How to Start a Web Hosting Business? Strategy & Expert Advice

Written by Web Hosting Expert

Reviewed by Technical Editor

Updated May 15, 2023
How to Start a Web Hosting Business? Strategy & Expert Advice

To start a web hosting business, begin by choosing a reliable hosting partner and selecting an appropriate reseller package. Set up a client-handling mechanism, then focus on branding, marketing, and attracting clients. Lastly, prepare for growth by scaling your resources and maintaining excellent customer service.

Starting a web hosting business is like opening a store that helps people put their websites on the internet. You need to find a good partner, choose how many websites you can host, manage orders and questions, and find people who need your help. As your business grows, you need to be ready to help more people and keep your existing customers happy.

5 Steps to Start a Web Hosting Business


Step 1 - Choose the Right Hosting Partner

Finding the right hosting partner is going to be the first critical step to success. You might find yourself locked into a long-term contract, so getting this decision correct is crucial. Consider things like:

  • Price

  • Does the host offer 24/7 technical support?

  • Are reviews generally positive?

  • Is protection against cyber attacks offered?

  • What uptime guarantees are stated? You should be looking for at least 99.99%

  • Is White Label hosting offered? This means hosting will be completely anonymous and your customers won't know you’re reselling, giving you full brand control

  • Does it offer automation of certain daily tasks?

  • Where are the servers located? Look for regions close to your customer base for faster speeds

Step 2 - Select the Appropriate Package

  • Reseller packages come with a set number of cPanel accounts, indicating how many websites you can host. Start small with around 10-15 sites.

  • The package also determines your SSD space and bandwidth. Select one that suits your needs, keeping in mind that unlimited bandwidth can prevent future constraints.

Step 3 - Implement a Client-Management System

  • After choosing a host and package, you need a system for managing customer orders and queries. Consider a comprehensive management panel like WHMCS.

  • This tool, usually an add-on, handles billing, orders, and provides support tools. Ensure you can manage it or choose a host that provides support.

Step 4 - Acquire Clients

  • With your resources in place, start attracting clients. Begin with personal networks to test and refine your services.

  • Use branding and advertising strategies, consider paid Google ads, and optimize for keywords. Initially, handle customer interactions personally to better understand user needs.

Step 5 - Prepare for Expansion

  • As customers increase, be ready to scale up. Have additional bandwidth and cPanel accounts at hand.

  • Retain customers by adhering to service level agreements, being transparent about downtime, and taking responsibility when things go wrong.

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Your Role as a Reseller Hosting Provider


Without overcomplicating things, resellers are basically renting server space from big-name hosting companies, like Verpex, that they then rent out to multiple small and medium-sized businesses under a different brand name.

Resellers are like middlemen who rent space on the internet from big companies and then rent it out to smaller businesses under their own name. It's like renting a big car and then letting people pay you to use it for shorter trips.

Things to Consider Before Starting Your Hosting Business


Things to Consider Before Starting Hosting Business

Understand the Market

  • Understand the competitiveness of the web hosting market.
  • Stand out by pricing, unique customer service, and special selling points.

Define Your Brand

  • Identify your motivation for becoming a reseller.
  • Determine your target audience and their needs.

Find Your Niche

  • Stand out with a unique selling proposition.
  • Improve your search engine visibility and advertising focus.

Understand Your Competitors

  • Identify other businesses in your niche; if it's crowded, consider a unique approach.
  • Learn from competitors' strong points and incorporate those into your own business.

Budget Your Costs

  • Consider costs related to server space, hosting type, security, marketing, and customer service.
  • Adhere to a strict budget.

Choose Your Customer Support Model

  • Decide on your customer support channels - live chat, email tickets, customer helpline.
  • Choose between self-managed support or included support in your reseller package.

Remember to Advertise

  • Develop a robust marketing plan, including SEO, social media, and paid ads.
  • Launch marketing efforts before you launch to ensure a good start.

Going Solo, or Assembling a Team?

  • Decide your business size: Weigh the benefits of starting solo versus assembling a team.
  • Plan for potential expansion in the future.

Reasons You Should Start a Hosting Business


  • It’s easy to get started
    For most resellers, the web host itself is going to be doing a lot of the hard work for you. This gives you more time to focus on perfecting the customer service aspects of your business

  • You don’t need a lot of technical knowledge
    Don’t worry if you’re not a hosting expert. Most platforms make the whole reselling experience as easy as possible for newbies

  • It’s a great additional revenue stream for Digital businesses
    For example, if you’re already running your own web development business, it makes perfect sense to add web hosting under your own brand name. It’s the perfect complementary service that can net you some significant extra revenue

  • It won’t break the bank
    Compared to the levels of capital you need to start other businesses, the costs are relatively small when you look at reseller web hosting plans. You can easily scale your starting business to match both your budget and ambitions

Low Startup Reseller hosting business Costs


Venturing into a reseller hosting business presents an excellent opportunity to generate additional income while providing a crucial service. The beauty of this business model lies in its affordability and accessibility:

Minimal Initial Investment

You don't have to break the bank to set up your reseller hosting business. The need for purchasing and managing a costly dedicated server is eliminated as you can simply rent one from a hosting company. This significantly reduces the startup costs, making the venture highly economical.

