What are the pros and cons of reselling web hosting?
As the demand for web hosting continues to grow, there is a corresponding rise in the number of entrepreneurs who are getting into the game as web hosting resellers. Many of these individuals are already providing other web-related services, such as graphic design, website design, web maintenance, web development or website security. By branching out into reselling web hosting, they realize another ongoing source of revenue.
The business model itself is simple and intuitive, but that does not mean that expanding a web-centric business to include a web hosting reseller component doesn’t come with its own drawbacks as well as benefits. In this post, learn the main pros and cons of reselling web hosting and decide for yourself if this may be a good addition to your business.
Web Hosting Resale Defined
In the past, many entrepreneurs have literally stumbled into the web hosting resale business. They may have contracted with a web hosting provider to reserve a certain amount of bandwidth that is for their use only. Later, they realized they didn’t need all of that space, and they decided to resell some of it to existing or new clients.
Today, the process is often more deliberate, in that an entrepreneur will take out a certain amount of space and parcel it out to clients as a way to earn ongoing income. Either way, what you are doing is essentially reserving a certain amount of online space and bandwidth to use as you prefer, and then reselling a portion of that space/bandwidth to others for their use.
Pros of Reselling Web Hosting
One of the main pros of becoming a web hosting reseller is simply the additional revenue. Whether you sell hosting packages by the month or annually, you have extra revenue coming in on a regular basis that you don’t really need to work to earn.
But while this is undoubtedly the most compelling pro, there are many other enticing benefits of reselling web hosting to consider as well.
Here are some of the main pros that come with reselling web hosting:
- You keep your own web hosting costs low. By offsetting your own web expenses through the income you earn as reselling web hosting, you pay less each month to operate your business.
- You can also sell domain name registrations. Because you can sell a potentially unlimited number of domain names, you can earn even some additional extra income.
- It represents one of the easier ways to go into business for yourself. If you are a budding or existing entrepreneur and you want to add to your independent income stream, reselling web hosting is an easy way to do it. This is an especially great option if you are still working part-time or full-time for an employer and are trying to build up a nest egg and transition into being self-employed full time.
Cons of Reselling Web Hosting
There are also a number of drawbacks to reselling web hosting that deserve consideration before you speed on ahead and open your doors for business. For example, as with any business that is heavily dependent on developing good customer and vendor relations, you will have to have good people skills or be willing to work hard to develop these.
Here are some of the main cons that come with reselling web hosting:
- You will be “on call” all the time, even on weekends and holidays. Web hosting can be a demanding industry, especially in times when natural disasters, mechanical failures, power outages or other unknowns may impact the reliability of the services you are offering. In these cases, you can expect to pull some very long hours until the crisis passes!
- You will rely on your own web hosting provider as much as your customers rely on you. The more time you spend researching the web hosting provider you will work with to launch your own web hosting resale business, the better off you will be over the long run. You will rely on them for help in providing customer support to your own clients, so you want them to be responsive!
You also want a provider that is utterly reliable, honest and available, because that is what your customers will demand from you. As well, the process of changing web hosts will become that much more complex as you add more clients, so you want to be as sure as you can be that you have found the right fit the first time.
- You will need to learn how to sell. Some web host resellers have modest ambitions, such as to simply provide web hosting for their existing client base. But if you aspire to really grow your web hosting resale business, you will soon discover it is a crowded marketplace out there with lots of options.
This is good news in that the web hosting resale business is “hot” right now, but it also means you will have to learn how to both differentiate your business from your competitors and then also sell what makes you stand out from the pack to customers. This includes gathering customer testimonials, marketing your business to new prospects, doing the necessary behind-the-scenes administrative work and overseeing your business as it grows.
While reselling web hosting is not a business you should leap into (unless you are already set up with a waiting list of eager clients who want you to provide this service), it definitely has many advantages worth considering.
By taking the time up front to ensure you have selected the right web hosting provider to partner with, contracted for sufficient space and bandwidth to make a profit reselling it, have the time to really attend to customer service and have the expertise to handle issues as they arise, you may just find that reselling web hosting is the perfect new career choice for you!