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Reseller overselling
Posted by newpacket, 11-25-2012, 08:12 AM One is giving master reseller 30GB space, and master reseller selling reseller-ship again, then the rest reseller selling hosting ... this 30 GB sold about 50 times Thinking madly, if one want to be a perfect reseller what should he/she do?
Posted by web host, 11-25-2012, 08:27 AM I am not sure, if you understand this but the 30 GB is the net space allocated to the master reseller which is shared amongst all of his clients (including his resellers, and their customers in turn as well). As much people tend to jump to conclusions on such topics, the fact is that its much like a normal WHM reseller with 30 GB space. The only catch is that the probability of the number of accounts hosted in the prior case would be a lot more. But that does not rule out the fact that a provider offering a WHM Reseller for 30 GB with unlimited cpanel accounts can ALSO have that many accounts as the same account with master rights. The important thing is not the disk space that you should consider, its the price that the providers is offering at, is what makes them a realistic and sustainable provider. For as long as the price-specs ratio is appropriate and sustainable, the reseller level is almost immaterial.
Posted by smartwebs, 11-25-2012, 08:33 AM The only catch is that the probability of the number of accounts hosted in the prior case would be a lot more. But that does not rule out the fact that a provider offering a WHM Reseller for 30 GB with unlimited cpanel accounts can ALSO have that many accounts as the same account with master rights.
Posted by Forward Web, 11-28-2012, 09:07 AM Personally, I have never been a fan of the whole "master" or Master/Super Alpha/Astronomical Reseller plans. Do to the nature of crowding which will occur with these types of set-ups (not to mention the difficulty in management), these types of services almost always end with a degraded level of service as the end product to the users who need it most (the individual shared web hosting account), which make for a terrible platform to resell on.
Posted by concerto49, 11-28-2012, 09:42 AM Agrees. Personally think 1 level of reseller is manageable but a whole set of layers is in a different league. It gets really messy with layers of overselling as said.
Posted by web host, 11-28-2012, 09:43 AM You are missing out on a very important point and that is; Both the account types (WHM Reseller and a Master/ Alpha/ Super Reseller) are bound by the same disk and bandwidth limits. This means that both the accounts will hold the exact same number of accounts for similar websites and content hosted. So if you are saying, that the later involves more risk, as the number of accounts hosted would be much higher then its only true from a realistic point. The chances of the Master/ Alpha/ Super having more cpanel accounts is much higher ... that is true. However, it is very much possible and within limits for the WHM account to have that many accounts as well. I am pretty sure 99.9% of hosting providers offer unlimited domains. So what are we talking about in here? Are you saying that if all your clients (I am not referring to you as a provider, but only referring to the context in general) have to use the entire 30 GB (which would mean massive number of accounts) then it would be trouble for you? And if yes then the whole reseller model with high disk space limits is seriously flawed or the whole idea severely relies on massive overselling. If on the contrary you (i mean a provider, not pointing at you in general) has no issues with a reseller, hosting 200 cpanel sites(ficticious number) on his 30 GB Reseller account, then I do not see why there should be a problem with the same 200 accounts being distributed across the Master/ Alpha/ Super account chain. If any of you want to take the discussion to CPU, RAM, Inodes usage etc, then remember all of this applies to both cases and there is NOTHING different about the Master/Alpha levels. Now furthermore, if you are saying the WHM Reseller will not have that many accounts then it simply implies that the WHM Reseller packages are more of a marketting ploy and that people should never buy Reseller accounts with anymore than 5 or 10 GB because they would not be able to use the whole disk space allocated eitherways (which is what can be concluded from what you said above). My point is simple, for as long as the packages are correctly setup and your business model does not rely on the fact that 'every customer will not use the allocated 30 GB', then you will not have any problems whatsoever. So if you consider a host selling 30 GB Disk space for $20 as a legit and sustainable host then the same host can also be classified legit and sustainable if they are offering an Alpha account for the same or slightly higher price, simply because of the fact that they both will hold the same number of accounts. Finally, its a win win situation for both the customers and the provider involved. From the customers perspective, he gets to sell resell accounts, something for which he would have had to otehrwise opt for a VPS and incur heavy prices. Not to forget the server management skills required and other hassles involved. Though I personally would prefer a VPS knowing that I would have more control over mys erver and hosted accounts, its a cost effective and budget solution for a lot of small scale hosting providers who wish to offer Reseller services keeping their monthly prices low. From the providers point the packages are also profittale as it yields more revenue over the same allocations.
