hi, Im new ito the hosting game and was wandering how much should I expect aking from Reseller hostingservice.
Most of them have cap of 20-180 cpanel clients.

for example lets say i have:

24.99$/mo reseller plan and have
12GB and 220 GB Transfer
I can resell 180 clients.

So my yearly expense just for hosting is 300$ (plus for transactions payments etc. from clients, Dediceted IP 29$/yr for SSL , self signed SSL...so all together about 330$/yr + Payment gateway cut 3% off the sale price... eeehm.)
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>>So per client maximum I can offer is:
65 mb space
about 1200 MB Transfer
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I mean who is going t pay even 2$ for 65MB plan. (even if I could offer twice as much) how in the world is it possible to compete with the gigantic hosting offers for 3-4 $ more 300GB space and 3TB transfer plans. I mean those guys SQL space offer is bigger them my entire host package...those plans sprouting like everywhere, you just type web hosting in google and first 20 companies are those megaplan types.
Am I missing something here? Please someone shed some light on this.

would it make more sense to figure on 12 clients?

I didnt want to point fingers so I slightly tweaked numbers offered on one popular reseller package plan. Which doesnt change anything really.

would it make more sense to figure on 12 clients?

12 clients? then they have to pay me , lets try math.

my monthly expense is about 30$ for plan. that means if I had them all
2,5$ from each client a month has to go to reseller provider just to brake even.
so how much can I put margin, any suggestions?

1GB space 18GB Transfer.

so lets say I went "wild" and charged 8$ for it, and I found all 12 people that would pay that out of pity.

8$-3%(.24$ to transaction merchant Paypal)=7.76
7.76-2.50(to parent)=5.26 for me
5.26 X 12 = 63.12$

so I can make 63$ a month, wow
... (thats my cable internet price a month)
even if I charged 10 or 12 or 15$ it still a joke u can see this now.

You need to find one that offers overselling feature then you can assign any quota to any user. Your then not limited to splitting up your quota between users

Well you either should find yourself a less expensive host or get one that allows overselling.

What Im trying to say is that if you are actually planning on making money as a reseller and maka a potential client think that your services are more desirable then super mega offer host that owns world you need extreme flexibility to tweak your offer to the extent that will beat the all inclusive mega plans.

your game is client volume/low price. Client cap kills the game.
you'll never work out a margin that will bring you lets say 7-800$/mo profit with client cap on reseller hosting.

Problem is that big hosting made average public believe that 3 TB transfer costs 6-8$ a month, I have tested several of my friends and showed few hosting sites and asked them to tell me first impressions from what they saw on each site.
Answer was that first thing they noticed was low space and bandwidth on one of the hosting sites. that was everyones comment. and low resources they were talking about was 10GB of storage with 200GB of transfer - which was a top choice mega plan like not more then year ago.

Now resellers "job" is to convince and reeducate the average public that you'll never use even a fraction of the mega plan offers of 300GB/3TB, but we all know hats not how human brain works, it always strives for more in exchange for less even if its unusable. (we also know that if you acually fill 300GB space and used 3TB transfer a month you'll get advised to upgrade to dedicated servers, if not then your account gets kicked off the server)

Well you either should find yourself a less expensive host or get one that allows overselling.As a reseller , who pays for the risk of resource oveload? your parent? I dont think so, if your clients go over your actual expectation it's coming out of your pocket.

Valid points, most users tend to educate themselves after being burnt the first time by these hosts offering ridiculous space and transfer allowances. Some take more convincing and they go through 5-10 hosts before they see that they can't have the world for $10.

The problem here is the industry is not regulated at all and people can lie, steal and cheat their customers all the way to the bank.

I wander what would happen if there came to be a government regulated office that would start monitoring overselling braking it down on actual ability to offer resources. That would be a sad site hahaha, I can just picture now ads like
"Get your all inclusive super mega plan of 100 MB of storage and 1GB of transfer for only 24.99$ a month" Im just speculating but I guarantee GB would switch to MB and TB to GB in ads and offers.

Here's the thing: Not everyone is looking to pay less on hosting than they pay each month for coffee. Serious businesses won't even look twice at companies offering those companies. Look local, you'll be seen as a laughing stock of a company if you try to offer everything for nothing.

Instead of trying to compete with the larger 'budget hosting providers' (which you can't), sell on quality of service, not quantity. There's absolutely no reason to come in to the hosting industry by way of always trying to cut and lower costs.

With 12GB space and 220GB of transfer, you have a heck of a lot of space and bandwidth to play with, but don't let that be your primary selling point. Sell on service, make disk and bandwidth assignments an afterthought.



