How Does Reseller Hosting Work? Functions, Value & Rewards

Written by Web Hosting Expert

Reviewed by Technical Editor

Updated May 15, 2023
How Does Reseller Hosting Work? Functions, Value & Rewards

Reseller hosting works by allowing an entrepreneur to rent server space from a large hosting platform and then resell that space to third-party clients under their own brand.

It's like having a giant pizza and selling slices to your friends. The pizza place makes the pizza, and you share it with others who want a piece. In this example, the pizza place is the hosting company, and the pizza slices represent internet space for people's websites.

The Mechanism of Reseller Hosting


7 Core Factors in Operation

Reseller hosting lets you start your own business using the server space from big hosting companies. Even though they handle the technical stuff, you can't just sit back—success in reselling means managing a lot of details.

Knowing a bit about the tech side can help you answer customer questions and talk to your hosting team better.

Let's look at the key things to think about.

1. Domain Name and Website

2. Technical and Customer Support

  • Set up a system for managing client inquiries, ideally 24/7.
  • Initially, consider outsourcing this to your hosting platform's team to free up your focus for sales and client acquisition.

3. Billing

  • Establish a customer management and billing dashboard to handle subscriptions.
  • Consider tools like WHMCS that automate invoices, payment reminders, and offer integrated customer support.

4. Business Goals

  • Define clear, niche-targeted goals for your reselling venture.
  • Consider focusing on a specific business type or local SMBs to reduce competition and build personal relationships.

5. Budgeting and Price Range

  • Factor in all costs - advertising, marketing, staffing - in your business model.
  • Don't undersell or oversell; instead, position your reselling business as a premium service by adding value to basic packages.

6. Marketing and Promotion

  • Develop a marketing strategy, considering options like targeted ads and local outreach campaigns.
  • Perform target audience analysis before deciding on a web hosting partner and understand what makes you different.

7. Creating Reseller Packages

  • Tailor hosting packages and tiers based on market research and customer wants.
  • Consider offering additional services, such as website design or a full-fledged digital marketing agency.
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4 Components of a Reseller Plan


4 Components of Reseller Plan

1. Web Server and Database

  • The web server, where all client data is stored, uses 'name-based virtual hosting' for cheaply managing multiple websites.

2. Mail Server

  • Manages all client email needs.
  • Check your host's email services as clients may inquire about supported email platforms.

3. DNS Server

  • The DNS server lets you create subdomains for clients, redirect traffic, and allow clients to create their own branded server addresses.

4. White Label Server

  • White label server allows you to resell without your clients knowing, ensuring full control over your business branding.

Reseller Hosting Workflow


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.

For a deeper understanding, additional details, and more information about reseller hosting, be sure to check out our comprehensive article, "What is Reseller Hosting?", featured on our blog.

Strengths and Weaknesses of Reseller Hosting


Strengths

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
Weaknesses

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

Advantages of Cloud-Based Reseller Web Hosting


Businesses can access their hosting services with cloud-based reseller hosting from any location, enabling them to swiftly and efficiently extend their hosting environment as needed.

Cloud-based reseller web hosting provides various advantages for small businesses, including cost-efficiency, scalability, and flexibility. This approach involves renting web hosting space from a third-party provider, promoting cost savings and control. The key benefits include:

Universal Accessibility
Cloud-based reseller hosting allows access from any location, facilitating rapid expansion as needed.

Expanded Service Range
It provides access to a broad array of products and services typically not included in traditional hosting packages.

Ease of Management
The hosting provider usually handles server management and support, enabling businesses to focus on their core operations.

Additional Tools and Services
Cloud-based reseller hosting often includes useful tools and services, such as automated backups and security features, enhancing the hosting environment's optimization.

Cost-Effectiveness
With no need for hardware investment or IT staff for hosting management, cloud-based reseller hosting often proves more cost-effective than standard hosting services.

Due to these benefits, cloud-based reseller hosting becomes a favorable choice for businesses of all sizes.

How to Spot a Reliable Hosting Platform


Reputation

Reputation

Research on social media, review sites, and forums to ensure your partner's solid reputation.

Security

Security

Select platforms offering robust security tools, including free SSL certificates, daily data backups, and regular scans.

Speed tests

Speed tests

Choose providers with public speed tests and multiple server locations to optimize site load times.

Uptime guarantee

Uptime guarantee

Seek partners with 99.99% uptime guarantee and compensation for any breaches.

24/7 support

24/7 support

Ensure the hosting partner provides round-the-clock live chat and multiple contact options.

Limited Control in Reseller Hosting


It is critical to understand the restrictions of reseller hosting. You don't have full control over the servers and their setup as a reseller.

Furthermore, you will not have complete control over the hosting of your customers' websites. This implies you'll have to rely on your reseller hosting provider to provide a reliable and secure hosting environment for your customers.. It's also worth noting that, depending on the hosting provider, you may be restricted in the hosting options and services you may provide to your end customers.

To guarantee that your clients are content with the hosting service you give, you must devote time in researching the parent hosting company and learning about the features and services they provide. Also, it is critical to pay attention to client evaluations and feedback to ensure that your hosting meets their expectations. You can successfully run your reseller hosting business if you understand the restrictions of reseller hosting and work with a reputable hosting firm.

