Although the economy is still in recovery mode, from all indications web hosting continues to perform well. Consider that the major hosting conferences – WebHostingDay and HostingCon were very well attended in the past year. This was despite the severe downturn in the economy. Many hosting providers are reporting less weakness in the hosting market than in many other markets such as durable goods or retail. As is often the case, a strong marketplace attracts new entrants wishing to profit from the booming growth. So it is with those who wish to enter the hosting marketplace and compete as hosting resellers.
So what are the basic options if you are interested in reselling web hosting? The Hosting News tapped into the expertise of the owners at reseller web hosting company 34SP.com to bring you this informative overview of the options in reseller web hosting.
Used Shared Accounts for Your Hosting Clients
Although not usually thought of as a ”reseller” option, it is often the case that a hosting reseller will simply purchase shared accounts from a web hosting provider and then use these individual accounts for customers. Clearly, the less expensive the shared hosting is – the more margin is left over for the reseller host. While this option is great for a few accounts, and can be managed well by a very organized reseller, there are a few drawbacks as well. Since each account has its own billing cycle and renewal dates, you will need to be very organized with regard to domain name and web hosting renewals. Further, although you may continue to buy more and more accounts over time, a shared option doesn’t normally give any price breaks for greater volume. A final organizational challenge is simply scale. Once you reach more than a few accounts, it is very difficult to log into and out of many dozens of accounts to assess the status of your reseller hosting business.
Reseller Hosting Accounts
The next step up in the food chain is to consider using a reseller hosting account. This is a web hosting account that is created specifically for web designers, web developers, and hosting resellers who wish to manage multiple accounts under one main login – and also has features to assist in account management. The benefits versus a shared account are numerous. A reseller hosting account is purchased for a flat fee – usually around $15-$50 per month. Once the flat fee is paid, a reseller is free to upload as many sites as they need – as long as the account specifications are not exceeded. That means that if you pay $25 per month for a reseller account and host just one website, your monthly costs for that website are $25. If you use the account for ten websites, the costs drop to just $2.50 per website. If you have fifty accounts under management, then each site is effectively hosted for only $0.50 per month. Just 50 cents per month for website hosting. If you then charge that customer a reasonable hosting fee of $10 per month – you will pocket $9.50 per month per account. That starts to add up!
Further, you can usually manage your accounts much easier via a reseller hosting account than via separate shared hosting accounts. For example, with one central login you can view all of your domains and websites under management. This makes renewals much easier to gauge and understand. Further, you can view the status of all accounts at a glance to determine if the accounts are live, and in good standing with regard to billing and domain renewals. Reseller hosting accounts also often provide software that helps in the billing and management of your separate customer accounts. This software (usually a combination of control panel and billing software) allows such activities with just a few keystrokes as: setting up new accounts, allocating resources between accounts, setting up monthly or annual billing cycles, and automating emails and communications with the customers. In brief, reseller hosting accounts are made to accommodate all the activities that a reseller undertakes from day to day to run their business.
VPS Hosting Accounts and Dedicated Servers
Virtual private servers or VPS accounts are another option for those who wish to resell web hosting services. Typically VPS hosting is a bit more complicated than reseller hosting accounts, and requires a knowledge of root level server access. This means that a VPS hosting account will require many activities to be ”programmed” by the user versus having preset options available. The benefits of using a virtual server for reselling hosting are: the server environment is completely isolated. This permits much greater security for your client sites. Additionally, a firewall can be set up to further isolate the server from any malicious activity. Resources are usually a bit less costly on a per unit basis for a virtual server as well. So the amount of processor power, disk space and bandwidth per dollar paid is greater than either a shared or reseller hosting arrangement. That means more profit for you.
One drawback of the VPS hosting model for resellers is in the area of support. While your hosting provider will undoubtedly support your virtual server, unless you sign up for a managed service (much more money) you will have to manage all of the sub-accounts on the server yourself. This means if there is a problem with an individual account – but your VPS is actually running perfectly – you may have trouble getting any sympathy or help from your hosting provider. Remember – a virtual server is much more complex than a shared or reseller hosting account. You may spent more time than you’d like learning and managing the server – rather than performing marketing and sales tasks for your business.
Dedicated servers share many of the same characteristics as VPS hosting accounts. Dedicated servers are yet a bit more costly, but yield the highest possible ration of resources per dollar paid. So if you are technically capable of running the server, you will in theory make more money from using a dedicated server. That is provided that you have enough customers to fill it up to capacity or near capacity.
Choose Reseller Hosting That’s Best for You
Whichever form of reseller hosting you choose, make sure that the technical expertise required and the resources delivery for dollars spent make sense for your situation. You can find a great list of quality reseller hosting companies right here at The Hosting News in our Reseller Hosting Showcase. Good luck in running your reseller web hosting operation!