Posted by concerto49, 11-28-2012, 09:48 AM The way I see it since I got quoted is that resellers should have limited space/bandwidth and not be allowed to overuse what is allocated. Something that can be set in WHMCS. This means you give a reseller 30GB HDD they have 30GB. It's no longer the providers' problem whatever they do. They have dedicated resources and can't oversell. That way it is safe. What is unsafe is when the reseller can go over their resource limit and the reseller sells this on to other resellers. The real problem with having a lot of clients due to reseller tiers is the lack of control. All hosts have terms and conditions. It becomes very hard to enforce and will lead to issues. Who chases up who?
Posted by web host, 11-28-2012, 10:00 AM You seem to be taking this discussion to a whole new level. I am pretty sure a large (rather very large) number of hosts including many of the top ones that can be listed would have overselling enabled. Now whether or not it is a good thing is a different discussion altogether but I still don't see why there should be a problem with overselling enabled for as long as its not done at the root level. A customer who is overselling twice of what is allocated when reaches his limits (due to the overselling) can always choose to upgrade. It's not that him overselling the space is causing an issue for the provider ... is it? Definitely not! Coming to the reseller tier part, I would presume your response was based on the idea of 'never ever used the reseller tier before'. Because if you did, you would have known that it's certainly not as complicated as you put it across when you take proper precautions, which you should as a server owner. The customer sitting at the highest level is solely accountable for any/all issues arising out of his account chain.
Posted by newpacket, 11-28-2012, 11:40 AM Thank you all, thats the point i got.
Posted by rv_irl, 12-01-2012, 06:44 AM The usual misconception is that the limiting factors are webspace/bandwidth. It's not. The day you offer master reseller is the day you have relinquished control over your servers. If you want to offer reseller hosting, do it the proper way and get a dedicated solution.
Posted by web host, 12-01-2012, 07:01 AM You still failed to justify how and why. Simply stating that something is non workable and a failed solution without at least backing your theory with proper justification is equivalent to a 1 sided discussion. We have been offering these solutions for over 3 years now and not for once, did we ever have any issues whatsoever (I am referring to issues arising solely due to the hierarchical concept). This thread is not about us or our services offered, so that was just my personal view point added. I have explained my stance in the above post and I would be glad if you could prove me wrong.
Posted by rv_irl, 12-01-2012, 07:10 AM With a reseller, you have 1 mutually shared resources amongst many, everyone contending to use the same resource which is limited. You have the person which owns the server selling space on that server, then you have resellers selling space on that server. All those customers are fighting to use the same resources. But then you add the master reseller layer which then blows everything out of control. Instead of having a controlled server, you now have resellers selling whatever amount of reseller accounts they want and those subresellers selling whatever amounts of hosting accounts they want. Essentially you're multiplying the effect with not just one layer, but with every subreseller sold. Putting this into perspective: A regular dedicated server owner would be able to gauge how many subaccounts a typical reseller will sell. Let's say on average 20 accounts each and the server is capable of handling 700 cPanel accounts. The dedicated server owner would sell about 25 resellers and then close off the server. You'd end up with about 500 accounts on the server and 200 for buffer. But in contrast, let's look at a master reseller in the same situation. That dedicated server owner sells 25 reseller accounts and they all create 20 accounts each. 500 accounts, and you still have the 200 account buffer. But then each of those resellers will sell reseller accounts. Let's say each reseller sells 10 reseller accounts. That's 250 reseller accounts. The host was being cautious and sold only 20 reseller account him/herself, but because s/he had master reseller enabled, they now have over 13x the amount they should have sold. Each of those reseller accounts sells 20 accounts. You end up with what was originally a safe and comfortable amount of 500 accounts, to now being 5,500 accounts combined. That's 5,500 accounts contending for the same resources. So you have 500 accounts on a regular server VS 5,500 accounts with master reseller enabled. Now the above is a valid and real possibility and something which does happen hence so many master resellers having a short life span or experiencing regular issues. Now of course even hosts that are not using master reseller can go out of business. That's an example of a badly managed host. However the chances of scripts being exploited, the server being blacklisted due to spam etc. are significantly raised with a master reseller. If you're a customer on a server like that, then how would you feel? Because you have been offering something for many years 'without a problem', does not mean a problem will not arise. In my opinion, if you've been offering it for many years, then essentially you have a ticking time bomb. It may take 2, 3, 4 or even 10 years for the true problems to start showing. The scale of which it is offered and the number of customers you have has a direct correlation as well.