Simon

With 12GB space and 220GB of transfer, you have a heck of a lot of space and bandwidth to play with..

Honestly I m not sure how you imagine managing 12 GB of space to make a profit.(without risk of overselling)
Conceptual analysis is easier then specific game plan that will turn into profit.

I've already done math twice and numbers don't lie. offer is too low to emphasize on quality or whatever I could hold on to overpower terahosts (in potential clients mind). I definitely dont mind if people would pay me 10$ for 50 MB. everyone is most welcome.

Honestly I m not sure how you imagine managing 12 GB of space to make a profit.(without risk of overselling)
Conceptual analysis is easier then specific game plan that will turn into profit.

I've already done math twice and numbers don't lie. offer is too low to emphasize on quality or whatever I could hold on to overpower terahosts (in potential clients mind). I definitely dont mind if people would pay me 10$ for 50 MB. everyone is most welcome.


Local clients will pay more for one.

If you can prove yourself to provide quality support and get a provider that can offer good service you can easily market 500MB Space and 5GB of Bandwidth for $9.95 per month.

At those rates you could put 24 Clients on that reseller for a Grose off $238.8 without overselling.

Your actually being closed minded if you are trying to compete with hosts offering huge space and bandwidth.

Local clients will pay more for one.

If you can prove yourself to provide quality support and get a provider that can offer good service you can easily market 500MB Space and 5GB of Bandwidth for $9.95 per month.

At those rates you could put 24 Clients on that reseller for a Grose off $238.8 without overselling.

Your actually being closed minded if you are trying to compete with hosts offering huge space and bandwidth.

I agree, only thing is your example plan sets out x10 more resources that we were talking about. 50 MB not 500 MB.
500mb for 180 clients would require 90GB space not 12 GB we have.
Even though with your math I can see it possibly doable. 500 MB not too bad.

Example I brought was based on one of the better reseller plans. most Ive seen have like 30$/mo 50MB space and 1GB transfer (hurry now!)
I'll refrain from posting link.
Thanks though for your comment , I appreciate tip that locals could bite.
door to door sales anyone?

Honestly I m not sure how you imagine managing 12 GB of space to make a profit.(without risk of overselling)
Conceptual analysis is easier then specific game plan that will turn into profit.




do you expect to pay $25 per month and have the same resources as a company with a thousand servers?



so I can make 63$ a month, wow




you showed with your math that you can make $63 per month off one reseller account. Get 1,000 reseller accounts, and you will be making $63,000 per month.

is that specific enough?

do you expect to pay $25 per month and have the same resources as a company with a thousand servers?




you showed with your math that you can make $63 per month off one reseller account. Get 1,000 reseller accounts, and you will be making $63,000 per month.

is that specific enough?

lol, yeah very specific just not realistic.

and no im not expecting to have 3tb of transfer for 25$, what Im saying is enable overselling and take responsibility for it. Ultimately these are parent's clients, if you change parent host those clients stay with parent host.

I also think that if you are starting as a reseller, then your point is to keep costs low or at least break even. Really, if you are having plans to be primarily a webhost, then you should be thinking about how much of a customer base you are building up for when you start renting your own boxes.

Lol, when I first got into this industry there were several hosts offering that very plan. 100 megs at $24.99 was actually a pretty good deal back then. :stickout:

What people don't realize is that a big percentage of web sites on the internet still, even today, don't use more than 100 megs of space. They really don't need 300 gigs, or for that matter, even 300 megs. Smart consumers know to choose a host for the host (mostly support and reliability), and not for its plans. Your best bet is to go after the smart consumers. Not only are they less likely to leave, but they will be more respectful as well (fewer support tickets, fewer TOS violators).

I wander what would happen if there came to be a government regulated office that would start monitoring overselling braking it down on actual ability to offer resources. That would be a sad site hahaha, I can just picture now ads like
"Get your all inclusive super mega plan of 100 MB of storage and 1GB of transfer for only 24.99$ a month" Im just speculating but I guarantee GB would switch to MB and TB to GB in ads and offers.

I wander what would happen if there came to be a government regulated office that would start monitoring overselling braking it down on actual ability to offer resources. That would be a sad site hahaha, I can just picture now ads like
"Get your all inclusive super mega plan of 100 MB of storage and 1GB of transfer for only 24.99$ a month" Im just speculating but I guarantee GB would switch to MB and TB to GB in ads and offers.

I missed this one, but I doubt your average 1GB to 24GB plans starting at anywhere from $5.00 to $15.00 per month would change.

Most of those ones are actually realistic and the company could provide that service.

There actually is a government agency that could regulate this in the US, but doesn't.

