Webhosting Reseller Programs - Look Before You Leap!
So, you're considering reselling and you need the straight scoop
on it?
There are so many hosting companies, all claiming to be the best
deal, and all telling you that you'll make more money reselling
their services. Who's to trust? Which is best?
Hopefully you have questions about the business itself. How does
this all work? How do I set my prices? How do I market the
product? What works? What doesn't? Who is my competition?
My name is Larry Dozier, and I am part owner of a primary web
presence provider business. In real English, that means I
partially own and operate a web hosting company. I started out
in the Hosting Industry by reselling accounts for another
company. Today, we operate our own servers and have a reseller
program of our own.
This has given me a unique view of both sides of the reselling
coin.
How you choose to run your reselling business will depend,
primarily, on how you answer the following 3 questions:
1. Will reselling be your primary or secondary focus? 2. Once
you sell a hosting account, will you retain control of the
website it houses? I.e., you are the designer and will maintain
the site. 3. Will you be marketing online, or to your current
clients?
How you determine your pricing structure will hinge on how you
answered these three questions.
If you will be offering hosting to existing clients as an added
service, you can, generally, charge more than if you were
marketing exclusively online.
When an individual purchases web hosting online, they take a
risk. Perhaps their newfound host will be a top-notch outfit
with superb tech support, reliable servers and excellent prices.
On the other hand, perhaps they will find themselves in the
middle of a horrendous tale of inadequacy.
But, if this same individual already has an existing business
relationship with you, a person they already trust, much of the
fear is removed. This reduction of risk, worry and stress is
worth a premium. Ask any website owner if they would rather pay
a little more for reliability, or stay up at night worrying
about their website.
Another factor in deciding your prices is cost. Your number one
cost will not be the wholesale price you pay your provider. Your
number one cost will be your time. What is it worth, and how
much time is involved?
If you answered yes to question number 2, your time investment
will be minimal. Customer support is a huge time expenditure,
especially if you do it right. By being both the host and the
site administrator, you come out way ahead.
Finally, you must look at your competition. In order to do this
properly, you must determine which market you will be competing
in.
In general, there are two markets for web hosting services.
These are the online market and the local market.
If you choose to market online, you will be forced to keep
prices extrememly low. You will also incur some fairly heavy
customer support costs. Because your prices will be lower, so
will your profit margin. This means one thing - VOLUME.
For the online operator, automation is crucial. The more
streamlined your system, the higher your profits and the lower
your blood pressure.
Let me interject one thing here, while we're talking about
marketing. Streamlined does not mean neglecting your customers.
A little consideration goes a long ways in this business. If you
answer your customers emails, return their calls, take time to
listen to them, you'll build a large base of loyal customers in
no time at all.
Regardless of your marketing approach, there is one more huge
question to answer before you begin.
Who will you be reselling for?
When choosing an upstream provider, pay particular attention to
the three R's:
* Reliability * Resalability * Relationship
The company you resell for should, above all else, be impeccably
reliable.
Consider this scenario:
It's 2 A.M. on a Wednesday morning. Your phone rings. It's your
most valued client, and his website is down. You quickly check
your email, and find several more pleas for help. You dash off a
quick email to your upstream provider.
It's 6 A.M. No answer from your provider.
It's 2 P.M. You receive a garbled email from your provider.
Something about a relay that went down in Kentucky, and it's
completely beyond their control.
It's 6 P.M. The server is still down. You seriously consider
taking your own telephone off the hook. You wonder if you'll be
able to keep half your clients. You realize, with a sick feeling
in your gut, that there is nothing you can do. You have placed
your credibility in the hands of a company that is not returning
your calls.
Hopefully, this scenario drives home the fact that when problems
occur, you can do little more than call your provider. It's
crucial that your provider be reliable.
Resalability comes next on the list. Take a good look at the
product. Can you sell it? Would you buy it yourself? Are there
plenty of features and selling points?
Finally, consider the relationship you have with your provider.
Can you call the company and talk to a real person? The same
person each time? Do they remember your name? Do they answer
your emails promptly? Remember that your upstream provider is
the only link between you and the server. Having a strong
working relationship is vital to the success of your business.
Reselling web services can be an extremely profitable solution,
but, like any other business, you will do best if you do your
homework before jumping in.
Good Luck!