Posted by web host, 12-01-2012, 08:35 AM What you said above is no different for a Master reseller as well. If 30 GB is allocated to a reseller, then that is the space allotted to the reseller and all of its shared cPanel accounts in total. The same applies to the Master package as well. If 30 GB is allotted to a Master package. The max limitation of all accounts (inclusive of the main master + all resellers under him + all shared accounts) would be 30 GB in total. If I have to summarize what you said above is that the number of cPanel accounts (all inclusive ) would be more in case of the Master package. Well, then what you said above is no different than what I already acknowledged and agreed to. I am not denying the fact that the Master package will get filled in much sooner, but instead my point is that it does not make any difference. I will explain this in more detail below. Are you saying that the reseller is NOT allowed to go more than 20, and that he would be violating any of your terms (I am not referring to you in certain), if he hosts 100 accounts all within the 30 GB limit? I have said this earlier as well, most hosting providers offer unlimited cPanel accounts. So either that is incorrect or its simply based on an overselling concept that a reseller MAY not realistically have 100 cPanel accounts. (P.S: Treat that 100 as a relatively higher number, if you think 100 is doable, then double it make it 200 for the purpose of this discussion). I have been very consistent on all my arguments on these topics so far, and that's the fact that when you are offering unlimited cPanel accounts, there is absolutely no difference within a Reseller and a Master account (unless your business seriously relies on the concept that a user may not essentially have significantly higher accounts). If the number of accounts hosted is a serious concern, why not advertise every reseller hosting with limited cPanel accounts instead of putting it as unlimited. The moment you say unlimited domains on a reseller account, there is NO DIFFERENCE left in a WHM Reseller and Master Reseller (when both are bound by the same hard limits) Fair enough, going by your example, are you saying that you (i mean not you again, but a provider in general) would be limiting every account to 20 cPanel only? Don't tell me that if a couple of them exceddd to 50 or 100, you do not have a problem, because that is a different concept and slightly points towards the idea of overselling (i.e. Not everyone will actually create 100 accounts). My question is you (again not you, but a provider in general) are offering unlimited cPanel accounts, so it is very much within limits for every customer to have 100 cPanel accounts instead. Now in your very same example, you now have 2000 accounts. (Could be even more). And the best part they are all within your terms. Before you answer this, make sure you do it in a way proving things to be different in case of the Master account. To begin with, before what you said above actually happens, in most cases, the Master reseller will run out of his limits, so in a way, he has to upgrade to the next available package or a VPS if the package assigned is the highest level for that hierarchy. So if that happens, it would mean double the revenue (or a significantly higher revenue to the provider), which can easily justify the increased count of accounts. I will try to be pessimistic in here and assume that he does not reach his hard limits even after all of the multiple chain of resellers and assume that the 250 accounts you mentioned are still within the defined hard limits of the master package. Even then The scenario is no different than what I explained above with respect to the WHM package. This could very well be the case with the WHM package as well. Just because this situation may not realistically happen with a reseller, does not mean its not possible. The reseller is also allowed to have 200 accounts each and having that many accounts is still within the policy limits of the provider. You still failed to explain how a reseller cannot have 200 accounts each, and if they do what section of a providers policy are they violating? If you are saying that you wanted 500 to 700 accounts on your server (again, not pointing at you), then a provider might as well make their WHM packages stating ... maximum 30 cPanel accounts per server. When you say unlimited domains the situation is no different than what it would be in case of the hierarchical structure. Just because most people MAY NOT use or probably MAY NOT have that many accounts does not prove a point. It simply concludes that the WHM Reseller packages are oversold and from a realistic point, a customer may not ever be able to sell that many accounts to even touch 50% of his hard limits. I have said this in my earlier post as well, either you (again not you, but a provider in general) agree and admit that there are limits to the WHM package as well in terms of number of accounts, or you admit that the whole idea of selling 30 GB, 50 GB and higher denomination accounts are seriously based on the concept that the customer (or rather every customer) will NOT reach their limits, and if they do, its trouble for the provider. I will re-iterate an important point that I quoted earlier: "For as long as the packages are correctly setup and your business model does not rely on the fact that 'every customer will not use the allocated 30 GB', then you will not have any problems whatsoever" We offer licenses and support to several hosting providers offering these services. I will conclude a few points, for what its worth: 1. It happens because of unrealistic and unsustainable pricing set at a certain level. 