The Pros and Cons of Running a Reseller Hosting Business

Everyone who becomes an entrepreneur will likely go through a stage of not knowing where to start. During this period, you’ll try many different business models – whether reseller hosting, dropshipping, content creation, or something else. I had to ensure this learning curve, and you almost certainly will, too.

One of the most important things you can do when looking at which business to start is to consider the pros and cons. You will have both, regardless of the path you choose, and it’s vital that you’re willing to deal with the downsides and not just think of what could go well.

If you’re considering starting a reseller hosting business, we’ll help you do that today. Here are the biggest benefits and drawbacks of running a reseller hosting business. We’ll also identify how you can minimize the potential negatives.

The Pros of Running a Reseller Hosting Business

If you’re willing to learn how to resell hosting and stick with this business model for the long term, you could be on your way to a rewarding life. Here are some of the biggest upsides of hosting websites for clients and starting a reseller hosting business.

You Don’t Need a Physical Office

One of the biggest reasons I quit my full-time job was that I didn’t want to be tied to a city that I did not like living in. For this reason, it was a non-negotiable that I started an online business. If you’re in the same position as I was and want location independence, a reseller hosting business might be worth considering.

Since all of your work will be online, you can choose an environment in which you’re the most productive. Perhaps you’ll want to create a nice home office or join a coworking space and meet many awesome entrepreneurs/freelancers. You can work from your hometown or take your laptop while traveling.

Another advantage of not needing a physical office is that you don’t have to pay rent for one if you don’t want to. Even if you get a coworking space membership, it’ll likely be much less expensive than a full office space.

Reseller Hosting Businesses Are Cheaper to Set Up

I got tired of people telling me that starting a business requires a lot of startup capital because this isn’t universally the case. If you wanted to develop some comprehensive software tool, then yes – you would need deep pockets or venture capital. However, many online businesses – including reseller hosting – aren’t very expensive to start.

You will need to pay for some things, such as choosing a reseller hosting partner. Moreover, you should consider making some key reseller hosting hires. But at the same time, your costs will still typically be lower than they would for a traditional brick-and-mortar business.

Because you won’t need to spend as much money on the set-up phase as other businesses, you’re under less pressure to make significant profits immediately. As a result, you can take your time to build an excellent service that will be sustainable for many years.

Leveraging Technical Expertise

This will require choosing the right hosting reseller, but starting your own business in this field gives you a huge opportunity to leverage technical expertise. For example, the best hosting resellers will have knowledgeable customer support teams and account managers; you can use their knowledge to learn more about how everything works.

Another benefit of leveraging technical expertise is that it will be much easier to solve any problems that potentially arise. I can tell you from personal experience that working with any company whose team doesn’t know much about the product is frustrating, and your customers would think the same if you didn’t take this seriously.

By leveraging technical expertise, you can also spot other flaws in your business quickly and patch these. As a result, you’ll be more empowered to continue providing significant value to your customers.

You’ll Learn Several Useful Skills

Becoming self-employed is one of the best things you can do for personal development. If you decide that reseller hosting is worth it, you’ll become a better-rounded individual and open several doors that you never knew existed otherwise.

You probably already know that you’ll learn a lot about web hosting. But there are plenty of other helpful skills you'll pick up, such as becoming an excellent marketer. You can continue reaping the benefits of this in your reseller hosting business, and they’ll also be transferable to other business models you try in the future.

As a reseller hosting business owner, you’ll also learn how to analyze market trends and what constitutes a high-performing website. Besides the technical skills, you’ll become more resilient and drastically improve your time management. Since you’ll work with others, you’ll likely improve your social skills and become more empathetic.

Predict How Much Money You’ll Make Each Month

I don’t think that starting a business is as risky as some people think, and honestly, the rewards outweigh any of these. Nonetheless, mitigating the potential pitfalls as much as possible is a good idea. One way to do this is to pick a business model with recurring revenue, which is precisely what reseller hosting offers.

When hosting websites for clients, they’ll likely pay you a set fee each month. As a result, you can predict your income more easily. Doing so gives you more flexibility in setting up your business to continue paying the bills and investing in providing a better service.

Since you’ll also know the rough amount you’re earning each month, you will also have greater peace of mind. Because of this, you can think more creatively.

