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Would love your opinion!: Is it worth becoming a reseller?
| Posted by snowbirdtech, 04-28-2014, 04:59 PM |
| Right now my business is hosting only sites I or my partner works with directly. My partner wants me to check out reseller hosting because he says it's passive income. I think that's a gross exaggeration...
So if you've a reseller I'd love to hear your opinions on my top three concerns. Here they are:
The profit margin will be slim after advertising and it will take us time to get a positive ROI.It will create more work for our clerical team and we'll have to offer support, which really means more work for our technical people too.It could be a security risk to our existing sites.
I guess these are my main three concerns and I would be very GRATEFUL to hear your feedback if you've been doing reselling for a while.
Last edited by snowbirdtech; 04-28-2014 at 05:02 PM.
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| Posted by HostWithLove_Cody, 04-28-2014, 05:13 PM |
| It is true that there will be some additional work involved, in the sense that you may have to assist them in particular queries such as the setting up of emails or any other configurations. You don't necessary need to be proficient in understanding these as your hosting provider can provide those answers for you.
There are some hosting providers which offer end-user support, meaning they can log into your billing system to answer your clients' queries on your behalf, but you would want to be wary about the choice of provider as they will be dealing directly with your clients. Any poor responses from them would directly reflect badly on you. Otherwise if you are worried about that, you can just act as the middleman between your clients and your hosting provider, which allows you to filter or rephrase a particular response to your client. Going with the later option is definitely more work.
I wouldn't say that you need to spend more on advertising. Afterall you have a direct source of clients who will be interested in having a hosting package for their websites. I feel that offering a hosting account alongside any services you were offering your clients, such as website designing or developing, will boost your sales if anything. They might find it more convenient as they don't have to look for a hosting provider after your work is finalized and submitted to them.
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| Posted by Fidde, 04-28-2014, 05:21 PM |
| Number 3 is the opposite. Its ofter safer because you have different accounts for each site with access only to the users own files. (Safer assuming all sites are under the same account / folder etc.)
2. Yes. You will most likely have to answer more support questions.
1. It can be very difficult when starting up. If you have clients that "are waiting to be setup" you will probably get some small income immediately as reseller accounts are cheep. If you don't need a billing solution or are happy with a free one (they are good too) you might only need to pay between $5-$20 / month depending on how many clients you got etc. if you can afford to pay $5-$20 give it a shoot see if its something for you
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| Posted by snowbirdtech, 04-29-2014, 05:12 AM |
| Thanks for the feedback
Clarification: We do already provide hosting for some of the sites we work, but they are on our own dedicated server. So I worry about security because the sites we host sit on one server and we did have a break in on our server and two were affected. I worry that bringing sites we're not directly managing can affect the other sites - even if we switch to a reseller's account.
Great suggestions on how to get the business started
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| Posted by DWS2006, 04-29-2014, 07:36 AM |
| This depends on how well the host server has been hardened. You could always run two environments, a VPS or dedicated server for your design/dev clients and a reseller account for everyone else. This would give you the control where you need it but lessen the admin overhead that coincides with offering hosting to the general public.
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| Posted by PremiumHost, 04-29-2014, 11:17 PM |
| Do you want to buy reseller hosting package for business expansion to selling hosting service or migrate all websites from dedicated server over?
There is likely more security risks with the more sites you host on a shared server.
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| Posted by rcchang, 04-30-2014, 04:44 AM |
| QUOTE] 1. The profit margin will be slim after advertising and it will take us time to get a positive ROI.
[QUOTE]
Not necessarily. You could get good, free advertising such as forums/wht etc, or you could just grow on Word of Mouth. You don't need to necessarily purchase banners.
If you go with shared hosting you might have to do some work, yes. You could also sell unmanaged VPSs, and you don't really need to offer support. Actually the average user doesn't open as many tickets as you think.
Use fraudrecord/maxmind, it'll decrease the security risk.
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| Posted by snowbirdtech, 05-04-2014, 06:59 AM |
| I think what we wanted to do was to get another dedicated server, move the sites that we don't maintain over to the dedicated server and then offer clients who don't want maintenance packages space.
So then we can offer a secure space (for those we update) and a less secure place (for those we've worked with, but don't maintain).
Does this sound reasonable? We just want to start small as an add-on to our business, which does more general website management, marketing, UI/UX.