2. Unlimited is the evil: If a provider, a reseller, or a sub reseller is offering unlimited then consider the chain damaged from that point downwards. It certainly does not affect the upward chain. For example, a provider offers 30 GB master account to a client. If the client chooses to offer unlimited services downwards, he would either be in need of more disk space very soon, or would have to get rid of his clients using more space. In either case its the clients issue, the provider is not affected by this. 3. Increased support times: It is certainly obvious that the end user may land up with delayed support as his question/issue has to go all the way up to the root and then traverse back (which would include the providers resolution time, intermediate reseller accounts not transmitting the solution timely, etc), thereby delaying the whole process to quite an extent. But tahts a different discussion and not quite related at the moment. This is the only point, I would agree with you to quite an extent. Yes, as I said earlier, the likelihood of the Master account having more accounts than the Reseller account is certainly higher, which may lead to slightly increased abuse rates, but then there are pros and cons to each of them and this is probably one of the cons, but this is by far not something that is a serious concern to worry about. This I must say, I did burst out laughing. Are you saying that since we did not have an issue so far in 3 long years, we should be worrying about it in the coming years? I would say, even if there happens to be an odd issue (lets say a serious one) affecting a whole random node (to say the worst), would it still make any concluding differences? In any case it would still have nothing to do with the tiered architecture.
Posted by rv_irl, 12-01-2012, 08:59 AM web host, The issue is not whether potential problems exist with normal shared hosting. As I mentioned, a standard shared host can also experience similar issues. The point here is the additional risks you're adding by offering a master reseller. And as you agreed with, a master reseller does increase the potential for issues cropping up, more so than a standard environment. Adding additional risk, and adding additional risk for the sake of sales is not a way for a business to conduct itself. The additional functionality does not out weigh the additional risk you are adding. Yes that is what I am saying. Just because a problem has not presented itself now, is no indication that it won't present itself in the future. It's like saying just because an application hasn't been compromised in 3 years, it automatically means it will never be compromised. This isn't a good approach to take. Vulnerabilities could still exist, but just haven't been found yet.
Posted by web host, 12-01-2012, 09:31 AM IH-Rameen I have taken the pains to answer every accusation of yours and you still pick the lines which only point to the shortcomings. Well then you must consider the pros as well. You still fail to answer any of my questions above. I will summarize a few points once again for you. 1. Both the Master and WHM accounts can theoretically hold the same number of accounts (considering similar account types), when both are bound by unlimited domains and the same hard limits. So explain how the Master reseller business model is flawed in regards to the number of accounts. 2. You are talking about risks, but you fail to explain what those risks are. Don't talk about the abuse issues in here, as it directly relates to point number 1. The abuse issues can potentially be the same over the same number of accounts. Besides, even if there are significantly higher number of abuses, it does not make this whole idea a failed approach. 3. You iterate on risks being involved as well as script vulnerabilities whereas the fact is that its a tried and tested solution and when the server is secured properly, there is not enough reason to be worrying about. Issues arsing if any can also happen over a normal WHM account. The scenario is no different. Lets talk about a few positives now: 1. Cost effective solution for the end user to be able to offer Reseller accounts at a fraction of the cost of the VPS. 2. The client does not need to pay additional prices for server management or possess such skills himself. 3. No need of software license prices like cPanel, softaculous, RV skin, etc etc as they all share the same licenses. Furthermore think about the below situation as well: When you offer a VPS with 30 GB disk space, would you really be concerned with the number of domains he hosts on that VPS. Extending that same concept further, there is absolutely nothing wrong (and ofcourse in no way a failed solution) if you are offering the same 30 GB to a Master account at a relatively lower cost than the VPS. It's a complete win-win situation for both the provider and the end user when its executed properly.