Ease of Setup and Operation

Technical expertise is not a prerequisite for success in this business. Many hosting providers offer user-friendly platforms and detailed tutorials to guide beginners, further cutting down on setup complexities and costs.

However, it's important to keep in mind the competitive nature of the reseller hosting market. Thorough industry knowledge and a well-crafted marketing strategy are key to standing out and ensuring the successful growth of your business. Also, remember to invest time in branding since you won't have full control over your clients' hosting services.

The Benefits and Drawbacks of Reseller Hosting


Benefits

It’s easy to set up
There are dozens of hosting partners to choose from
Many web hosts do a lot of the hard work for you, including providing customer support
It can be a lucrative additional revenue stream
You can usually tailor a package to suit your targeted niche
Drawbacks

You don’t have full control over the back-end. For example, you’re reliant on your host partner for uptime
You can lose clients if your host partner performs poorly

Earnings from a Web Hosting Business


While it’s easy to get started with a web hosting business, don’t be fooled into thinking it’s going to be an easy source of passive income. You’ll still need to put plenty of hard work in to see decent returns.

Most of your customers will be paying in monthly installments based on the different reseller packages you provide, so the majority of resellers will find it fairly easy to budget given they know what to expect.

The income generated by a web hosting business depends on several factors, including the chosen pricing model, target market, and value-added services.

For example, offering a range of hosting packages such as a basic shared hosting plan at $10 per month, an advanced shared hosting plan at $20 per month, and a premium plan with dedicated resources for $40 per month can attract a diverse clientele. If you manage to secure 20 clients on the basic plan, 30 on the advanced plan, and 10 on the premium plan, your monthly revenue would amount to $1,400.

By incorporating additional services like domain registration, SSL certificates, or email hosting, you can further boost your earnings. It's important to continuously evaluate and adjust your pricing strategy, service offerings, and marketing efforts to maximize the income potential of your web hosting business.

Your challenge will be retaining customers and growing your user-base through top-notch service-based business skills.

To gain deeper insights and learn more about the income potential of running a web hosting business, we invite you to read our comprehensive article, "Web Hosting Business Income," available on our blog.

Building Your Reseller Hosting Brand


Developing a website

Developing a website

Logos and promotional materials

Logos and promotional materials

Use social media to advertise your services

Use social media to advertise your services

White label reseller hosting

White label reseller hosting

One of the most significant aspects of reseller hosting is developing your own brand and personality. This can help you differentiate yourself from competing hosting providers and provide your consumers with a one-of-a-kind experience. Creating your own brand can entail developing a reseller hosting website, producing logos and advertising materials, and promoting your services via social media. You might also think about offering white label reseller hosting to give your customers a fully branded hosting experience. Here are some pointers to help you create your brand:

  • Developing a website
    Developing a website is an excellent approach to display your services and attract new consumers. You can utilize the website to provide additional information about your hosting packages as well as customer service.
  • Logos and promotional materials
    Creating your own brand requires the creation of logos and promotional materials. This includes making business cards, flyers, and other promotional materials to help you stand out from the crowd.
  • Use social media to advertise your services
    Using social media to promote your services is an excellent approach to reach out to potential clients. You may promote your services and develop brand recognition by using social media sites such as Twitter, Facebook, and Instagram.
  • White label reseller hosting
    Providing white label reseller hosting to your customers is a terrific way to give them a fully branded hosting experience. This can help you differentiate yourself from competing hosting providers and provide your consumers with a one-of-a-kind experience.

Your Blueprint for Reselling Hosting Services


Your Blueprint for Reselling Hosting Services

You can find our full guide to resell hosting here, but it’s important to remember these three fundamentals:

  • Nail Your technical setup
    This is going to be the foundation of your business so it’s important to get right. This includes finding the right package to meet your needs

  • Don’t neglect your sales skills
    You’re an entrepreneur first and foremost. You’ll need to take into account that the majority of your time will be spent on sourcing new customers

  • Customer service is paramount to success
    Set high standards and make sure you always meet, or exceed expectations

Creating an Effective Billing System for Reseller Web Hosting


Creating an effective billing system for reseller web hosting is a must for any successful reseller web hosting business. Here are some of the key elements that should be incorporated into the system:

  • Automated billing - Automated billing solutions make billing quick and precise, increasing customer satisfaction.
  • Flexible payment options - Customers should have access to a range of payment options, ensuring that they may pay for their hosting services in a manner that is most convenient for them.
  • Transparent pricing - Simple pricing will enable clients to readily comprehend what they are being charged for.
  • Detailed invoices - To ensure that consumers understand exactly what they are being charged for, invoices should be specific and accurately reflect the services rendered.
  • User-friendly interface - Customers should have easy access to and control over their billing information thanks to a user-friendly billing system.

What Products and Services Will You Offer?


