What are the pros and cons of offering reseller accounts?

My list of pros and cons:

Pros
I see the main pro being that a lot of my potential clients seem to want one and go elsewhere for them.

Cons
I see the main con being that any of my clients could get one and get their friends signed up under them instead of under me, kind of killing word of mouth.
I also think it would be more support for resellers, and they'd use more resources than normal clients.
Also clients wouldn't sign up for multiple accounts.

Any comments?

I think there is no Cron in offering Resellers account. Offering Resellers accounts can give you $$$. :D

i think you have already worked out the pros and cons. I would have to say you hit the nail right on the head

I'm thinking maybe doing resellers.mydomain.com and when people email asking about them, do that, otherwise not advertising on it on the site... sound like a plan?

You could always get an additional server (and more powerful) to house reseller accounts only. That's what we do.

I wouldn't recommend this unless you get a lot of reseller accounts and it will be a permanent move. Not everyone is good at handling/selling them, and you wouldn't want a server to just go to waste and lose money.

That's where most of my cash flow is, resellers. They are happy and so am I. The great thing about resellers is that most people that get reseller accounts know how to manage it themselves and they don't need much support. Go for it I'd say.

Originally posted by Dynamix
That's where most of my cash flow is, resellers. They are happy and so am I. The great thing about resellers is that most people that get reseller accounts know how to manage it themselves and they don't need much support. Go for it I'd say.

I agree 100%.

I suggest you first make sure whatever your base business is that you get it in a good profitable position then expand from there.

Our business plan was to fully establish our dedicated servers first. Now that it is going well and we have a solid infrustructure to build on we will begin moving to the resellers market. Our belief is that strong resellers will move to dedicated servers.

It still comes down to having a solid business plan, that you can implement, and then building from your strength.

When clients are looking for shared hosting, they probably won't say "Oh, they offer reseller plans, I may as buy one of them". If they're looking for a shared plan, then he/she will buy the shared plan. Therefore he/she can still refer a friend. The idea of reseller.yourdomain.com isn't going to go over very well. Resellers want to look like a separate business, not a reseller of someone else's service.

Pros: Increased sales and cash flows.

Cons:

1) As your reseller grows and decides to go for a dedicated server he is going to take his clients with him. Therefore there is a potential for a substantial drop in sales and cash

2) Some view reselling as a get rich quick scheme. Person with absolutely no technical knowledge signs up for a reseller package gets bunch of customers and just passes all the support tickets from his customers to you. Since he has no tech knowledge you are playing a broken phone game. Where he tries to deliver the message to you in his own words and then does the same to your response when he forwards it to his customers at the end you are faced with increased volume of tickets that don't have information you need to solve the problem.

There was another one I wanted to mention but I forgot what it was :).