7 Legal and Regulatory Requirements for Reseller Hosting


Starting a reseller hosting business involves meeting several legal and regulatory requirements. To ensure that you remain compliant, here are seven key requirements to keep in mind:

  1. Register your business in the jurisdiction where you plan to operate
  2. Comply with data protection and privacy laws
  3. Ensure that your hosting services meet industry standards
  4. Have the necessary cyber security measures in place
  5. Provide clear terms and conditions for your hosting services
  6. Be transparent about the fees and costs associated with your hosting packages
  7. Explain how customer data is used and stored.

Reseller hosting security considerations


While reseller hosting has many benefits, security should be given first priority. The security of all the websites you host and maintain is your responsibility after you become a reseller. There are a few factors that should be taken into account in order to secure the security of your clients' websites.

  • Be sure your reseller hosting provider has the highest standards of security controls, including a secure control panel, secure FTP, and firewalls.
  • Keep a regular eye out for any harmful activity or security lapses on your clients' websites.
  • Make sure your clients use secure passwords for their websites.
  • Check the security and up-to-dateness of every script and piece of software you install on clients' websites.
  • Periodically backup all the information on the websites you work with.
  • Inform customers of recommended security measures.
  • When conducting any online transactions, use a secure online payment gateway.
  • Ensure that any harmful attacks on your reseller hosting server are prevented.

10 Ways to Market Your Reseller Hosting Company


Are you looking for ways to promote your reseller hosting business? Reseller hosting can be a great way to generate additional revenue for your business, but it can be hard to stand out in an increasingly competitive market. Here are 10 ideas to help you promote your reseller hosting business and stand out from the competition.

1. Make use of social media: Social media is a fantastic tool for spreading the word about your reseller hosting company. On a number of sites, you may set up profiles, provide updates about your offerings, and interact with possible clients.

2. Build a Website: Building a website for your reseller hosting company is a terrific approach to advertise and describe your services. Make sure your website has clear pricing information and is SEO-optimized.

3. Employ Paid Advertising: Promoting your reseller hosting company with paid advertising can be quite effective. To target potential clients, you can utilize paid advertising on social networking sites or search engines.

4. Provide Discounts: Providing discounts or promotions might be a good approach to draw in new clients. Customers that sign long-term contracts can receive unique bundles or discounts on your services.

5. Participate in Trade Shows: Attending trade exhibitions and other business events will help you advertise your reseller hosting company. You can set up a booth, meet possible clients, and network with other business people in your field.

6. Speak with Influencers: Influencers can help you advertise your reseller hosting company. You can get in touch with influential people in your field and give them discounts or other rewards for promoting your products.

7. Publish blog posts: Blogging on reseller hosting-related subjects might help you gain more visibility and draw in new clients. Make sure your blog postings have clear calls to action and are useful.

8. Employ email marketing: Email marketing can be a useful tool for informing clients about new products and deals. Email marketing can be used to provide newsletters, advertising emails, and other information regarding your reseller hosting company.

9. Engage in Internet Communities: Joining in online reseller hosting groups can be a terrific method to promote your company. You can participate in forums and discussion boards to interact with possible clients and respond to their inquiries.

10. Networking: One of the finest ways to advertise your reseller hosting company is by networking. To locate consumers and learn more about the market, you can network with other industry professionals and go to networking events.

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 reseller package that grabs your eye.

Frequently Asked Questions

What is reseller hosting?

Reseller hosting is essentially a way for you to purchase hosting resources from us in bulk and then to re-sell those resources directly to your clients. You can set limitations on disk space, bandwidth, email usage, and other features on a per-package or per-site basis. We provide a completely managed service from a technical perspective - the server space, hosting resources and support come from us and you are responsible for supporting your end-user clients. You can even brand your clients' cPanels with your own logo for a super professional image.

But reseller hosting isn’t just for web designers, agencies and start-up hosting companies - it’s also a great option if you run a lot of websites personally. Because you have access to WHM, you can create each site with its own separate cPanel. This means each site or client gets their own login to manage their own hosting settings, isolating them completely from other users on the same server or under your account. This improves site performance and resiliency from malware attacks.

We have a lot more information on what is reseller hosting on our blog.

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.

You can learn more about white label hosting on our blog.

Can you make money with reseller hosting?

You definitely can. There are countless success stories from entrepreneurs that have managed to take on hundreds, even thousands of clients, just be aware of the work you’ll need to put in.

Read our article to learn more about web hosting business income.

How long does it take to become a reseller?

In theory, you can be up and running in just a few minutes. However, only those that have done diligent research, and have written a clear business plan will succeed.

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 reseller hosting business?

Many find success with targeted Google and Facebook ads when promoting their reseller hosting website. Try and focus on a niche or local market to start off with.

Affiliate program vs reseller hosting: What is the difference? Which is better?

Both have advantages and disadvantages and one isn’t better than the other. Rather, each will be better in different circumstances.

Those looking to build a business should try reselling, while those wanting passive income should become affiliates.

You can learn more about the differences between reseller hosting and affiliate programs on our blog.

How can I create custom plans for each individual account?

You can get the step-by-step procedure to create custom plans for an individual account in this guide

Am I responsible for my clients' content/behaviour on your servers?

Yes, you are responsible for what your reseller hosting clients upload on our servers.

What restrictions are there to reselling?

There are no restrictions to reselling, except for contents that are illegal or against our terms of service

How can I monitor the bandwidth usage of my accounts?

To monitor the bandwidth usage of your resold accounts, go to WHM -> View Bandwidth Usage

Julia Raznik
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Julia Raznik
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