How Does Reseller Hosting Work?

Julia

Julia Raznik · 20th May 2021·Reseller Hosting

How Does Reseller Hosting Work?

In our always online and interconnected world, more and more of us are turning what were once niche side jobs into growing and profitable businesses. One industry that’s seen a meteoric rise in the last decade is reseller hosting.

It’s become the perfect accompaniment to those already operating in today’s digital industries, and it’s pretty easy to get started. How does it all work though, and is it the right choice for you? Find out as we delve into the exciting world of reseller hosting.

What Is Reseller Hosting

Resellers will buy up a set amount of server space from a large web hosting platform, before then selling this on to their own clients. It’s best operated as a full-time business, and the reseller has total control over branding and pricing.

You can read a more in-depth overview over on our reseller page.

Pros and Cons

Pros

Low barriers to entry
Build your own brand and customer base
Customize packages to meet client needs
It can become a substantial revenue stream
Your web host will cover technical issues for you
Easy setup
Cons

It requires some industry knowledge
You’ll spend a lot of time on client acquisition and marketing
You’ll be competing in a saturated market

How Does Reseller Hosting Work?

Reseller hosting provides you the perfect opportunity to create a ready-made and fully on-brand business. Since you’ll be renting server space from well-established market players, you don’t need to worry about the technical aspects of your venture as all of the back-end tasks will be taken care of.

However, that doesn’t mean you can just sit back and expect the clients to start rolling in. To make reselling a success means managing more moving parts than you might think. We’ve covered the critical points you’ll need to consider below.

Domain Name and Website

Before you start winning clients, you’re going to need a domain name and a sleek, modern website to sell your services. Many choose to build a website with the hosting platform they’ve chosen to rent space from to make for easy management.

It’ll need to be branded to match your other business sites, or if you’re starting from scratch you can really go wild creatively. If you haven’t got the skills to build your own site, you might want to engage a professional or sign up for a platform that offers an intuitive web builder.

Technical and Customer Support

Now your website is up and running, you’re going to need a way to capture new clients and manage current customer queries. Users today expect 24/7 support and fast responses to queries. We’d recommend linking your site to your data host’s customer service team at first. This way, any queries will be handed off to a team of professionals and you can focus on sales, marketing, and winning new clients.

Billing

A big advantage of reseller hosting is that you’ll receive a regular monthly income from subscriptions. As your customer base grows you’ll need an advanced customer management and billing dashboard to keep track of everyone. A popular choice is Web Host Manager Complete Solution (WHMCS) which automates invoices, issues payment reminders, and can set up monthly autopay options.

Plus, it has an integrated customer support tool to allow you to seamlessly communicate with your clients and provide a personal touch to your interactions.

Business Goals

Without a clear business goal, your reseller venture simply won’t work. The pool of competition is huge in the web hosting world, and if you plan to target those looking for a generic shared hosting package, you’re going to have a difficult time.

The big-name platforms have all but sewn up the market when it comes to general hosting, and you’ll face thousands of competitors when you first launch. Your business goal should therefore be targeted to a niche. You might want to become a specialist web host for one type of business only, for example, restaurateurs and barbers.

Many others choose to focus on small and medium sized businesses in their local areas. You’ll generally have fewer competitors, and be able to build up personal relationships with potential clients via networking events or local advertising campaigns.

If you already have an established client base that trusts you, reselling works perfectly as a complementary service, giving you a valuable extra revenue stream.

Budgeting and Price Range

While the initial outlay to rent server space is usually relatively inexpensive, you’ll need to factor in advertising, marketing, and staff costs into your business model. This will of course all depend on how ambitious your plans are, and how large your potential pool of clients is, but you’ll need a fully costed plan before you can set your price.

Set your prices too low and you’ll quickly go bust, while aiming too high will drive away potential clients. We wouldn’t recommend entering a price war with the competition either; a race to the bottom usually never ends well. Instead, try and pitch your reseller business as a premium service. Take the basic packages offered by your web host and see what value you can add to them.

Sell yourself as the go-to web host platform in your area, one that provides exceptional and personalized customer service, and you’ll be able to justify a higher price.

Marketing and Promotion

Promoting your new business is another vital piece of the puzzle in a successful reselling venture. Many newbies to the industry find they can get a lot of traction with highly targeted Google and Facebook ads, while others prefer to focus on local outreach campaigns.

Either way, you’ll need to start marketing your business as soon as you’re ready to accept your first customer, and you should ideally have a strategy in place well before this. You might want to do some target audience analysis before you even find a web hosting partner.

How many potential customers are there? What does the competition look like in your area? What will you do specifically that makes you different? All of these questions and more will all need to be answered before you can start to bring those customers in.

Creating Reseller Packages

Creating your own hosting packages and tiers is one of the most enjoyable aspects of being a reseller. You get to be your own boss, set your own prices, and choose exactly what you’re going to offer. This will usually be heavily influenced by your market research and your tiers will be tailored to the wants of your customers.

