Posted September 23rd, 2011
Article by George Di Falco
Joining the reseller hosting game could turn out to be a profitable endeavor. But before you embark, make sure you’re looking for the right Web host with the right tools to help you grow.
Resellers provide hosting as a third-party company, storing client’s websites on a parent Web host’s equipment. As the sites are “served” via the parent host’s high-speed lines, resellers can concentrate on sales and service while providing industry-standard hosting packages at a cut-rate price.
Yet a reseller’s success is only as good as the plan purchased. Resellers need to ensure their provider offers the right reseller package, the right features, and plenty of ways to make money. With help from a couple of insiders, TopHosts took a deep look at what to be aware of when shopping around for a reseller hosting plan.
Stephanie Rosendahl, CEO of Website Source, a leading hosting provider based in Austin, Texas, says reseller plans currently make up 30-40 percent of their sales. It’s a big part of their business that continues to do extremely well. She says potential resellers need to look beyond price and beyond bandwidth when choosing a company.
Look for that Up-Sale Edge
“Reselling is a very competitive market, so if you pick a reseller plan just based on price alone you’ll get lost in the crowd,” Rosendahl said. “Resellers need to be able to offer as many items as possible to their business clients.”
To stay strong and competitive, resellers need to have a solid supply of up-sale opportunities at their disposal. Up-sale items are additional features provided by a Web host, at no charge or at a reduced rate, for resellers to offer – or up-sale – to their clients, allowing them to make more profit. The more up-sale items available the better.
Website Source, for example, offers a wide-range of up-sale items – more than most in the industry according to Rosendahl – such as Miva Merchant, Postini, Site Studio, an Urchin eCommerce Module, a DOS protection suite, which is free, and more. Website Source also provides PCI compliance, eliminating the need for resellers to hire outside firms. Rosendahl says Website Source’s resellers utilize these items as marketing techniques to gain more upper-end business customers.
No Limits to Your Success
Paul Hughes is Business Manager at UKhost4u, a leader in Web hosting for the United Kingdom. Hughes says his company has seen a 20 percent increase in reseller accounts this year, and thinks it’s important for resellers to consider flexible plans that make life easy as success and clientele grows.
“I feel the resellers appreciate that we look at them as individuals and we customize to their requirements,” Hughes said. “The main difference (between us and others) is how the competition sets limits on their reseller packages.”
Hughes says UKhost4u understands the demands of a reseller can change fast, and that they should anticipate different business needs down the road. That’s why the company offers various upgrade/downgrade options in their packages that will not affect the uptime of resellers or their clients.
Compared to other providers, Hughes says they also set reseller accounts limits differently. They do not set any limits on the total amount of disk space and bandwidth the reseller has as a whole. Instead, they only limit the amount of disk space and bandwidth for each of the reseller’s client sub-accounts set up. It’s an element Hughes says customers appreciate, giving them the freedom to grow without limits.
More Than Just A Host
Rosendahl of Website Source says resellers need to look beyond just disk space, or else business might stagnate down the road. “There are a lot of cookie-cutter reseller hosting companies offering just plans and basically just disk space,” Rosendahl said. “We offer a lot of avenues for resellers to obtain more profit.”
Website Source offers an array of useful tools as part of their reseller hosting plans, such as a free marketing control panel, reseller website templates, a website editor, website statistics, billing systems and many other features. If you wish to offer private label hosting, Rosendahl says to look closely at the control panel offered and make sure it provides complete transparency, like Website Source’s Plesk 7 Control Panel.
Hughes of UKhost4u says to look out for hidden fees and to make sure you’re not getting charged for reseller-essentials, like customer and technical support. “Resellers should look at what is included and what is not,” he said. “There is a lot of reseller providers charging extra for database support, statistics and even a control panel for the reseller client.”
Check Out Their Rep
There’s a vast amount of reseller hosting plans out there, and a lot of money spent on advertising to attract the reseller crowd. But banking your business on a promising ad is a risky move. Rosendahl says word-of-mouth is one of the best ways to gauge a host, especially for resellers looking to sign up long term. In fact, Rosendahl says at least 60 percent of their reseller clients come to them because of “the good word” passed on from existing clients. “Most of our resellers come from word-of-mouth because we’ve been in business for nine years, and because we’ve earned a lot of trust among our customers,” Rosendahl said.
Hearing or reading first-hand about a particular reseller hosting plan is a good way to go. There’s a multitude of objective forums and networks on the Internet devoted to the reseller hosting market.
Hughes of UKhost4u agrees that resellers should never lock-in before establishing the true position of a company. After all, a reseller, their business, and all their clients are on the line if anything happens.
“With technology getting easier and hosting much more cost effective to offer there is a lot of people selling reseller accounts who have maybe only been in business a couple of months,” Hughes said. “We find a lot of people mentioning that their last host is now out of business and that all there data was lost.”
George Di Falco is contriburing editor for TopHosts.Com. He monitors the Web hosting industry and reports on a variety of technology related news. He also has numerous pieces published on business, marketing, the evnironment, and Canadian legislation.