keep it running as a full-time business, and you get out as much put in, so the work ethic is up to you

Cons of Affiliate Programs

• You’ll be working on commission only - You only get paid when a customer actually converts. That could mean you need hundreds, if not thousands of readers to start making money. Remember, there are no guaranteed sales

• You can’t build a customer base - Unlike reselling, you can’t retain customers for repeat income. Once they’ve clicked a link and bought, they’re gone

• You can’t control the competition - You could find yourself competing in a pool with dozens of other affiliate marketers, all chasing the same link. The more there are, the smaller the piece of the pie you get. However, if you’re willing to put in the work, you can quickly outshine your rivals

What Are the Key Differences Between Reseller Hosting and Affiliate Programs?

How Do Promotion and Marketing Differ?

Reseller hosting gives you full control over branding and marketing, while affiliate programs bind you to a strict set of guidelines about what you can and can't say about the product. With this in mind, we'd recommend reselling for you creatives out there.

How Do Risk and Reward Compare?

Reselling requires a lot more hard work on your part, but the rewards are much higher for it. While just about anyone can join an affiliate program, you should take care to check just how big your commission will be.

How Much Capital Do You Need?

Reseller hosting needs a minimum of cash set aside to rent out hosting space, plus an advertising budget to get found on Google and Facebook; startup costs could range from a few hundred to a few thousand dollars depending on your ambition. Affiliate programs, on the other hand, have no set-up costs at all.

Who Controls Pricing?

Resellers have much more freedom to control their prices, and many carve out a niche as a premium seller by charging a markup for additional features. Affiliate partners have no price control at all, and web hosts can change commission terms at any time.

Who Handles Customer Support, Reseller or Affiliate?

Affiliates aren't involved at all in supporting customers. You're simply guiding folks to the front door, and your partner web host is fully responsible for any technical queries, issues, and complaints down the line. A good choice for those looking for a more hands-off business model.

Resellers have a couple of different options open to them, depending on how involved they'd like to be. Most hosting companies will allow resellers to piggyback on the provider's own customer service team, a choice most newcomers to the industry will opt for. So, if any of your clients have any problems, they'll be passed to the host's service agents via your website. Everything will still be branded under your company name though.

Alternatively, you can choose to become directly involved with the customer service aspects of your business, responding to clients directly. This is a great way to build relationships with them and provide a highly personalized service, but bear in mind that your customers will expect 24/7 support and you'll need some technical knowledge to get started. Although you'll still be able to hand off the most complex issues to your data host.

When Should You Become an Affiliate?

Affiliate programs are an ideal choice for those that already have some knowledge of digital industries and web hosting, and are looking for a simple passive income stream. While an easy industry to break into, you should still have a good working knowledge of the product you're going to promote in order to be authentic, and you'll need to be aware of the competition that might be doing the same thing.

It's unlikely you'll be able to make a full-time income as an affiliate partner, and you'll most often find this method used by bloggers and content creators that want to add an additional revenue source to an already established business.

When Should You Become a Reseller?

Reseller hosting is much better suited to those that have the time and resources to dedicate to building a business.

It's a difficult sector to start from scratch in, so it's best suited to those that already have a successful business in a related field. It tends to draw more creative types and those that are very customer-focused. Reselling affords you a great opportunity to build a lucrative venture that you can put your very own personal brand to.

Summary

Both affiliate programs and reseller hosting can be quite profitable ventures for those willing to put the work in. Generally, reselling will require far more of your time and resources to make a success of it, but the potential rewards are much higher with the ability to set your own prices and grow your client base. If this sounds like an interesting business model to you, why not head on over to our Verpex reseller page to find out more.

Affiliate partners will likely see lower returns than resellers, but it's a much easier revenue stream to set up. Anyone with a basic understanding of the web hosting industry can get started, and you could be signed up and making commissions in just a few hours.

Whichever path you decide to go down you should remember that competition is stiff. These industries are popular for a reason, and you'll be competing in a crowded market. Make sure to do the groundwork before you start, research ways to stand out from the crowd and be ready to put the work in.

Frequently Asked Questions