The reasons why reseller hosting is popular as a business!
As a result of the pandemic, many businesses have been forced to look at moving to an e-commerce platform, or support remote working and working from home. At the same time, they are often under severe financial pressures and outsourcing their IT infrastructure to reduce capital expenditure is an attractive option.
There is a growing market for managed service providers who offer infrastructure and support services to end-users. However, supplying hosting services to multiple clients from your own infrastructure can be a costly business, to set up, maintain and operate. It can also take some time to get underway.
As the market consolidates, we are seeing the larger managed service providers overcome that particular problem by offering hosting services to reseller hosting businesses, especially reseller hosting services that can be resold under their own branding.
Making Money Reselling Web Hosting!
There are many companies that are moving from bricks and mortar outlets to web-based e-commerce entities. They need to find somewhere to host their basic business website and e-shop. If they are starting their e-commerce venture from scratch, they will need to invest in new infrastructure and develop their web presence.
That is where the reseller hosting business comes in. By having a hosting business host their online presence, they can fund the costs from operational expenditure rather than spending scarce and expensive capital expenditure.
The best Profit Margin is achieved by having the maximum number of satisfied clients in the correct hosting plan, at a hosting fee acceptable to them and to you. This means knowing the client’s needs and adding in some headroom for their growth or for adding new clients.
It comes back to the old question, how many users do you need to cover your operational costs, and make a decent profit? Given the current market, that can be a delicate balancing act.
What Is the Cost Of Reseller Hosting?
As with any business, there are fixed and variable direct and indirect costs. There are the fixed costs of supplying and managing the physical infrastructure supporting your reseller Hosting operation. This will include maintenance charges for hardware and software and any other regular infrastructure-related costs. Variable costs will include payroll costs, utilities and perhaps local and national taxation.
These of course must be offset by the income from reseller hosting in order to achieve a profit.
How Do I Build My Hosting Services?
The answer is marketing and by word of mouth from satisfied clients. This particular aspect could be the subject of a much larger marketing plan, but the bottom line is to remember that it costs, according to IBM, ten times as much to acquire a new customer than to retain an existing one. You need to keep your existing customers happy by providing high-quality services at an affordable, and market-related price.
One specific area to investigate in Reseller Hosting services is to identified-user customer needs and prepare hosting plans that meet those requirements, set at a price that allows the Reseller to make a profit. Flexibility in providing add-on services at a reasonable price is also key.
Marketing your Reseller Hosting services via Social Media is a no-brainer, and using platforms frequented by your target market to deliver your sales spiel is another positive aspect.
Setting your Reseller Hosting Prices?
This again could be the focus of a much larger article. Your prices should be market-related in that they don’t drive prospective resellers away, and sufficient for them to be able to run their business and meet their profit targets.
Provide the Best Support for your Customer
This is absolutely vital. A business will stand or fall by the quality of service it provides. Reseller Hosts must be able to provide great support services to their resellers to allow them to provide high-quality support to their customers. This might mean acting on their behalf from time to time.
As IBM has said, one negative report can undo the good of 10 positive ones. Today, with websites offering comparative critiques of Reseller Hosts, a bad review can be around the works in seconds.
The reseller hosting market is growing and all indications are that it will continue to do so. There is an opportunity for a large managed service provider, particularly with a VPS capability, to offer profitable reseller hosting services to smaller managed service providers.
The key is providing an attractive range of hosting plans and options at attractive prices to potential resellers, backed up by the highest quality support services.
We are very experienced at helping resellers choose the best VPS Hosting Plan, so please contact us if you would like an informal discussion on pricing and our VPS Hosting Plans.