Wanna Be a Hosting Reseller?

A hosting reseller purchases hosting services from a Web hosting provider then sells these services to its own customers for a profit.

This profit might take the form of a sales commission; for instance, 10 percent of all hosting services sold go to the reseller. In this case, the reseller acts as an agent for the hosting provider.

Alternatively, the reseller might purchase the services at wholesale rates and sell them at higher, retail rates. In this case, the reseller adds value in some way to justify the higher price. For instance, Web design services or Web site and e-mail setup services might be included.

Here are some of the most common reseller arrangements:

Affiliate arrangement. The reseller links from its Web site or e-mail messages to the Web host's site and receives credit for all leads originating from the link. The reseller provides very little in terms of added services and support, and essentially acts as a sales agent for the provider.

If you are more interested in making sales than in providing service or technical help, this might be the option for you.

Commissions. The reseller sells hosting services from its Web site and receives a commission for all hosting sales.

An example of this is a Web designer who resells hosting services as a side service to the design business.

Wholesale hosting. The reseller purchases hosting services at wholesale prices and sells the services to customers for a profit, often without informing customers that another company's services are being resold.

This is sometimes referred to as reselling under a private label. The reseller uses its own company's name rather than that of the hosting provider.

A reseller can choose to resell shared hosting services or rent a dedicated server.

Shared servers are less costly to rent than dedicated servers. A lower level of technical skill is needed because the host handles most server administration. This is why shared servers are usually the best choice for entry-level Web sites or for small businesses whose Web sites do not have high traffic levels.

If you plan to resell to such businesses, you should probably consider reselling shared server space.

You'll need more technical skill to run a dedicated server, and the initial rental cost will be higher. However, dedicated servers can offer the reseller a couple of important advantages over shared hosting arrangements.

Custom applications. Customizing can be particularly important if you cater to customers who require special applications, or if you cater to larger customers, who require a dedicated server to manage heavy traffic loads.

For instance, if one of your customers wants to run Oracle, but the host doesn't provide this product as a standard application, you can install it yourself on a dedicated server.

Profit margins. If you rent dedicated servers, you'll usually maintain the servers and provide customer service on your own. As a result, profit margins generally will be higher.

Note that dedicated servers usually require a higher monthly rental fee than shared servers, so it will only be more profitable if your customer base is sufficiently large to cover the increased costs of renting the server.

If you're just starting out and expect to serve a few small customers while building your customer base, you might be better off using a shared arrangement to begin with.

Read other web hosting Articles