If they "Can't" provide the resources advertised it would be called "False Advertising" and is illegal.

The catch is, that most of these companies use TOS statements about CPU and RAM usage before you ever reach your alloted limit for space/bandwidth.

By doing this you could never actually prove that any company is providing false advertising.

To the OP: Many people enter this industry planning to make it big within a few months. If you really want to run an honest host, and build a respectable, solid reputation with the resources that are available to you as a reseller, then it takes time. You have to get your name out there. The most important thing is take care of the customers you have and be patient. Every business has its own competitive advantage. Your's is not going to be price starting out, but thats ok. In time, you will find what it is and how to leverage it to your advantage.

DarkRaider, it seems that you are looking at things from the $$ standpoint. Granted, the name of the game is to make money, however, IHSL's idea is what I feel will eventually win (i.e. quality over quantity). You will never be able to compete with these oversellers that offer TBs of space and/or bandwidth for small prices.

The idea that I have is to offer them around 50, 150, and 500MB of space. Three packages. Divide tbe bandwidth how you want. Look at other smaller companies offering similar package. I'm sure you're crunching the numbers. And nope! You won't make a killing. In fact, at first you will probably be in the negative. The object here is not a get rich quick scheme. If you need money this quickly, then I'd suggest a grass cutting business.

Another standpoint I see is the type of people you will draw with smaller packages. You will draw people with less CPU intensive websites. Remember, you only have a reseller account, you don't have your own dedicated server... yet. The CPU usage is the most forgotten feature it seems. If you offer 1GB+, you may have users that will try to use as much of that space as they can. Granted, they did pay for that, but when they start hogging up CPU usage, that will affect everyone on that server (not just your reseller account).

Build a nice customer base with your reseller account. As business grows, then so can your hosting. When you get enough people, then one day you can upgrade to a dedicate or semi (VPS) server. Another factor is that do you have the manpower to handle hundreds of hosting customers? It sounds like you will be the only employee at first, therefore, you don't want to start signing up hundreds of people and not be able to give them the proper technical support.

thanks good points.

later today: "
... hmm where is my lawnmower.. it was here somewhere.." :)

so lets say I went "wild" and charged 8$ for it, and I found all 12 people that would pay that out of pity.

If $8 is going "wild", then I guess we are in big trouble - as we do not have ANY account anywhere near that inexpensive..


your game is client volume/low price. Client cap kills the game.

If client volume/low price is the game you are playing in a services industry, then yes, the client cap kills the game - HOWEVER, Client caps also provide a massive opportunity for stability and reliability if managed properly by your upstream provider - this directly equates into lower support costs, increased client retention, increased margins, etc...

you'll never work out a margin that will bring you lets say 7-800$/mo profit with client cap on reseller hosting.

Honestly - 7-$800/month is nothing - absolutely nothing - you should be aiming much much higher or not even bother. The problem as I see it is that you are trying to sell hosting on servers with unlimited cpanel accounts, single server environments, single platform, no innovation, no imagination and honestly - zero value... I apologize, however, you are correct - you will be doomed to fail if you try to sell a service based on price with absolutely zero value statement other then price...

you want me to aim higher then 800$ profit out of 20 clients with 20GB. please do math and share results as well when making statements and strong suggestions . I like numbers.
again thanks for theoretical analysis full of innovative spirit and motivation.

Ok, its easy to make a profit, just over sell :) Look, if you have a 12GB reseller account, sell 20 1GB accounts with 20GB bandwidth at say $6.95 p/m, thats $139 income per month, then $1668 income per year. So you can easily make a profit on that reseller, although you need to gain the customers first.

you want me to aim higher then 800$ profit out of 20 clients with 20GB. please do math and share results as well when making statements and strong suggestions . I like numbers.
again thanks for theoretical analysis full of innovative spirit and motivation.

LOL - easy there Darkraider...

You can make $800/month profit on a single customer if you have value. Of course, if all you are trying to sell is space and bandwidth, well, then its impossible...

Apparently I need to spell this out for you.

So, for example - sell this client a managed CMS including design and website updates or a managed ecommerce solution including design, seo, website updates - whatever - and $800/month is easy to attain from a single customer.

If you have zero value adds to bring to the table and can only sell hosting - ok - then get a reseller account which will allow you to sell solutions and not just space and bandwidth. One large application hosting customer on a dedicated server + 20-30 exchange users + lets say a managed application can get you close to your $800/month profit from a single customer

Is this enough innovative spirit for you? Of course you can keep banging your head against the wall trying to figure out how to make a living selling space and bandwidth - and the only answer is to oversell like mad, provide a valueless service and inevitably, as you have outlined, fail...

Hope this helps....