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  1. #1

    Question I just dont understand...please explain :)

    I really dont understand this whole reseller webhosting. People rave about places like bluewho.com, but how in the heck can you get customers when you only get 15GB data transfer? This is like giving each customer around 2GB, compared to most hosting companies which offer over 50! How in the heck can you compete?

    Now, why dont people just get a dedicated server? You pay $40 per month at BlueWho.com for 45GB of datatransfer, when you could get 1000GB! for only a few bucks more at Managed.com, or Server4You.com. What is the point of these other resellers when you have cheap dedicated servers at your fingertips?

    Someone please explain, I just dont understand! What am I missing? Thanks.

  2. #2
    Join Date
    Oct 2003
    Location
    Morocco
    Posts
    549
    Hello,

    well it is very simple, a dedicated server needs that the owner has wide administration knowledge and also much time to keep an eye on the server and fix any eventual problems, on the other hand you need also to buy control panels and softwares for your dedicated while in reseller packages it is included...

    As for competing, some resellers uses bandwidth overselling, means that they sell to the customer 50Gb for exemple while they only have 15Gb, ofcourse not all clients will consume all alocated bandwidth, thus the reseller will not exceed the limits...

    Hope I was clear, if you have any other questions don't hesitate
    RofyHost - Affordable Shared & Reseller Hosting Since 2003
    Proud Moroccan

  3. #3
    Join Date
    Mar 2003
    Location
    VA
    Posts
    640
    voidix, services are not always competed via price and quantity. Many hosts if they provide top notch support with hosting plans to specs like you named for a little above normal pricing, they will prevail over the bigger guys/other guys.

  4. #4
    Join Date
    Apr 2003
    Location
    London, UK
    Posts
    4,695
    Not everybody uses a reseller account to start a hosting business, some will use them because they have several sites of their own and it makes them easier to manage, or you have people like web designers who'll use them for small accounts for clients.

    The idea that you could just get a server from somewhere like managed .com for a few bucks more then just start throwing customers on it and charging money is why you see so many threads here of people saying their 1gb/50gb $2 a month host has been down for 2/3 days, because that person doesn't have the slightest clue how to run a server.

    It's fine when everything's working but when something goes wrong, they are stuffed.

  5. #5
    Greetings:

    “but how in the heck can you get customers when you only get 15GB data transfer? This is like giving each customer around 2GB, compared to most hosting companies which offer over 50! How in the heck can you compete?”

    1. One of my business mentors taught me over ten years ago to never compete on price.

    2. Target your niche carefully. From our experience, most business consumers do not give a hoot about disk space, data transfer, operating systems, etc. They care about very specific needs that allow them to run their business smoothly. For some that could be email reliability, for others the Web, and so on.

    3. A lot of the providers who offer such unrealistically high data transfers do so because they have a good feeling most of the consumers use under 500 MB of transfer per site. A lot of small to medium businesses can easily work with 500 MB to 2 GB of data transfer per month.

    Thank you.
    ---
    Peter M. Abraham
    LinkedIn Profile

  6. #6
    see the thread right under this one

  7. #7
    The small reselling accounts are for starting out a hosting business or for someone to host their own sites.

    I originally started out with a small reseller account just for personal sites as paying 10/month for 3 sites was just too costly when there are cheaper alternatives that provide the same service.

    Like others have said, most sites don't use a lot of bandwidth. Plus, most of my customers came to me because they were looking for more personal service.

    Everyone weighs different things as being needed in a host and while price is important....it's no bargain if you can't reach your host.

    Cheap dedicated servers are usually slower speed etc than you can get on a reseller account.

    Reseller accounts allow you to focus on customer service while if you run a dedicated you also have to manage that or pay extra for managed service.

    It really comes down to what someone can afford in price and time.

    I think reselling is a good way to get started and when you're ready then go dedicated.
    Lil' House
    http://lilhouse.net
    Web Hosting, Domains, and Enom reseller accounts available

  8. #8
    Join Date
    Apr 2003
    Location
    San Francisco, CA
    Posts
    428
    I would imagine it really depends on what you want to focus on.

    We have resellers who have more than one reseller account with us, on more than one server, that actually do hosting, but do not want to take care of their own dedicated server. Some resellers have reseller accounts on different providers at different Data Centers to spread their customers out (avoiding complete nertwork outages should they happen). We do some dedicated servers for some folks, and some want us to do everything, some want to do it all on their own. One of these options must make sense to your business model...

    So ask yourself, what do you want to do.... Do you want to update Kernels? Do you want to install firewall software etc? Do Upgrades, solve software problems etc? Are you hands on? The questions are endless, but they help

    HTH
    Hostito, Inc. - Web Hosting & Reseller Plans
    http://www.hostito.com
    [email protected] - 1 888 467 8486

  9. #9
    Thanks Voidix for starting this thread because I am wondering the same than you:


    “but how in the heck can you get customers when you only get 15GB data transfer? This is like giving each customer around 2GB, compared to most hosting companies which offer over 50! How in the heck can you compete?”

    Say you get a 15 GB reseller account, say you offer $3 GB Data Transfer, you can afford just 5 clients !!!! No much profit on it, is it??

