If you’ve been looking for a way to make some additional cash by recommending products and services, then you’ve no doubt come across the term resellers and affiliates.
At their core, these share many similarities, but the mechanics required for each are very different.
If you’re a reseller, then you’re re-selling a service under your own brand name, but don’t have to worry about the fulfillment of that service. As an affiliate, you’re sending customers to businesses in exchange for a commission of the sale.
If that’s a little confusing, don’t worry.
Below we take an in-depth look at both reseller and affiliate programs, so you can decide which route you want to take in our reseller vs affiliate showdown.
What is a Reseller?
As a reseller, you’re more or less operating a traditional business.
You purchase certain products or services and then sell them as if they were your own. Typically, you’re able to buy these at a discount and sell them at a higher price to make a profit.
Let’s look at an example of how reseller hosting works:
Say you want to start your own web hosting company. If you were to start completely from scratch you’d have to purchase physical servers, secure them in some form of datacenter, install server software, hire IT staff, build a website to sell hosting, hire customer support staff, and that’s just the beginning.
Not only would your startup costs be extremely high, but there are so many moving pieces you have to get right, and that’s even before you get your first customer.
But, if you sign up to be a hosting reseller, then you can greatly simplify the process.
When you sign up for a reseller hosting plan you can purchase hosting at bulk. Basically, it’s a lot of server space, which you can divide up however you wish. You’ll also get access to ancillary features like cPanel access, email management, dedicated support, and a lot more.
Plus, all of this is white labeled, so you can brand it under your own company. There’s no way your customers would ever know that you weren’t running the servers yourself.
Common Reseller Program Use Cases
There are reseller programs of all types, not just in the web hosting space. But, to continue our example, let’s look at a few different ways you can use reseller hosting:
1. Offer Additional Services
If you’re a web developer, or currently run an agency, then you’re likely always on the lookout for additional professional services you can offer your clients and customers that will make their lives easier (and your business richer).
For a lot of people, managing their own hosting can be a nightmare. It’s overly complex, confusing, and is a hassle.
As a developer or web agency, you can replace your customer’s current hosting company and take care of everything yourself. The hosting parent company will take care of the heavy lifting for you, handling things like:
- Server maintenance
- Updating server software
- Ensuring high uptime
- Handling support requests
This leaves you open to focus on your client and customer sites while earning a monthly recurring fee for hosting their sites.
This allows you to not only make more money per customer but also help to create recurring revenue for your business.
2. Start a New Company
Another approach (which we mentioned above) is creating your own business.
You purchase reseller hosting, also known as white label hosting, and sell those services under your own brand. The parent web host will take care of all the technical tasks, leaving you open to focus on marketing and customer acquisition.
If you’ve been wanting to get into the hosting game, then this is a great way to do so without having high startup costs.
If you do want to take this route, then make sure you read our guide to making money with reseller hosting, you’ll learn how to best increase your chances of success in the reseller hosting business.
3. Grow a Side Hustle
Maybe you’re on the lookout for additional sources of income or want to monetize your blog? If you commonly answer tech questions from your friends or help them out with website issues, then reseller hosting might be a worthwhile investment.
Instead of having to figure out multiple hosting companies, you can simply have them sign up for your hosting company and better manage their sites.
Instead of paying a hosting company they’ll pay you for hosting instead. In some cases, you might even be able to offer them a better deal than what they’re getting through a hosting company.
Pros and Cons of Being a Reseller
Joining a reseller program won’t be perfect for everyone. It can be a great opportunity, but not everyone will be ready for the work required to operate as a reseller successfully.
Here are some of the biggest advantages and disadvantages to a reseller program:
Pros of Being a Reseller
1. Low Startup Costs
When you start a reseller hosting business all you need to invest in is enough hosting space for your first customers and a website. There are no infrastructure costs, and you can keep your costs as low as possible until you break even.
2. Create a Scalable Business
With a reseller business, you can expand your business near infinitely. In the hosting example, you can simply purchase more hosting as your needs grow. All you need to focus on is signing up more customers.
3. High-Quality Service with Less Work
By partnering with a quality reseller business you’re selling their services under your name. If you partner with a company whose service you love, then you’ll be able to pass on this same quality of service.
Cons of Being a Reseller
1. You Don’t Have Complete Control
As a reseller, you won’t have complete control over all aspects of your business. You can control most of the front end, but the back end service or product is all dependant on the company you align yourself with. If there are issues with the service, there won’t be much you can do about it.
2. Can’t Compete on Price
Often, if you’re in the reseller business you’ll be forced to compete on something other than price. Most of the big players in the space will be able to offer cheaper prices, so you’ll have to find another way to differentiate yourself from the rest of your market.
What Is an Affiliate?
If being a reseller sounds like a lot of work, then you’ll probably be better suited towards being an affiliate.
