There are dozens of different online businesses you can start from the comfort of your own home. One online business that isn’t covered a lot is reseller hosting.
With the right niche and dedication, you can turn reseller hosting services into a very profitable business.
If you’ve been thinking about starting your own reseller hosting business, then this post is for you.
Below we look at what reseller hosting is, what it takes to run a reseller business, as well as a step by step plan to get your reseller hosting business off the ground.
What Is Reseller Hosting?
First, we’ll start with what reseller hosting actually is. With reseller hosting services, you’re not running or managing any of the hosting server’s yourself. Instead, you’re renting out these servers, branding them with your own company, and then selling that server space to customers.
Since everything is white label, it’s as if you’re running your own web hosting services company. Your customers will never know that it isn’t you.
You’ll be able to create your own hosting plans, take payments, offer additional features like email and website backups, and more.
Requirements for Running a Reseller Hosting Business
Web hosting is a very competitive market. It’s dominated by larger hosts that generally compete on price. However, running your own hosting company can be profitable if it’s done the right way.
At the core, you’ll be renting customers a certain amount of storage space for a certain amount of time. Your profit will come in the difference between the cost of renting servers and the price you’re charging your customers.
If you’ve been thinking about starting your own hosting business, then there are a few things you’ll need to take into account. Namely, your motivations for starting a hosting business, your technical skills, and business and marketing know-how.
Keep in mind that starting a hosting business is going to take a lot of work, so your motivations are going to need to be clear from the start. Since you’re essentially running a service business, it’s going to require a lot of work on your end, so you’ll need a clear goal that you’re working towards to sustain you during difficult times.
Next, are your existing technical skills. If you’re starting a reseller hosting business completely solo, then you’re going to need some basic technical skills. You don’t need to be a programmer yourself, but it helps to have a deep understanding of how servers work, and basic web design and development skills.
The reseller host you decide to work with might actually handle things like customer support, maintenance, and more. But, you’ll still need to have some marketing and business skills to handle things like online marketing, payment processing, and more.
Understanding The Reseller Hosting Landscape
As a reseller host, you won’t be competing with the top dogs of the hosting space. These companies are simply too large and they can offer price points and other competitive advantages that you won’t be able to offer. However, these are the companies that you’ll probably be getting your reseller hosting from.
Instead, your goal should be to create a more niche hosting company. Think the small to medium-sized business space. Hosting companies in this space can still have hundreds of servers and thousands of customers, but you might actually be able to compete with them.
The one thing that’ll help improve your chances of success is finding a niche or a small target market. This will help you stand out in a crowded field and give yourself a fighting chance of success to earn money.
Your niche focus, or unique offering, along with extensive marketing will help build brand recognition and position yourself as the go-to host for a specific niche.
The Niche Market Approach
Being a leader in a niche market is going to be how you’ll find customers as a reseller. There are a variety of benefits to choosing a niche. Here are some of the most common:
- You make it easier to market and speak to the deep needs of your niche.
- You can keep costs low by not having to meet the needs of everyone.
- You’ll have a lower level of competition since you’re not directly competing with massive hosting companies.
- You can provide better customer service as you’ll understand the unique needs of your market.
Even though success will be easier by focusing on a specific niche, there are still a few downsides that you’ll want to be aware of as well. For example, by only focusing on a specific niche you’re limiting how much your reseller hosting company can grow. However, this can be remedied by slowing expanding out to related niches once you’re effectively dominating the niche you’ve started in.
Pros of Reseller Hosting
As a business. reseller hosting has a lot of advantages. Here are some of the biggest benefits that reseller hosting offers you:
- It doesn’t take much effort. Signing up for a reseller account is easy, and comes equipped with bundled tools like automated billing and support.
- It doesn’t take a ton of technical knowledge. For a technology oriented business, the bar is actually pretty low.
- Support can be included. Some parent hosts will offer support, which can help to free up your time to focus on other areas of your business.
- Can be a simple add-on service. If you have an existing digital business or design agency, you can easily add hosting as an additional service, helping you add a recurring revenue stream to your business.
Cons of Reseller Hosting
Still, reseller hosting isn’t perfect. Here are a few drawbacks to starting a reseller hosting business:
- Services are limited by parent host. Ultimately, all of your offerings and services will be limited by your parent host, so make sure you choose a hosting company with solid servers and a variety of add-on services.
- It’s difficult to compete on price. Since you’re going to be reselling hosting, you won’t be able to offer the incredibly cheap prices that most hosts are able to offer. So, you’ll need to figure out other differentiating factors. Perhaps you can include hosting setup for free or offer outstanding customer service.
- You don’t have full server control. Since you don’t own the servers you’re renting, you’ll never have full server control. So, make sure you choose a host that places value on their server hardware components.
Features Included With Reseller Hosting
The host you decide to partner with will influence the reseller hosting features you have access to and can pass on to your customers. Here are some of the most common features that the best reseller hosting providers will offer:
- White-label hosting. This lets you brand your own hosting company, while still using the hosting services of a parent company, like HostGator.
- Plan customization. This allows you to manage your own plans and even customize and bring together certain features for a unique hosting offering.
- Bundled features. This allows you to offer other features like email hosting, domain management, cPanel access, website builders, and more.
- High-quality servers. By choosing a high-quality host you can offer a variety of different hosting types, and a range of bandwidth and storage.
How to Make Money With Reseller Hosting
Now that you have a better understanding of how reseller hosting works as a business. It’s time to dive into how you can make money with reseller hosting.
