How to earn money from reselling web hosting

With the growth of the internet, the market for web hosting is ever increasing. However this does not mean that their is easy money to be made, there is a huge amount of competition in this sector from the huge multinationals to the small guy who sells space on his own server.

This does not mean however that there is no money to be made. Over the last 10 years one of my companies Quill Internet has built up a huge client base of over 2000 customers for its web hosting packages. This article gives you some of the secrets of running a successful hosting reseller company and how you can get yourself a big slice of the pie without having mega money to buy servers and infrastructure.

As a proviso to all of this, you do need to have some knowledge of how web hosting and domain names work and of course as I always say you need to be interested in the subject and be motivated to put in the time and effort needed to make it work. It will not magically happen overnight with no work, but if you do put in the time and follow some of these tips you can make good money.

The basic formula here is as the title to this article suggests Re-Selling.

What is reselling?

Reselling is where a web hosting company allows you to sell on their products under your own brand to your own customers. Generally you are in control of the price and what packages you choose to sell.

You are also in charge of setting up the hosting and managing your customers, billing, technical support and ensuring their quality of service is maintained.

How to of reselling web hosting

The reselling business is much like the Drop shipping business, however you do have to be a little more hands on in your management of your business. As the reseller you do not have to buy any hardware, Internet connections (apart from one to connect to your admin console) or any other heavy investments. The idea is that you are able to buy a companies  existing services at a discounted rate and then sell them on to your clients at a profit.

You are in control of the price that you sell on at, but remember that you must stay competitive. You will also need to keep in mind that there are already thousands of other people in this market, however if you find a good angle that you can exploit you will do well.

In the early days of my reselling, the angle was create basic packages without all the bells and whistles, why should your customers pay for something that they will never use? This then allowed them to select the exact facilities they wanted, statistics packages, front-page extensions, email virus scanning, spam control and the like.

When you have your angle, you will need to sign up for a reseller package with a hosting provider. I would advise sticking to the big names in the industry, that way it is easier for you to guarantee levels of services for your customers. I have listed some of the providers that I have personally used below.

Reseller providers

Over the years I have used a number of different providers, the current one and the one that I would recommend if you are in the UK is Fasthost. They are the larges provider in the UK and have a very simple web interface that allows you to setup and administer your hosting packages.

There are other providers including:

1&1
Fasthosts
123Reg
HostGator

Getting Started

Once you are signed up, you will be given access to a web portal or control panel, this allows you to access pricing details and thus you can start pricing up the packages and services that you are going to offer. Get to know both these prices and your way around the control panel. Once the orders start to come in you will need to be efficient, you will need to know where everything is and how to setup all the services you are going to offer. Learning on the fly is a bad thing and will only serve to keep customers waiting and potentially lead to mistakes.

You will need to develop yourself a website, if your design skills are not too hot, OSWD have free open source web designs that would suit a hosting company. Remember the golden rule that I always bang on about on this site, content is king, don’t simply copy and paste the content from your provider, write your own, write it in a language that your customers will understand, cut the techno babble.

How to Earn Money

Making money is what it is all about. This question is answered quite simply, make sure that you get to know all the prices of each individual product that you can provide, work out your other costs, such as the monthly reseller fee, costs of running your website and any marketing you might do, then build this in to come up with a price.

At Quill Internet I simply took several products, brought them all together and sell them as packages. The idea behind this is that these are simple packages or starting points that will cover most peoples needs, you can then increase the sales per customer by adding optional extras to the package if they want it, statistics packages are a good example of this.

You should also remember that once you have built up a customer base, this is a market that you have very easy, direct access to and to whom you can sell other related products or services, such as SEO, Search Engine submission or even broadband connections.

Marketing your service

At Quill Internet I was in the advantageous position that I already had a small but already bought in client base through several of my other businesses, it was here that I started, if you can do something similar it gives you a great head start, try a mail shot, email news letter or just get on the phone.

If you are really starting from scratch it will be harder for you but not impossible. Start local, target small local companies with your marketing, your strength here is the very fact that you are local, they will feel that you  are better able to support them. Make sure you present a friendly face, again don’t baffle them with science, find out what they want and give it to them, generally they don’t care about php, asp, .net, Apache, windows 2003 and the pros and cons to each. They want somewhere to host the website that someone has created for them. It is your job to give them something that will suit.

Once you have a few clients, build on them, continue your marketing on and off line and your business will grow.

Tips From Quill Internet 

The first and foremost tip that I can give from my experience is to make sure that you keep good records, and if possible a system similar to the one that I produced that manages your records for you, alerting you to re-bill customers, automatically checks that all sites are up and working, allows customers to login and create email accounts and review records and even order additional features from you.

It may seem all too simplistic to say that keeping on top of your records is the most important thing, but unless you know when to re-bill you will surely not make any money.

In terms of re-billing, I now use the professional version of Paypal that allows you to automate re-billing. Each of my customers pays through Paypal and unless the cancel their contact with Quill Internet they are automatically billed at the end of the cycle be that monthly or yearly.

Also make sure that you have an air tight set of terms and conditions, remember that you too have to satisfy the terms and conditions of your provider, therefore those should be built into your terms, and you should ensure that your customers are not breaking them as that could mean your reseller account being canceled. If your web hosting reseller provider does not allow adult content for example then you must ensure that all your customers adhere to this rule.

At Quill Internet I have over 2000 customers, you too can archive this given time and dedication. Imagine 2000 customers paying £4.99 per month… you do the math. Remember that is before you build in extras and other related products.

Useful links:

Web Hosting

Fasthosts Internet
1&1 web hosting
123Reg Domain name Registration

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