Posted by rv_irl, 12-01-2012, 09:49 AM Because it is the short comings that are the issues here. The only 'pros' is that you can offer the selling of reseller accounts. There is no other pros. But you have numerous problems/short comings. I've already done that above -> http://www.webhostingtalk.com/showpo...1&postcount=12 I've already explained, in good detail what those risks here above. I really feel like we're running in circles here. Potentially what happens is one thing, but elevated risk of particular things happening is another. Take abuse for example, the risk of abuse issues with a master reseller are considerably higher. The facts and figures I provided in my previous host prove this. Potentially, any host can end up with thousands of accounts on a web server, but with a master reseller, the chances are significantly higher, quicker to achieve and easier to achieve. I don't believe this is an appropriate view, I strongly disagree. We don't operate like that. If there is risk involved in something, we don't need to expose our customers to those risks. The benefit of a master reseller is just money. The provider offering a master reseller does nothing but increase his/hers own sales, while at the same time, adding risk to their 'business'. Essentially -> Sales. "cost effective solution" -> 1 "client does not need to pay for additional prices" -> 2 "no need for software license prices" -> 3 It all points to financials. In any business, those prices are negligible as an initial outlay. I struggle to comprehend what serious business would compromise so much, just for a few dollars. That is a totally different scenario. A VPS is, for the most part, an isolated environment. Forgetting IO limitations for now, you can pack as much as you want on a VPS, and still it will only affect that VPS. Abuse issues, vulnerabilities - all isolated to that VPS. A master reseller still operates on a shared environment. I understand your business is based on the master reseller model and selling those licenses (based on your signature). And if that is working for you, then great. But that doesn't take away from the underlying issues I've mentioned above, it doesn't take away from the risks you're exposing yourself to. We can offer master reseller if we wanted to, and we'd probably make more money and more sales. But we refuse to do so. It's a calculated decision. We're more interested in protecting our customers than make a few dollars here and there, which probably, the elevated support prices would wipe out any additional money you make. Last edited by rv_irl; 12-01-2012 at 09:53 AM.
Posted by web host, 12-01-2012, 10:37 AM You keep saying shortcomings, but yet fail to explain what those shortcomings are. Care to explain something with proper justification or proof for once. For all we know, you have not even used the hierarchical solution and so far all I can say, is that your assumptions are not just fictitious but also based on myths that you have somehow acquired against such services. You certainly have not. What you have done within that post is simply giving incorrect information that the Master model will hold higher accounts than a normal WHM account does which I have proven wrong within my very next post here: http://www.webhostingtalk.com/showpo...2&postcount=13 You again fail to make a point. The abuse issues are again directly correlated to the hosted accounts and therefore cannot be considered valid ... this is because my basis of argument is that both the accounts will hold the same number of domains. The only way, you can make a valid point is if you say that a reseller is not allowed to host anymore than 30, 40 or an 'X' amount of reasonable domains that a business sees fit. I have said this several times by now and its more of a repetition that for as long as your business is not dependent on the fact that the user will not use all of your space allotted, there is NO DIFFERENCE AT ALL in whether you choose to offer a WHM Reseller or a Master Reseller. This sounds like a very lame argument especially given the fact that you don't just offer these services but have probably never even tried them to be able to make such a comment. I would gladly buy your point, if you can come up with something more logical than just saying that there are risks involved, more abuse, blah blah without actually proving how that would be. Whereas, I have at every point within this post, clearly shown you how similar a Master service is to a WHM Reseller in addition to the advantages that you get within the prior model. I am not trying to conclude that the hierarchical model is superior to the other one. You choose not to offer those services for reasons of your own and I am okay with that. All I am trying to say, is that you cannot just depreciate the hierarchical architecture, just because you have some pre conceived notions. In every post of mine within this thread I have logically justified how it is similar to the non hierarchical services. You are absolutely right. They all point to financials, but not just from the providers perspective, but also from the customers side. As a live example, if 10 people are to approach me for a solution to be able to sell reseller accounts, I would say approximately 50% would be going for a VPS (these would be the ones who essentially need root access to their VPS, and are looking for dedicated environments, or need more control over their servers and have relatively higher budget to be able to do