Good idea? Bad idea? Reseller hosting as a "business model"

[maxxwebb]

hey folks,

i'm thinking about upgrading my hosting package to RESELLER.
i'm curious about the following:

1) anyone here making a few bucks reselling hosting on their account?
i mean just selling 10 or 15 accounts per year. nothing BIG.

2) do you make it CLEAR that you are a reseller, and that your abilities and limitations are only as good as the ACTUAL HOST?

3) what is the upside (easy to do, no maintenance etc.)

4) what is the downside (downtime, any support required etc.)

here's the business model part:

i have a nice web hosting .com - gets a few type-ins per day, plus i can drive some traffic to it. i am thinking about "putting up a page" that has an outstanding ANNUAL web hosting offer on it - like $11.99 per YEAR for a basic account. instead of automation, i would provide an e-mail and paypal link, and basically once a customer pays, they e-mail me, and i manually set the account up in cPanel.

is this a st*pid idea???
does it have potential???
are there "lots" of others doing something similar now???

THANKS.
mike

 

[user-7256]

I can't answer the questions 1-4, but I can tell you that if you're going to expect few sales, then don't bother automating: it just creates more room for problems when for a few extra minutes of your time, it could be avoided. So, the manual thing every once in a while is probably a good idea.

It has potential, like everything else, but the hosting market is very, very saturated. Good luck ... you're going to need some ingenuity.

 

[maxxwebb]

agreed.

i guess what i am thinking is:

offer a "blow out kinda deal"
only accept certain sites (add my own TOS on top of my host's TOS)
if i pick up a customer or 2 per year, it will help offset my total hosting costs and...
a few new customers per year eventually adds up to 10 or 15 - enough to pay for
most of my entire hosting costs.

** especially where i have a pretty decent hosting (.com) - might as well try to
put it to some use. :gl:

anyone here doing something similar?

THANKS AGAIN.

 

[CrazyTech]

I'd never recommend anyone to do hosting on the side, even as just a reseller. It's a time intensive business and it will catch up to you sooner or later. You have to consider the overhead and it includes things like support software, billing software, etc. For example, not many people are going to comfortable with unsecured email as the only alternative to place an order and contact support.

 

[maxxwebb]

I'd never recommend anyone to do hosting on the side, even as just a reseller. It's a time intensive business and it will catch up to you sooner or later. You have to consider the overhead and it includes things like support software, billing software, etc. For example, not many people are going to comfortable with unsecured email as the only alternative to place an order and contact support.

thanks crazy,

i think that makes sense.
maybe i could dev. a simple page about hosting and put up a few affiliates or something - keep it simple, and stick to my CORE BUSINESS ACTIVITIES.

mike

 

[CrazyTech]

That'd be the better way to go (IMHO). There are some solid reseller programs out there that you can use that give a pretty fair cut. Just Google it.

 

[cdboard]

get yourself that reseller account and go for it.

no need to advertise that you're a reseller. just provide the service you advertise.


you might get more customers with a monthly payment option (in addition to annual). paypal subscriptions are handy for customer and host.


billing software: paypal

support software: email


since you're shooting for 15 customers, email for support will be fine.

 

[Talkhost]

It's a very difficult market...
I used to run talkhost.com as a webhosting, domain registration business, and I operated my own servers.. but competition in the hosting business gets tougher every day.. so I eventually decided to pull out altogether..
I was spending too much time running servers, and not enough time monetizing domains..
Best to just purchase hosting from a reputable provider nowadays.. It is not expensive anymore.

 

[cdboard]

I was spending too much time running servers, and not enough time monetizing domains..
Best to just purchase hosting from a reputable provider nowadays.. It is not expensive anymore.

as a reseller, he won't be running servers. and inexpensive reseller accounts can be found.

some folks use a reseller account just to host their own websites.

 

[Talkhost]

as a reseller, he won't be running servers. and inexpensive reseller accounts can be found.

some folks use a reseller account just to host their own websites.

That's true, I misread the question.
Reseller accounts are just as cheap as a normal small hosting account was this time last year.. and no hassle of maintaining the server.

 

[thepurplecow]

I have a 2 reseller accounts which I just use to host my own sites. But as an add-on to my main site (www.biospherical.net), I'm going to create a small hosting company - mainly to benefit BioSpherical.

 

[MutoGen]

That's true, I misread the question.
Reseller accounts are just as cheap as a normal small hosting account was this time last year.. and no hassle of maintaining the server.

Yes agree with you. Most of companies provide inhouse support. As for me - reselling is the best way to start hosting business. I suggest you have a look at resellerzoom.com, ahosting.biz, hostgator.com - they are good companies, providing reseller package to start with.
Good luck

 

[Zwolf]

One major recommendation that I can make is which ever company you choose you should make sure that you investigate them as much as possible. Search Google and see if you can find any customer reviews on the company. As a reseller your service is only as good as the company with whom you sign up as a reseller with.

We have our own web hosting company, but have our own servers. When we started out we had tried the reseller thing, and learned the hard way about some of these companies. One company we signed up with had major downtime, we experimented with them for 1 month, and found that the server uptime was around 68% which is terrible. If you sign up with the wrong company, you will be swamped with support issues as to why the server is down, or why ftp does not work ect. Basically all things that are out of your control. If the parent company has poor service, you will find yourself in a real awkward situation.

Some of the larger companies such as listed above: HostGator ect have pretty good reputations. They may cost a little more, but you can at least count on less downtime & less headaches overall.

Another option which would put you in more control is to sign up for a VPS account. This gives you a lot more control.

The hosting industry is not an easy field by any stretch of the imagination. Competition is fierce. Many hosting companies seriously oversell their packages. You will find companies offering any where from 100 MB of disk space for $10 per month, to companies who offer insane amounts of disk space such as 3000 GB for like $5.00 per month (as hard as that is to believe, I just came across such a company.) Getting a pricing formula is also somewhat difficult to determine, because you need to weigh a lot of factors into your pricing.

If you come up with a unique business plan, you have a much better chance of doing well in the web hosting business. Hope that helps. Lots of luck.