You Can Grow Into a Bigger Business When You’re Comfortable

Scalability isn’t an absolute necessity when starting a business, but if you’re the type of person who’s intrigued by endless growth, you’ll want to think about ways to build upon your success from the beginning. Reseller hosting is scalable in the sense that you can add more clients to your roster, but the benefits go beyond that.

Do you remember when I said earlier that you’ll learn lots of new related skills? The good news is that many of these are also in demand, and as a result, you can potentially increase your earnings through different avenues.

For example, if you get good at marketing, you can start offering marketing services to other businesses. This is a great way to generate some extra income while you’re in the building phase, and it allows you to enhance your core skills for the dream business even further.

The Cons of Running a Reseller Hosting Business

While running a reseller hosting business has numerous advantages, it won’t always be perfect. To ensure that you make the best possible decision, I’ll now outline some of the cons to consider. If you decide that these are worthwhile, it’s very much worth drafting a business plan.

You Should Have a Strong Understanding of Website Hosting

Some business models don’t require much knowledge to get started quickly. For example, while affiliate marketing with WordPress requires subject matter expertise, you don’t need to think about technical aspects that much. Yes, it still takes time, but you just need to choose a topic you’re interested in to begin with.

Reseller hosting, on the other hand, requires specific technical expertise and an understanding of website hosting. If you don’t have this, you will struggle to stand out, and the learning curve will be even more daunting. Because of these factors, reseller hosting is also harder to start than some online business models.

Besides knowing about website hosting, it’s also very important that you actually like how the entire ecosystem works. Getting your business off the ground will take time, and having an active interest will help you stick with things in the long run.

You Could Have Limited Flexibility

While you have complete location flexibility, you will have to rely on a hosting reseller for your service to operate at the best possible level. For this reason, you must choose wisely; not doing so is one of many reseller hosting mistakes you must avoid. Having to migrate later will not only cost you more money than you’d like, but it’ll also disrupt all of your clients’ operations.

It’s worth considering what to look for in the hosting reseller you partner with. Consider server availability, branding, and other aspects that may impact your service – such as scalability.

You Need to Know How to Differentiate Yourself

When people say that a market is “too saturated”, I think it’s a good thing because it means a demand for your services exists. There’s always room for new movers in each industry, and if you’re excellent at what you do, you’ll eventually become one of the most prominent names.

This, however, also presents a big challenge.

Because reseller hosting is competitive, and you’ll be up against businesses with decades of experience, you must know how to differentiate yourself. You can try choosing a specific industry or client type; start by thinking about your unique expertise and where you have an unfair advantage compared to others.

You should also just try lots of different things and see what sticks. Make sure that your unique selling points (USPs) are clear in your marketing when you know the direction you want to choose.

Potential Technical Issues

Even when you’ve established your presence and start generating a healthy income, you cannot rest on your laurels as a reseller hosting business owner. Several technical issues, such as server outages, can arise; tackling these as soon as they do is vital for longevity.

Understanding the possible technical issues that may arise and acting on these starts with the hosting partner you choose. Pick one with multiple servers and, ideally, one with a track record of being good at scaling resources.

Before marketing your business, you should also try each hosting reseller with your own businesses to see how they fare. If you don’t like them, it’s worth looking elsewhere to maximize customer satisfaction.

Summary

Running a reseller hosting business is about more than just finding and signing up clients. You need to understand the pros and cons and decide whether you still wish to move forward with this business model. If you have a genuine interest in web hosting and are willing to face the potential problems head-on, you can enjoy significant success.

Frequently Asked Questions

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.

How does white-label reseller hosting benefit my business?

White-label reseller hosting provides complete control over your hosting packages. You can customize features, pricing, and services to meet your clients' needs while building your brand identity. It also allows you to start a hosting business without significant upfront investment in hardware and software.

How do I make money with a reseller hosting business?

Identify your target audience and understand how you can meet their needs; this might require some experimentation. Once you’ve identified your unique selling points (USPs), market your services with high-quality content and by engaging with your community.

How long does it take to grow a reseller hosting business?

Expect growing any business to take at least a few years, regardless of how much you know. Setting longer timescales will make it easier to stay consistent and allow you to build sustainably.