Reseller hosting is simple in principle, you buy disk space and bandwidth off a hosting company, resell to your own customers and reap the financial rewards. Of course, your business will only grow if you put the time, effort and money into advertising, attracting new customers and retaining them. The online business market has grown exponentially over the years and continues to do so, offering many opportunities. Attracting and maintaining long-term customers is your ultimate goal. Let’s take a look at some of the most common reseller hosting questions and provide you with advice and solutions.
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1. How does Reseller Hosting work?
Reseller hosting, also known as white label hosting, offers you the opportunity to resell hard drive space and bandwidth.
You pay for one package which you then split into various sub-accounts under your business name.
You will need to offer support to your customers while your host will offer support to you. At no point will your customers be contacted or offered additional services by your hosting company.
As long as you abide by your hosting company’s terms and conditions you will have a fairly free reign. To all intents and purposes you are seen as the host for your customers. You are their first and last point of call and they are your clients. Reseller hosting is a competitive industry but if you do the research, put in the effort and focus on your long-term income it can be extremely lucrative. Many entrepreneurs have built up successful reseller hosting businesses and sold them on for a significant profit.
2. Can you make a living from Reseller Hosting?
Perhaps the right question to ask is; do you want to make a living from reseller hosting to the online business market? Have you got the focus, the determination, the skills and the time to put into your business? The reseller hosting industry is littered with those who joined with great ideas and ambitious goals which did not quite go to plan. You are your own boss. You will be running your own business. Plus you can make a very comfortable living from reseller hosting services.
Over the years there has been a race to the bottom, cheap prices and often substandard services. Today the reseller hosting industry is very different.
You need to add value, you don’t necessarily need to be the cheapest but you need to be reliable, available and more knowledgeable about hosting than your customers.
If you’re expecting customers to fall into your lap you will be disappointed. Use all of your contacts, offer deals to your friends, all the while ensuring you can live up to your promises. So yes, you can make a living from reseller hosting and ultimately it is down to you.
3. What kind of support should you expect from your web hosting provider?
In reality you are only as good as the support and level of services offered by your web hosting provider. As a consequence, if you are driven purely and simply by money then you may end up with substandard support from your web hosting company. You need to ask yourself, how do some web hosting companies survive on wafer thin margins? How can they offer you the support and backup you require to provide a service to your customers?
The best companies will be able to offer you hosting support 24 hours a day, seven days a week and 365 days of the year.
Round-the-clock support is a vital element of any reseller hosting business. Downtime is costly, costly in terms of your short-term income and your long-term reputation. You get what you pay for in any industry and the web hosting sector is no different. Do your due diligence on the overall package not on the headline costs and watch your business grow.
4. How much freedom do you have over your hosting packages?
One of the main benefits of reseller hosting/white label hosting is the freedom this gives you. The freedom to set prices, to build packages and to react to changing trends (and the specific needs of your customers) is priceless. Taking a scattergun approach to your hosting packages and pricing is a disaster waiting to happen. Research your market, research your potential customers and build packages around their specific needs and requirements – not what you think they need.
Naming your hosting packages may seem irrelevant to some people but it makes your packages stand out.
Catch the attention of potential online business customers, appeal to their specific market and take advantage of the freedom you have. While there is a great degree of freedom over the details of your hosting packages, only promise what you can deliver, which is ultimately what your host company provides. This is your business, your livelihood and ultimately it is up to you to decide how you make yourself stand out.
5. Whose responsibility is it to collect hosting fees?
Hosting fees are obviously the lifeblood of any reseller business. They will fund your future expansion, your promotions and increase your long-term return on investment. It is your responsibility to collect fees, to monitor your customers and make your business work. The relationship with your hosting company is simple; they will bill you for your hard drive space and bandwidth on a monthly basis and provide support to you.
Thankfully, the vast majority of reseller hosting companies will offer you an array of packages including billing software.
This billing software allows you to automate the collection of hosting fees leaving you with as much time as possible to concentrate on growing your business. On occasion, you will come across missed payments and bad debts. Consider these on a customer by customer basis and contact them to see what issues they are having. Missing one payment is not necessarily the end of the world but if your customers continue to falter then you may need to cut them loose. By definition, white label hosting means it is “your name on the door” and you are the first point of call.
6. How do you attract new hosting customers?
There is no golden key to unlock the door to scores of new hosting customers. It takes time, you will need to plan a strategy, research your customers and target niche markets. You may decide to specialise in a specific type of business, offering not only hosting services but advice and additional knowledge. Promoting your hosting business on price alone may prove difficult because there are companies operating on wafer thin margins and high unpredictable volumes.
Make your business stand out from the rest, understand your customers, take an interest in their business and promote a degree of interaction.
You may have to put aside additional time to setup a customer’s account, it may not be profitable in the short term but always maintain one eye on the long term. Attracting new hosting customers is like planting a flower. If the roots are firm, the service is good then in the long term your relationship will blossom.
Be inventive; let your mind wander and try to step into the shoes of your next new customer. Deliver what you would expect at a price you would be willing to pay. You will need to spend money advertising, promoting your services and you may run at a loss in the short term. Even though you should carefully manage expenditure in the short term, think of advertising and promotion as an investment. A long-term investment in your successful hosting business.
