I have been considering which hosting company to use to begin my reselling. Perhaps the most obvious decision is that of plan-by-plan vs. buy-in-bulk reselling. When the bulk plans go for $30, it seems like a no-brainer, especially when hosting small sites. That one $30 account can house many small sites, and generate a much higher profit than the plan-by-plan method.

But in my search for which company to use, what I've found is that all these companies (SplashHost, Voxtreme, Cyberwings, AlwaysWebHosting, MCHost) are still very new, young, small companies. Are there any older companies offering such plans at all? If so, are they anywhere near as cheap? If not, why?

Are these plans really too good to be true? As dedicated as these entrepreneurs may be, they're not martyrs (at least I hope not) - if they don't make a good living, they'll either close up shop or need to raise prices considerably.

Any thoughts? I'd love to hear from the hosts themselves if they've got the time.

- Doug

What do you want to know DougT?

You've now started three threads with basically the same exact message. Are you trying to start a flame-war without firing the first shot?

You will get better answers if you ask the question you want to get answers to as plainly as possible.

From stormtrooper:You've now started three threads with basically the same exact message. Are you trying to start a flame-war without firing the first shot? I assure you that I have absolutely no intention of starting a flame war. I think this is very legitimate and relevant question. And with all due respect to the hosts out there, I believe this to be a forum for the education and benefit of the reseller. A discussion of this topic can only add to that.

The multiple threads are easily explained. I realized my first post topic was more general than I wanted, so I posted specifically about two companies. This post arose out of that second thread, but in my mind is a distinct topic that did not belong in a thread where I was asking about specific hosts. Just because it may help me with my decision does not mean that it can't stand on its own as a topic of discussion.

Certainly there is some cross-over among the threads, but I don't think this is necessarily an offensive act. My experience with various forums is that you'll get more productive discussions with focused threads. Thus, the seperation.

- Doug

May be due to their model actually working well for them and is tried and true, as seen with some of the "smaller" hosts that are on this board having considerable growth.

Many of the bigger hosts rather internet server providers as such are offering programs not at reselling disk and data, more so selling complete services that they manage outright. This has extended towards the hosting area in their operations and more so from the administrative and technical aspect. Much easier to run a program where all is restricted to support issues than having extra dilemmas with problems from "resellers" messing around with the workings, then devote added resources ie. employees, to handle that at the expense of profits.

I still think it's an interesting question,
plan-by-plan vs. buy-in-bulk
I think the plan-by-plan method is not a bad way to start, it's the "baby steps" philosophy. I think it works with ventures online because they give great support. But I agree that most websites will never use all the resources (i.e. harddrive space, bandwidth, databases etc), therefore the buy-by-bulk method is more profitable. Nothing ( :confused: ) prevents you however from switching to another host once you have a lot of clients. Although I don't really know how easily this is done, probably do it at 4 in the morning so you don't hurt your customers;).

I was looking at venturesonline and they also offer dedicated hosting. If they really give such excellent support, it would probably be pretty easy to upgrade to a dedicated server (although there not the cheapest;)).

I guess a lot of it has to do with your long term strategy and how much you know about webhosting and *nix system administration. If you're comfortable with system administration, you can always get a cheap dedicated server for about $100-150. The startup costs are higher, but $100/month to start a business is relatively cheap.

I haven't been on this board long enough to know what the average *nix knowledge is for a reseller. I assume minimal??? That and how much the reseller is willing to learn would factor in to any discussion.


ciao :D

I can tell you that im making a good profit and my business model is working fine.

Originally posted by SplashHost.com
I can tell you that im making a good profit and my business model is working fine.

Same here :)

Alan, Matt - I am very glad to hear that. Obviously no one has a crystal ball, but you feel confident that this can work long-term? I am not talking about dealing with growth, support, changing providers, etc - just about the model to sell low-cost bulk plans for reselling.

Can you pinpoint what may have changed over the past year to make this a viable model? Have prices on your end come down to a point that makes it possible? Is there new software or technology that has allowed this to succeed. Or maybe, as I think Nishtec was saying, was this just not actively pursued until recently?

I do hope you're right in your assessment, because it really is a win-win situation for everyone involved if this can work :) . I do hope that you didn't take this as a belligerent post - it was not intended that way.

- Doug

Originally posted by Doug T
Are there any older companies offering such plans at all?Doug,

Why do you feel that older is better? Most older companies have so many deadwood employees and so much overhead that they simply can't compete with newer, smaller, more nimble companies that have lower overhead.

All these companies that you mentioned have very intelligent owner/managers. I certainly have to believe that Alan, Matt, Marc, Shawn, and the others would not offer a reseller plan unless it is profitable for their company.

Doug, instead of spending time trying to do a strategic analysis of the long-term viability of the wholesale web hosting industry, why don't you take the plunge. Spend the $30.00 and then go out and try to sell some hosting. IMHO that is the acid test!


Best of luck,

Keith

If you want to know just how well im doing then off the sales ive had this month i could pay my own wage, someone elses wage and another couple of servers.

Originally posted by Doug T
Alan, Matt - I am very glad to hear that. Obviously no one has a crystal ball, but you feel confident that this can work long-term? I am not talking about dealing with growth, support, changing providers, etc - just about the model to sell low-cost bulk plans for reselling.

Can you pinpoint what may have changed over the past year to make this a viable model? Have prices on your end come down to a point that makes it possible? Is there new software or technology that has allowed this to succeed. Or maybe, as I think Nishtec was saying, was this just not actively pursued until recently?

I do hope you're right in your assessment, because it really is a win-win situation for everyone involved if this can work :) . I do hope that you didn't take this as a belligerent post - it was not intended that way.

- Doug

I am confident it will continue to work, and work well. Current results do not show anything negative, we make a profit, our resellers make a profit, and as long there is demand for such an offering, I believe it will be profitable.

I also believe younger, more flexible companies can change quicker should demand fall - they can restructure to offer slightly different services, if there is a market for them.

The bulk model works for the reseller host when the reseller surpasses the bulk resources they're provided. When they do that the reseller host's generally rake it in by charging an inflated fee for bandwidth and web space. It makes sense for resellers who expect to stay within their means, for those who plan to grow it may not be as effective.

A Server + CPanel etc is around $200 / month.

Now Stick 16 resellers on it @ 35ea = $560

Thats $360 profit a month before other expenses.

Now Get your self a few clients and servers and yes you will make money!

That method is volume based and overusage methods usually are more so applicable to lower volume plans, considering if you have less income due to selling low, then you are "hoping" that one day they will achieve full usage. Undercutting the market by up to 50% may have its benefits but places the risks in other areas, including the ability to pay for support staff in dealing with the volume that would be generated to support such numbers of tickets, etc.

Getting back to Doug's question, if you are worried about the issue of the lifespan of a host, be more concerned that the host is actually a registered business or company, as if they are then there is a better chance of them staying around if they see that doing things the right way is as important as making loose change and then some. Some younger ones as matt said, can adapt and this is true so consider all aspects before you make your choice.

From 4solutions:Why do you feel that older is better? My point is not that older is necessarily better. It just struck me that every company offering these types of low-cost bulk plans is very new, and I wondered if that indicated that this model is not sustainable.Doug, instead of spending time trying to do a strategic analysis of the long-term viability of the wholesale web hosting industry, why don't you take the plunge. Once I get started researching something, I just don't know when to quit - "analysis paralysis" I've heard it called :) Honestly, though, this thread was motivated more by a general interest in the subject than by my search for a specific host.