Be Your Own ISP

About half of the nearly 6 million small businesses in the U.S. don’t have web sites and even among those who do, only half of them are e-commerce capable. At the same time, online sales are expected to reach 65-billion dollars this year, according to Jupiter Research, and the Internet population keeps growing. Some of you just perked up at this obvious example of demand meeting opportunity. The clear perception is that everybody is on the Internet, but the reality is quite different. So where do businesses without an online component turn, and what does all of this potentially mean for you?

Entrepreneurs across the country are providing businesses with Internet services like web hosting, e-commerce tools, and data storage with little more than a good PC and a reliable connection to the web. It’s called “reselling” and, in practice, is much like any other retail service available on the market. Large ISP’s sell their services to individuals at wholesale rates, and those entrepreneurs in turn, seek out customers of their own. Many resellers have little, if any, experience in programming, software development, server management, or other technical skills. That’s because they don’t have to.

Reselling works by letting each side focus on what it does best: a primary service provider finances, installs, and supports infrastructure like a data center, high-speed connectivity, and a technical call center while the reseller focuses on selling the services and providing personal care of accounts. It works for anyone who can follow the key rule of being a successful ISP – don’t fall on your S. Though the Internet is a global commodity, resellers thrive in local and regional environments because they can provide their customers with the face-to-face relationship that mega-corporations simply can’t offer.

In simplest terms, a reseller is a technology consultant who is knowledgeable about the digital tools that businesses can benefit from and is able to explain those benefits. The typical small business person doesn’t have time to research all the components of the network economy to determine which vendor is the best, whose offerings are the most cost-effective, or what changes are coming down the pike. However, any business owner understands the potential of tapping into a multi-billion dollar annual market; understands the value of being able to make sales round-the-clock without having to hire additional staff; and, understands the potential of reaching a global market for pennies a day.

It may be the cost involved that is most surprising for the reseller and the reseller’s customer. Prices will vary among hosting providers but a good reselling plan can be found for about the price of a good dinner. Keep in mind, this is a monthly cost but what other business comes with such low overhead, making for high profit margins. There is a lengthy list of services that providers will make available for re-sale; obviously, every customer is not going to want every service but let’s establish a revenue baseline of $30 per customer (and that’s being conservative). Multiply that by 50 customers and your monthly gross income is $1,500. Your only expense will be to the service provider, somewhere between $50 and $150 per month. The rest is profit with not a lot of time invested. You can use that time to find new customers.

Of course, the key to this business is the level of support customers can expect. As stated earlier, technology may be the brains of the industry, but service is the heart. Even if your best response at the moment is to say that a problem is being addressed, it is imperative that e-mails and phone calls be answered. Ultimately, it is tech support that determines the true worth of your service provider. Quality providers treat your customers as their customers because, in truth, that’s the case. A service provider is only successful when its resellers are successful. Mechanisms like 24/7 live support, toll-free communications, and an electronic trouble ticket system are vital links in ensuring that your customers get the care they are paying for.

For anyone who is knee-deep in bits and bytes, who can’t plan dinner without a PDA, and whose cell phone rings with the latest news headlines and stock quotes, it can be easy to forget that the Internet is still very young. Many businesses are adapting and incorporating the web but some hand-holding may be required. Again, the reseller is a consultant who is selling a service that will help the customer improve productivity and cut costs, make more money, or both. Read that line again, and notice the phrase “..a service that will help…” This is not a maybe; there is no coulda-woulda-shoulda. The proper utilization of technology tools will benefit any business. It’s up to the reseller as consultant to define what “proper” means to each prospect.

Consumers are going to spend money on the Internet. At the very least, they will turn to the Internet as a resource before deciding with whom to spend. That doesn’t mean that simply putting up a web site will, by itself, spell success. The site has to be treated as a new entity, requiring a plan of expectations and a marketing approach so potential customers can find it. Consulting in those decisions is what will separate the successful reseller from the pack.

If you’re only looking the potential income based on product demand, you will fail. The key to making money from reselling is in recurring revenue; it’s in the long-term customers who pay you month after month, and provide their own value by referring new business to you. Those are the customers who will take your call when you have a new product or service to offer. Keep that customer happy and you have predictable income. Multiply that by dozens, hundreds, even thousands of customers, and you have a very successful enterprise.

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