10/8/2007 - What is Reseller Hosting?

Reseller Hosting Definition: In dictionary meaning Reseller means to sell again i.e. to sell a product or service to the public or to an end user, especially as an authorized dealer, making sure that one makes a considerable profit on sale.

Reseller Hosting - Just like a reseller of products, reseller web host buys a Web hosting package from a hosting company and tries to sell it independently to its customer after extracting his profit which is either in form of discount or commission that he/she gets from selling that account. Consider the example: The reseller purchases a package costing $100 at $90.therefore he tends to make $10 profit on selling the package to customers. And as the customer increases gradually the profit margin of reseller also increases.

One can also get money in form of commission by just recommending potential customers to hosting company. In this case if a customer gets into the contract with the hosting company then reseller tends to get regular commission until the customer is using the services. In most of the cases in order to expand their business, web-hosting companies try to outsource their services to resellers. This helps them not only to save marketing costs but also it enables them to pay more attention on business side of things.

Things that can be resold - There are many things to be resold, as a reseller one can decide what kinds of services to sell like either providing shared, dedicated or co-location web hosting or merchant accounts, store fronts etc. In addition to hosting one can also get benefited by offering some other hosting related services like domain names, search engines etc. However one must take care that he/she must keep patience, as can be in the beginning he/she is unable to sell these value added services but sooner or later they would be able to sell these services.

Factors determining the cost and resources required - The following are some of the factors that determine the cost and resources required for becoming a successful reseller: - In case one plans for earning commission by referring people to the hosting company using Internet, then not much cost is involved. In that case only an Internet readies PC and an Internet connection is required. - In case of small start-up also minimum amount of money and resources are required. One can buy a good reseller package from a hosting company by just paying them some money upfront. Here just one decent computer that can manage the accounts of customers having a better Internet connection can work. - For a beginner its always advisable not to invest much in the beginning but with the passage of time one can expand depending upon the customers by offering mere domain registration and with this one not only gets familiarity with the business but also gets good amount of profit. - As with more and more experience one can expand business and can buy all the server equipment required but then he/she has to take care for maintenance cost.

However there is another option also available i.e. leasing a server, as then cost tends to go down as one is just paying small amount for leasing instead of investing good amount in buying server but here too one has to bear the maintenance cost. In both of the above two cases one must also keep in mind to make sure that there is availability of multiple connections with the hosting company so that there are no complications afterwards on the verge of server down.

Advantages: The best advantage of being a reseller is that there is no requirement of lot of upfront investment. Also as per technical knowledge is concerned, there is no need of it. What is required is just Account management and Internet skills. However as with any business it would be worthwhile if one have some sales and marketing experience which will help in not only fetching customers but also will help in keeping them. The hosting company in most of the cases provides and maintains all the hardware and software itself. Therefore even no investment is required for hiring expensive IT staffs for providing support. By providing basic support and leaving the more technical issues to the parent company one can easily achieve support staff.

Disadvantages: In case of dependency on technical aspects on parent company sometimes support can got delayed. In this case one along with his/her own customer will be affected. In some case customers tend to run away on realizing the provider is just a reseller and not a real hosting company.

Tips for marketing In case one is starting out on a small scale then visiting message boards and posting services there can be regarded as a good idea. This is so because there are lots of potential customers with relatively small hosting needs who use to visit frequently message boards and outline their desired services there. Participating in several contests is also a great idea for bringing awareness and interest about the services. Techniques like online ad campaigns, signatures, and text links are also very beneficial. Once one secures both clients and experience can go to Google ad words or PPC search engines to avail maximum advantage. Thus it can be concluded from above that the best strategy would be to try out various combinations as discussed above and then choosing the one which is most beneficial.