Once you’ve pinned down your niche, found the perfect host, and chosen your ideal package, you’ll need to decide what types of services you’re going to offer. These include:

  • Shared hosting
    Multiple clients will be using the same server racks and the same time, and this is the most basic, and cheapest, type of hosting. These are often used by companies looking for simplicity, and often come with helpful tools like drag-and-drop website builders. Your target audience will be bloggers and small bricks and mortar stores

  • Cloud server
    This is very similar to shared hosting, but is much easier to scale. This is great if you have a lot of clients that might have unpredictable spikes in web traffic that need to quickly scale up or down. This is a particularly popular choice with larger businesses

  • Virtual Private Server (VPS)
    A VPS offers your clients full control over the hosting experience. They can install any software they’d like to the server, and is an ideal choice for customers with a high degree of web development skills that want to do a lot of their own configuration. Large ecommerce stores and high-traffic sites will be looking for this option

  • Dedicated Server
    This is the most expensive option and involves a client getting a server completely to themselves. A good choice for customers that run power-intensive websites and don’t want to share space

As you can see, each type of service generally attracts a different type of customer base. You might want to offer a bit of everything, or zero in on your niche and provide just one type of hosting package.

Remember, you’re not completely restricted by the web hosting package you sign up to either. There’s an awful lot of flexibility available to you in any reselling business.

For example, you might want to sell affiliate products, such as WordPress plugins, or your own website themes for customers using your service too.

Benefits of a Reseller Web Hosting API


Reseller hosting with API lets users resell hosting services. Customers can buy web hosting services from your website and pay you, making it a terrific online business. A reseller web hosting API lets you automate customer management and reselling.

Reseller hosting with API is different from reseller hosting without API in that it provides an automated system for managing customers, services, and billing. With an API, you can customize the products and services you offer, easily keep track of customer service requests, and create an automated system for upselling and cross-selling. This makes it easier to manage customers and increase your revenue. Additionally, an API allows you to easily integrate with other systems and services, such as payment processors or marketing platforms. Here are the key benefits of a Reseller web hosting API:

  • Automated customer and service management system
  • Easy products and services customization
  • Expanded product offering
  • Automated system for billing and invoicing
  • Easily keeping track of customer service inquiries
  • Automated system for upselling and cross-selling

Domain Name System (DNS) in Reseller Hosting


Web hosting resellers must understand DNS. DNS lets Internet users type a domain name and find the website's server. It converts domain names into computer-readable IP addresses. This lets resellers give customers control over domain names, web hosting, and other services.

To set up and maintain their web hosting services correctly, resellers need to be familiar with the DNS system. They must be aware of the various kinds of DNS records, including A, MX, and CNAME records. Additionally, they must understand the fundamentals of DNS operation, including how to set up and maintain DNS records. This includes having a basic understanding of configuring name servers and creating DNS zones.

Resellers must also troubleshoot DNS issues like domain names not pointing to the correct IP address or name servers not responding.

Summary


If you’re prepared to put in a little hard work and are willing to dedicate the time, you can easily start a web hosting business from scratch. We’d especially recommend it to those that are already operating in the digital sphere, such as web developers, bloggers or social media influencers, as it can make the perfect addition to an already successful business.

You’ll definitely need to do your research though, and you should never jump into any new business venture without knowing exactly what you’re signing up for. However, with the web hosting industry in a period of seemingly never-ending growth, now is the perfect time to get started.

We’re always happy to help, and you can head on over to our reseller page to find out more.

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.

Do I need previous experience to use the reseller control panel?

Of course, having some prior experience with cPanel will go a long way, but our state-of-the-art system is designed to maximize ease of use while offering the full suite of configurability.

Plus, you’ve got the Verpex tech support team with you to help with any issues you or your customers are facing, so if you need any guidance on getting the most out of your reseller control panel, just let us know.

We’re on hand to help, Chat Now

How long does reseller hosting setup take?

Once you've ordered the desired reseller hosting plan, your package is created instantly and you'll receive a welcome email shortly after with your credentials to get started.

What do I get in a typical reseller package?

Most will offer a set number of cPanel accounts, bandwidth limits, customer control panel integration and a choice of server locations.

Can I expand my reseller plan as my business grows?

As your business grows, you need a hosting partner that offers the scalability you need to maintain uptime and your availability to new business.

The unlimited reseller plan, designed for the most comprehensive needs, comes with a maximum of 100 cPanel accounts, but should you need more than this over time, you can simply sign up for another unlimited membership to effectively double the number of accounts you can offer.

Whether or not you want this new account to be applied to the same server or an entirely different one is up to you.

Will my clients know I’m reselling?

No. If you use White label servers your customers will never be able to connect you to your host partner.

Are all reseller hosting plans cloud-based?

Our servers are in the cloud. So yes, all our reseller hosting plans are cloud-based

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

Do you offer control panel customization for resellers?

You can customize your control panel in whichever way you want, thanks to the white-label service we provide.

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

Is reseller hosting profitable?

In general, reseller hosting is very profitable. However, to be able to offset your initial cost, the hardest part will be getting your first few reseller clients.

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