There is a seemingly endless choice of web hosting services on the Internet. Many people do not realize that some of the services presented are actually resellers of services that are rented from larger web hosting companies.

Many savvy entrepreneurs have figured out that it is less expensive to lease the server, or some space on the server, from a large hosting company and use it to sell to their own customers in smaller pieces.

In today’s tight economy, it’s always good to have more than one source of income. If done properly, becoming a reseller for a web hosting company can become an additional revenue stream while continuing your day job. If things go well and you put some effort into it, in a few months your ’side business’ or hobby may earn more money (with less stress) than your day job. At that point, it could be time to start thinking about getting serious about web hosting as a full time job.

First things first, though. Assuming you have no knowledge of reseller hosting at all, we’ll take a look at some of the basics. From there we’ll look at some of the different reseller hosting options that are available. At the end of this article, you should not only know about how reseller hosting works, but also how it can be used as a profitable source of revenue for yourself.

Hosting – The Basics

Web hosting can be a complex, yet simple process. To have a website connected to the World Wide Web, you need a computer setup as a server that’s connected to the Internet to hold your files. This web server then shows the files as web pages when people visit the website via a web browser like Internet Explorer or Firefox. Instead of people having to keep these servers in their own homes or businesses, web hosts allow them to lease space on a server in a central data center, possibly located halfway around the planet.

A web host data center is basically a facility that’s been designed for one thing – keeping the servers up and running on the Internet. They will have security, fire prevention, and back-up methods installed, making the whole process easier. If everyone who wanted a website had to take care of these things, it wouldn’t be very cost effective or manageable. This is largely why web hosting has become known as a profitable, stable business over the years.

Even with the benefits of economies of scale, it’s still expensive to keep web host companies up and running. The larger a web hosting company is, though, the cheaper it’s going to be for them to offer server space to customers. As with any company, attracting new clients is an important part of business. Businesses employ a lot of methods to attract new customers – from advertising to promotions to social media and more.

In the early days of the Internet, the idea of affiliate marketing – paying people who bring you new customers, became very popular. For web hosting companies wanting to expand, this was an inexpensive and easily implemented way to build their customer base. That’s a topic we will explore further in another article. The smarter companies also reached out to Internet publishers and offered them money for every customer they referred, sometimes with mixed results. They soon realized there were other more profitable ways they could increase their customer base and revenue. This was how Reseller Hosting came to be.

Reseller Hosting

With reseller hosting, basically, certain web hosts will offer a ‘reseller’ account on their servers for a reduced rental rate, or less than you can “resell” it for. Essentially this allows you to rent portions of the space to others for a little extra money, making a profit. The big web hosting company is satisfied because you’re paying for their server space, even if it is a little less than they would earn by selling to your customers themselves. Everybody wins in this situation.

Reseller hosting can be a way for people to start up a steady second stream of income while keeping their regular job. Reseller hosting won’t make you a millionaire overnight (or even in a few months), but there are very few things in life that will. If you keep this in mind, though, reseller hosting is a great opportunity for you to begin to explore ways of making money online.

The business model is fairly simple – purchase web hosting and resell it for more money. There are additional services that can be added to enhance the offerings, such as domain name registration, web design, and script installation services.

However, the main work takes place in attracting clients. With so many other companies and people selling web hosting on the Internet, you have to make a plan to identify a target market and figure out ways to be more successful than your competitors. Getting new clients should become a priority, once you purchase your first reseller account with a web hosting company.

Getting Web Hosting Clients

You may want to start with people you know in your local area. If you ask around, there may be a lot of people you know who have a website or want a website. Starting with familiar people can be advantageous in building your client list of those who host on one of your web servers. Approaching people you know first is a time honored, smart sales technique.

From there, the sky is the limit. If you’re serious about reseller hosting, you’ll also want to look into two ways of bringing in new clients – marketing and advertising. Both are very similar, but they attack the same problem from two different angles. You’ll want to make sure you account for both areas in any plans you have, in order to grow and become more successful.

For the marketing side of things, you’ll want to make sure you have something that makes the hosting you offer a little different. There will be a lot of other web hosting resellers out there, so you really need something to set yourself apart from the rest. This is a classic marketing strategy. It is important to be creative. As long as you make sure you charge enough to make a profit, you might include items or extras that other web hosting resellers do not – such as an hour of your time every month.

On the advertising side of things, you’ll want to make sure you’re bringing in enough money to cover the cost of advertising your hosting services. Whether it’s through Google Adwords, another PPC (Pay Per Click) option, or banner advertising on a industry news publisher’s website, it is essential to budget money into your plan to buy advertising to attract new business. You’ll hopefully be able to maintain customers once you get them, but you’ll always want to be aware of ways to gain new customers.

Keeping Web Hosting Clients

Keeping satisfied paying clients is really an important aspect of any successful reseller hosting business. It goes along with the idea of marketing yourself as being a little different than all of the other web hosting resellers on the Internet. Maybe your marketing angle is that you go the extra mile to make your customers happy – so they stay with your service. Another tactic is to offer something unique to a specific niche market.

However, you want to make sure you don’t go overboard, making promises that you can’t keep. This is especially important as your hosting service becomes popular and you begin to get a lot of customers that all demand your attention. Technical support can quickly eat up time and money if not properly managed.

If you start small though, it is possible to make sure the clients you already have are always happy. This creates powerful word-of-mouth advertising which will help you attract more customers through a grassroots network. In this way, you’ll be able to gradually add more clients at less cost, which will bring in more money each month through service to newer people that may require more attention.

Reseller Growing Pains

If you follow the above advice, there may come a time when you can’t keep up with all of your customers. At this point you have some choices to make. You can start to scale back, by not accepting new business. If you’ve made it this far, though, you’re obviously doing something right. With just a little more effort, you might be able to reach a level that would let you quit your day job and concentrate on your web hosting business full time.

Deciding when you should hire other people and grow is an important decision that shouldn’t be taken lightly. The main thing you’ll want to take into consideration is that you should bring in more money (revenue) than you pay out in expenses. This seems like a very basic thing, but a lot of people try to expand too fast and end up not being able to handle their current customer base, let alone grow. There are many examples today of companies that have overextended themselves, anticipating continuous growth, only to come up short and having to take drastic measures to stay solvent.
If you’re smart about it, and come up with a plan for the future, it’s possible to grow your web host reseller business enough to support you. Once you reach that point, the rewards of all your hard work will really become evident.

Reap the Rewards

If all goes well, you should be able to build your business to the point that you have a steady profit every month, even after hiring people and paying all expenses. The lower you keep expenses in the beginning and early stages of your reseller plans, the better off you’re going to be in the long run.
Distinguishing yourself from all of the web hosting competition out there can be difficult, but if you take time to do some research, plan ahead, and keep with it, you’re highly likely to create something that works. And when you do, you’ll find yourself with a successful company that makes you money continuously.

Is Reseller Hosting for You?

Being a reseller for a web hosting company and reselling server space isn’t for everyone. If you’re willing to work hard, make sure you provide great customer service, and are even just a little innovative, you’re bound to succeed as a web hosting reseller. If you keep doing well, you might one day grow to the point when you can buy a data center of your own. Once you get to that level, you might even start selling reseller hosting packages to other people!

It isn’t easy, but reselling web hosting can be a steady source of income month after month if you know a little about web servers and how to keep them running. Even if you don’t, the knowledge needed to purchase server space to resell isn’t too difficult to learn. All it takes is a little time as well as a willingness to persevere and gain practical experience.

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