Here’s a basic process that you can follow to get started with your own reseller hosting business:
1. Do Your Research
By now you should have a few ideas in mind for the hosting niche you’re going to focus on. For example, maybe you’re going to become the go-to host in your local area? Or, you’re going to focus on a specific niche like plumbers or lawyers? Or, maybe you’re just going to offer web hosting as an add-on service for your digital agency?
Whatever your focus, make sure you have some sort of direction before you jump into the rest of the steps below.
Then, you’re going to want to dive deeper into your niche to get an idea of the competitive landscape. Try to find at least five different competitors who will either be offering a similar service or are targeting the same niche as you. As you look through their website’s look for the following information:
- Their core offerings. For example, the type of hosting they offer, or additional services and features.
- Their price point. How much are they charging for hosting? What about other services? Can you compete on price, or do you need to take the premium angle?
- Their marketing methods. You can gauge this by seeing if they maintain a blog, social media accounts, or run paid advertising. Run their sites through a tool like SEMRush or Ahrefs to see if they’re picking up any organic traffic, or are bidding for any keywords.
Doing this for a handful of competitors will give you a solid understanding of your niche and what you need to do to compete.
2. Determine Your Core Offerings
Your research above will help you determine what style of hosting, and add-on features, you’ll need to offer your customers. With reseller hosting you’ll generally have a few different types of hosting you’ll be able to offer, as well as bundled features offered by your parent hosting company.
Depending on the parent hosting company you’re using, you might be able to offer additional services like domain name management, email features, and more. In some cases, you might be able to stand out in your niche by being a one-stop-shop for all of your customer’s needs.
3. Get Your Business in Order
To actually start your reseller hosting business there are a few things you’re going to need in place. Here are three things you’ll need to have in place before you launch your reseller hosting business:
A Reseller That Matches Your Desired Offerings
In your research above you determined the types of services and products you want to offer your customers. Now, it’s time to find a parent hosting company that matches up with these services.
For example, are you just going to offer shared hosting, or will you include VPS, cloud, and dedicated hosting as well? Do you want to offer different packages of each hosting type? Do you want a reseller that provides support for hosting? Do you want to be able to offer domain name management as well?
Once you’ve figured out your needs it’s time to find a reseller that aligns with these.
A Reseller Hosting Package
Once you’ve found the host you want to work with it’s time to sign up for reseller hosting. The process will differ depending on the host you’re working with. But, here’s how it works if you’re signing up for a reseller account here at HostGator.
- Navigate to the hosting reseller page.
- Sign up for a reseller account.
- Purchase hosting and service credits.
- Sign up customers to your server.
A Company Website
Now it’s time to create your website. As a hosting reseller, your website is incredibly important.
It needs to speak directly to your target market, be easy to use, contain useful and helpful information related to your products and services, and have readily accessible support.
Depending on your parent host you might be able to integrate payment processing and additional features into your site, like live chat, support materials, and more.
3. Offer Stellar Customer Support
As a smaller host, the support you’re able to provide will make or break your company. Providing stellar customer support is a great way to make your company stand out. In fact, a large group of satisfied customers can end up being your best advertising.
Customer support starts the very moment someone lands on your website. If they have any questions about your services they should be able to reach an agent via live chat right away. Your website should be very easy to use and seamlessly guide your visitors through the process of signing up for web hosting services.
Once your customers have signed up for web hosting they should receive a welcome email and be able to easily set up their hosting account. If they have any questions they should be able to reach a representative through email, live chat, or phone, whenever the need arises.
Some hosting parent companies will include support as part of their reseller packages. This means that they’ll handle any and all support requests. You can either let them handle all of the support requests, supplement their support with your own team, or let them handle technical support, while you handle all other requests.
The approach you take doesn’t matter as much as providing outstanding support to your customers.
4. Set Up Marketing
By focusing on a specific niche it’ll be much easier for you to focus your marketing efforts. Instead of marketing to anyone and everyone (which rarely works), you’ll be focused on reaching a small segment of a larger market.
First, determine how you’re going to reach these customers. For example, will you create a blog to rank for organic search terms? Do you have a budget for search engine and social media advertising? Will you run an affiliate campaign with non-competitive sites in your niche send leads your way?
Figure out the approach you’re going to take and create measurable campaigns. If your budget is lower, just starting out consider taking more organic approaches until you have the funds to invest in paid marketing and advertising campaigns.
5. Profit and Scale
By now you should be ready to launch your reseller hosting program.You’ve found your niche, done market research, nailed your service offerings, found a rock-solid hosting reseller, built your website, and started marketing your services.
Once you’ve acquired your first few customers you should start to break even. This all depends on the price you’re paying for reseller hosting, how much you’re selling your web hosting packages for and your initial startup costs. After you’ve recouped your initial expenses you can start to reinvest these back into your business to attract even more customers and start to turn a profit.
One of the beautiful things about offering reseller hosting is that your target audience will have a high customer lifetime value. As long as you provide a stellar service they’ll stick with you for a very long time. This allows you to pay more up front for customer acquisition, as every new customer is worth a lot to your business.
Hopefully, you have a better understanding of what reseller hosting is, and how you can start your very own reseller hosting business. By choosing a niche and placing a focus on delighting your customers you’ll make it that much easier to actually earn money with a reseller hosting program.
Get started with HostGator reseller and web hosting services today.