so.) however, for the remaining 50% (approximately) who are low on their budget, do not need root access or self server management, I do not see why (and rather how), the Master solution is a failed approach. It caters to the exact needs of the client at a fraction of the prices and still giving them the ability to be able to sell reseller accounts. This is not essentially sales. It's a mutual benefit or rather catering to the exact need of the customer, rather than forcing him to go the VPS route. A Master reseller cannot be compared to a VPS. These are 2 different services and as I said in my above lines, it depends on the requirement of the customer. You cannot force a single solution for every customer. Each is great in its own place and has its own pros and cons. Its up to the end user to decide what he wants to opt for. Yes that is true, my business is based on this architecture, but that does not rule out the fact that I will still be suggesting a customer to go the VPS route if he can truly afford it or is looking for features which otherwise only a VPS can offer however, that does not undervalue the Master accounts and they are meant to cater to a different set of clientele. All you talk about is risks involved but you still fail to explain how a WHM Reseller provider within its policies is superior to the Master package. You sound like, the master reseller is something dreadful and that you are doing the good thing by protecting your customers from it. That's close to a slander in a way because you have probably never used/ offered those services and just because you choose not to offer them, you tend to defame it. You do not offer these services to your clients, that is fine and I respect your decision. But you cannot keep saying that the hierarchical structure is a fail or the very least without submitting proper evidence or justification behind it.
Posted by rv_irl, 12-01-2012, 10:45 AM There was a point where this discussion was interesting, but you keep running things in circles now. I keep explaining the same thing over and over again and you keep asking me to explain the same things all over again. If you want the answer, you can just read up the same things I posted. If your business is based around such a vulnerable and unstable architecture, then of course, you'll never going to see it from any other perspective, regardless of what is wrong or what is right. So I'm going to leave it there, and just agree to disagree.
Posted by web host, 12-01-2012, 11:10 AM Well honestly, the feeling is mutual. I actually feel the same as well about you. I have made detailed attempts to explain my stance, and yet I do not see a convincing point or even anything close to proving me wrong. Other than that, I would like to draw your attention to another concern. This was at one point an arguable and healthy discussion however, if you notice in all my posts, I have taken precautions to not put you in the corner, and to address this issue as a generic concern for a hosting provider by using phrases like "not referring to you as a provider, but only referring to the context in general", etc whereas, lets evaluate your choice of words in here: "But that doesn't take away from the underlying issues I've mentioned above, it doesn't take away from the risks you're exposing yourself to." "We're more interested in protecting our customers than make a few dollars here and there, which probably, the elevated support prices would wipe out any additional money you make." "your business is based around such a vulnerable and unstable architecture" There is a subtle difference between opining on something and assertively concluding on something. I never said/ expressed any opinion or comments about your business model.Throughout my conversation, I had been keeping this discussions generic however, if you look at your prior posts, you have been rather trying to make this a personal attack. Last edited by web host; 12-01-2012 at 11:15 AM.
Posted by rv_irl, 12-01-2012, 11:43 AM I'm sorry you feel that way. To a particular point, this was a good discussion. At no point was I trying to refer to your business. Apart from what I see in your signature, I actually don't know anything about it, as such, I wouldn't intend to refer your business, so please don't take what I say as anything regarding you specifically or your business . All the best,
Posted by web host, 12-01-2012, 12:00 PM Apology accepted. Rameen, personally I have nothing but high regards for you. You are one of the guys, I admire most on WHT. I have no hard feelings against you and I wish you good luck too.
Posted by rv_irl, 12-01-2012, 12:09 PM Thank you very much for the kind words! Likewise, no hard feelings - I'm always up for an engaging debate. It's what this community is all about and it's always a good thing to question & debate different products and services as it encourages improvement & innovation. Sometimes things can get heated, but that just shows people are passionate about they do and take a genuine interest in the services they offer.
Posted by web host, 12-01-2012, 12:36 PM An excellent point.
Posted by Sam Hambling, 12-02-2012, 01:42 AM This. Personally, I will be updating my costs to reflect this exact statement. I currently have 2 master reseller accounts but I am charging pittance for the shared hosting. In the long term this strategy will not be viable, if/when I need to upgrade to a vps or dedicated solution.
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