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| Posted by SupportGuide, 05-05-2014, 05:00 PM |
| Reseller hosting can be great, especially if you have other services you can upsell them on. It may be a cheap way to get customers in the door, which you can upsell later on your more expensive services.
If you add hosting, you should consider how it fits into your other products and services. There may be some opportunities where there is synergy between what you currently offer and your new hosting offers.
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| Posted by JixHost, 05-06-2014, 08:25 AM |
| Go with a reseller account. Its certainly worth it and you never know where it could lead.
I was just a person that made websites for clients. Somehow I eventually stopped making websites and just supported existing and new clients that would come in on their own. I woke up one morning and realized that I became a web host.
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| Posted by AcclaimedHost Alan, 05-06-2014, 09:29 AM |
| Yes absolutely! Reseller accounts were my way of getting into the industry, and, honestly, I don't know where I would be if it weren't for web hosting. On a personal level, it has given me a sense of self and purpose. There's also something incredibly rewarding about waking up each day working for yourself and getting an email with the title "WHMCS New Order Notification".
To be "good" at the business, I'd recommend starting out with a reseller account that offers end user support because it will remove the learning curve. That will allow your web host to provide the support that your clients need, and you'll learn how to answer tickets and diagnose problems. Then, when you're ready, you can make the transition to a VPS or dedicated server.
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| Posted by Donn, 05-06-2014, 10:48 AM |
| A reseller would account would be A good choice, you will just have to find a reliable hosting provider. From my experience, A dedicated server Is not always a good choice if you aren't Well experienced on managing servers.
You don't have to start marketing just because you switched to reseller, Stick with your own clients and that will save you a lotIt's not much work managing your clients If you have a reliable hosting provider.From my point of view, It's safer for you than having a dedicated server. Given the fact that you already had a breach once and you don't seem experienced on managing servers.
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| Posted by Atlanical-Mike, 05-06-2014, 11:44 AM |
| It depends on your business plan, how much capital your business has, and how much you're willing to invest in it together. You need to remember the hosting industry is not as easy to get customers these days with all the unlimited hosts and fly by night hosts.
If your in it for a quick buck, no you better stay out of it. If you have a passion with hosting and want to expand to a bigger audience, yes why not give it a try.
Yes profit margin is slim for about the first few years depending on your marketing and how good you are at selling yourself. You will need good costs and packages and grow a good reputation.
If you have a good set-up and secured the best you can, you will have hardly any technical tickets. So it depends how you look at it really. When I owned a brand for hosting we hardly got any tickets just sales enquires. We only had 143 customers though.
Again this depends how much time and money you invest in security, you could use CloudLinux with the CageFS which will lock each account in it's own environment which is securer than non having it or using BetterLinux.
You could hire a Security Management company like Rack911 to check your server for you.
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| Posted by gotlivechat, 05-06-2014, 11:49 AM |
| Reselling usually makes it easier to 'enter' the business (of selling whatever it is you're offering) with minimal cost. As you start to increase business, it can often make sense to do it 'in-house' after awhile as the profit margin is usually better.
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| Posted by jrianto, 05-06-2014, 11:25 PM |
| Another option is to use one of those turn-key reselling solution such as offered by ResellerClub or GoDaddy turn-key reseller hosting.
They handle everything, you basically just mark up their base price and keep the difference.
If you are targeting local market, they won't care as long as the site is up all the time.
If you are targeting shared hosting customer on the internet (non local) and are thinking of doing web hosting service the traditional way (managing it your own), it would be tough to get customers.
And and to just do that on the side, I don't think it would worth your time and investment, unless you and your partner are ready to go full time doing web hosting as part of your core business.
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| Posted by Team ResellerClub, 05-07-2014, 03:07 AM |
| Hello!
As several members have pointed out already, Reseller Hosting would be a good next step to your business. The profit margins, at the start might be slim if you have to advertise, but you can actually capitalize on your current user base, word of mouth and organic traffic to expand your business.
In terms of workload on your clerical team, most established providers handle support and you will probably have to play only a marketing and branding role in the business. <>
The security risk posed by this step would be miniscule if you opted straight-up for a reseller hosting offering, but we would be in a better position to comment depending on the exact model of delineation you envisage and the choice of product you wish to purchase.
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Last edited by Postbox; 05-07-2014 at 09:08 PM.
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