Most of your considerations will be around how many websites your clients can operate, how much bandwidth they need, and how much storage you’ll provide. However, where you really get to shine is in the little extras you can throw in. For example, you might find people are crying out for a convenient combination of website design and hosting, or you could leverage off your people skills and create an all-purpose digital marketing agency.

Key Components of a Reseller Plan

Reseller Hosting Components

While not essential, it can definitely be useful to understand how the technical aspects of a reseller business work. This helps you to field customer queries and direct your own questions back to your web host service team.

Web Server and Database

The web server is the space you’ve rented out and where all of your client data sits. By using a technique called ‘name-based virtual hosting’, all of the websites under your control are managed under just one IP address. This lets resellers cheaply host multiple websites on the same server, and you can even find deals as cheap as $8 per month to host up to 15 websites using this method.

Mail Server

Fairly self-explanatory this one; your mail server will manage all of the email needs of your clients, but it’s an area you shouldn’t overlook. Some email platforms, such as Zimbra and Microsoft Exchange, offer all-in-one services with features like calendar and scheduling functions, mailbox synchronization, and contact management.

Make sure to check what kind of email services your web host is able to provide, as you might have to answer questions from clients asking what sort of email platforms your reselling business can support.

DNS Server

The Domain Name System (DNS) server is an integral component to any reseller business. This piece of tech allows you to create subdomains for your clients, redirect traffic and create additional entry points to a website for marketing purposes. Plus, it gives your customers the chance to create their own branded name server addresses.

White Label Server

This rather fancifully titled server is actually what allows you to provide your reseller service without your clients knowing you’re subletting space from another platform. Most resellers like to have full control over the branding of their businesses, and the brand-agnostic server makes sure that you appear as the sole provider to your clients. They won’t know that you’re reselling at all.

How to Spot a Reliable Hosting Platform

Reputation
Reputation

A quick search through social media, review sites, and industry forums will quickly tell you how good your chosen hosting partner is. Make sure to find one with a solid reputation, or its mistakes will reflect badly on you

Security
Security

The best platforms will offer a huge range of security tools as standard. The best will include free SSL certificates, daily data backups, regular scans, and monitoring of your client sites

Speed tests
Speed tests

Choose a provider that has publicly available speed tests and a range of server location choices in a variety of locations. The closer servers are to your customer base, the faster their websites will load

Uptime guarantee
Uptime guarantee

You should find a partner that offers a 99.99% uptime guarantee. Ideally, you should be compensated for any breaches of the uptime agreement by the host, so read the terms and conditions carefully before you sign

24/7 support
24/7 support

Most resellers will be utilizing the customer support teams from their web host. Ensure that 24/7 live chat is offered alongside a range of other contact options

Reputation
Reputation

A quick search through social media, review sites, and industry forums will quickly tell you how good your chosen hosting partner is. Make sure to find one with a solid reputation, or its mistakes will reflect badly on you

Security
Security

The best platforms will offer a huge range of security tools as standard. The best will include free SSL certificates, daily data backups, regular scans, and monitoring of your client sites

Speed tests
Speed tests

Choose a provider that has publicly available speed tests and a range of server location choices in a variety of locations. The closer servers are to your customer base, the faster their websites will load

Uptime guarantee
Uptime guarantee

You should find a partner that offers a 99.99% uptime guarantee. Ideally, you should be compensated for any breaches of the uptime agreement by the host, so read the terms and conditions carefully before you sign

24/7 support
24/7 support

Most resellers will be utilizing the customer support teams from their web host. Ensure that 24/7 live chat is offered alongside a range of other contact options

Summary

If you already run a business in a related field, like web development, marketing, graphic design, or a digital marketing agency, then adding a reselling business as an additional income stream could prove very lucrative for you. In fact, those that manage to bring in a large number of clients can even find they start to get more income from reselling than from their primary business.

We’d recommend it for those that have additional time and resources to devote to something new. While it does take a lot of initial groundwork to get going, the dividends only increase the longer you spend as a reseller.

However, it’s definitely not for those that think it’s a chance for easy money. It’s true that you can quickly and easily sign up to a hosting platform and start reselling, but many underestimate the effort it takes to build a strong client base. If it’s a challenge you like the sound of, why not head on over to our reseller page and see if you can find a package that grabs your eye.

Frequently Asked Questions

Can You Make Money With Reseller Hosting?

Most definitely, but be prepared to spend at least three to six months laying the foundations of your business and winning clients initially.

How Much Capital Do I Need to Get Started?

Not a lot. You can find hosting deals for up to 15 clients from around $8 to $15 per month. You’ll need to factor in your own costs for marketing and advertising though.

How Do I Promote My Business?

Many find success with targeted Google and Facebook ads. Try and focus on a niche or local market to start off with.

What Does White Label Hosting Mean?

This means that your clients won’t know you’re a reseller. Your hosting platform will provide unnamed servers that you can rebrand to fit your business, and you’ll appear as the primary provider.

Julia
Julia Raznik