Being a reseller can be likened to being a CEO while being an affiliate is the equivalent of being in sales.
In order to become an affiliate all you have to do is join an affiliate network for a product or service you love. Once you join you’ll be given a unique link with an embedded tracking code. Whenever you share this link and a person uses that link to buy a product or service, you’ll receive a commission.
Affiliate marketing is a very common and effective way to earn money online. It’s relatively hands-off, all you have to do is share your link and drive new customers to the affiliate offer.
Businesses create their own affiliate programs because it’s a great way to generate new qualified leads and customers. It’s a win-win for both the company and the affiliate. The company gets a new customer and the affiliate gets paid.
Let’s look at a quick example:
One of the most well-known and widely used affiliate programs is Amazon Associates. You join their affiliate program and you’ll have access to a unique tracking code.
Then, let’s say you’re writing a blog post about the best power tools for new dads. Any time you mention a product they sell you link to that product on the Amazon store with your unique link.
Whenever a customer clicks on that link, a tracking cookie will activate on their browser. For anything they purchase within that window, you’ll receive a commission of the total sale price.
The same goes for most other affiliate networks. The buyer window might differ, but the process remains the same.
If you’re interested in becoming a hosting affiliate, then there’s a great affiliate program right here at HostGator. Once you sign up as an affiliate you’ll be able to recommend high-quality hosting to your readers. Drive clicks, make sales, and receive a commission.
Finding Success as an Affiliate
There are multiple paths to success as an affiliate. Whether you want to create an entire site dedicated to affiliate marketing, sell affiliate products through an email list, or simply insert affiliate links throughout your content.
Here are some of the most common paths to affiliate marketing success:
1. Creating an Affiliate Review Site
Affiliate review sites are one of the most common pathways to success. This style of site is dedicated to reviewing different products or services in a certain niche. They’ll often also provide related content that answers different questions and better serves the niche as a whole.
Take a look at sites like NerdWallet, Gear Patrol, and the very unique 50em (which only focuses on two products).
These sites make their income from reviewing and recommending products. When someone purchases a product or service through their affiliate link, they’ll receive a commission.
2. Selling Affiliate Products via Email
Email marketing is a great way to drive traffic to an affiliate offer. By building an email list of people in a certain niche, you can recommend them products they might be interested.
Email also gives you the opportunity to establish a relationship with your audience and even pre-sell certain products and services before you send them to the product or landing page.
3. Add Links to Your Content or Social
If you’re not completely focused on affiliate marketing, but would like to add some additional income to your online efforts, then you can include affiliate links wherever they make sense.
This could be through a link on your social media profiles or stories, on a separate resource page on your website, or even just sprinkled throughout your affiliate content whenever you mention a product or service.
Pros and Cons of Affiliate Programs
Being an affiliate isn’t going to be right for everyone. It all depends on the goals of your website and what niche you’re in.
Here are some of the most common advantages and disadvantages to joining an affiliate program.
Pros of Being an Affiliate
1. Generate Passive Revenue
When affiliate marketing is done the right way it can generate you consistent passive income. Of course, this depends on how your site is structured. But, if you have high ranking review-style content that gets consistent traffic, you can expect a certain percentage of this traffic to convert into income.
2. Easy to Get Started
All you need to get started with affiliate marketing is a link. Once you have your unique tracking link you can promote this to your existing social media audience, or start to create content about the service you’re recommending on your own website.
3. Low Level of Responsibility
Once you’ve referred a customer to a company, your work stops there. You don’t have to deliver on the product or service. All you have to do is sit back and wait for your commission to arrive.
Cons of Being an Affiliate Marketer:
1. Commission Only Sale
Unlike running your own business, even if it’s reseller based, you don’t really have the opportunity to grow your income via upsells or other products with affiliate marketing.
Sure, you could recommend other products to your audience down the line, but right out of the gate your income might be a little limited. You’re also limited by the commision that the affiliate company is willing to pay out.
2. Sales Aren’t Guaranteed
There are no guarantees in the world of affiliate marketing. Just because you sent a lead to a company doesn’t mean that person is going to follow through with the sale. While there are click-based programs that payout affiliates based on the traffic they drive, most pay out only upon confirmed sales.
Reseller vs. Affiliate: Which is Right for Me?
Whether you choose to become a reseller or an affiliate depends on your goals.
Do you want to create your own business offering reseller services? Or create an add-on service for your current business? Then, reseller hosting might be right for you.
Do you just want to recommend products and services and receive a percentage of the sale? Then, becoming an affiliate marketer is probably the path for you.
Hopefully, by now you’re leaning in one direction or the other. Whichever direction you’re leaning towards, you can make it happen with HostGator’s highly-reviewed reseller hosting services and affiliate programs.
Kevin Wood writes about technology and human potential. You can find him at his virtual homes Wooden Writing and Counter Culturist.