    A question for you experience resellers, How many GB Data Transfer are u getting with your reseller account??

    Thanks a lot in advance

    Laura

  10. #10
    Greetigs Laura:

    For better or worse, a number of resellers oversell.

    To a degree, if properly managed and resources for overages are readily available, that works out well.

    We are a direct provider.

    Our average small business client uses 0.2 GB per month; most don't go over 0.5 GB.

    Lastly, our experiences over the past eight years in hosting (nine years in business overall come this June) is that most business customers care more about personal service support, and the values you add.

    Thank you.
    ---
    Peter M. Abraham
    LinkedIn Profile

  11. #11
    Join Date
    Apr 2003
    Posts
    936
    You pay for service... Not just MBs and GBs.


  12. #12
    with a dedicated server you pay for more than just the sever. Depending on who you get it from you have to pay for database licenses (mssql), control panel licenses (with some providers), third-party software (dlls), etc. all of which can add up.

    to be able to offer all the features I'm offering with my reseller account on a dedicated server would cost me at least $5k upfront for licenses plus the extra fee for the server.

    I know when I've always looked for hosting, I didn't care too much about the bandwidth available, but more of what features were supported and how good is uptime and support.

  13. #13
    Join Date
    Oct 2003
    Location
    Tas, Australia
    Posts
    2,488
    Search the forums for worst hosting company...

    You'll find out why people would want to pay for good service.
    New site: www.talkutas.com

  14. #14
    Greetings:

    We have resellers who are charging 40% or more than our own retail prices.

    And we have direct clients that were paying 1/3rd or more less than with us before they came to us.

    Two quick stories:

    1. A local company was with a large national provider paying around $20 per month, but having daily email problems to the point where it was costing them over $100 per day.

    They came to us, and are paying $100 per month (5 times more) because they knew from face-to-face discussions, presentations, et all that we would deliver.

    They are saving several thousand per month with us when you compare what they were going through before hand.

    2. A few years back we had a company come to us that was getting very close to free hosting; but their site was down all of the time.

    They had an idea for earning revenue through Web advertising; but they also knew that adverters would not pay if the site was not up.

    They started with a $100 per month plan, and after being satisified, their advertising revenues growing, they grew to the point of needing a dedicated, and then two dedicateds.

    Finally, to the ponit where they needed as close to 100% up time as you can get, and were willing to pay over several thousand per month on a several year commitment to ensure they get it.

    So find your value statements, and do not compete on price alone.

    Thank you.
    ---
    Peter M. Abraham
    LinkedIn Profile

  15. #15
    Join Date
    Dec 2002
    Location
    Quad Cities, Iowa
    Posts
    1,597
    I don't have a reseller account, I have my own dedicated server which I provide webhosting on.

    Currently I host 51 websites.

    Last Months Bandwidth Usage: 7.2GB's
    Estimated Bandwidth Usage for current month: 8.4GB's

    Now that could all easily change if I was hosting a high traffic site, but the fact is, most sites on the net are not high traffic.

    Could you oversell bandwidth on a reseller account?
    Yes

    Could it bite you in the behind later down the road?
    Yes if you host the wrong person.

    Can you make money reselling?
    How do you think I started out. I was making money on day 1.

    Why did I go dedicated?
    I like to have complete control over everything. I also am very experienced with linux.

    Why not just buy a managed.com server for a couple bucks more?
    I was always taught that you get what you pay for. I have also heard some bad things about managed.com. Also I highly reccommend you do not get your own dedicated server, and put paying customers on it, unless you know exactly what you are doing. Some of your future customers may actually make a living off the internet, and if there website is down, they are not making money.

    When you have a reseller account, the company who sold you the account manages the server and makes sure everything is running properly. Why put unneeded stress on yourself if it is not mandatory?

  16. #16
    Join Date
    Sep 2000
    Location
    Alberta, Canada
    Posts
    3,109
    The thing to understand is which Market you are going after.

    If you want to resell Hosting services then going with a Hoster that provides over selling will give you your best bang for your buck. With 15 GB of Data transfer, in your package, you can create your sub-account Hosting packages providing for 10 GB of Data transfer in each package, and still have 20 or 50 sub-accounts. That's how 'you' make money.

    You must remember though, if your sub-accounts bring your Data transfer over 'your' limit (15 GB) then you will have to overage charges. That is understood though, and should not be a problem.


    A Web Designer may want to offer Hosting packages to their Clients and is a totally different Market. Clients of a Web Designer are usually happy with whatever the Designer says they need. As most Clients can get by with 50 MB of Web Space and 1 GB of Data transfer per month, the Web Designer (with 15 GB of Data transfer) can easily provide for 14 Clients. They would not need over selling.
    • PotentProducts.com - for all your Hosting needs
    • Helping people Host, Create and Maintain their Web Site
    • ServerAdmin Services also available

  17. #17
    Join Date
    Jul 2002
    Location
    NSW Australia
    Posts
    287
    This is really one of the better threads I've seen at WHT for a long time and the newcomers would be well advised to absorb the valuable input from the learned subscribers to the thread.

    All good information and correct to the letter ... the chronic oversellers, I thought, offering 60GB space and 1500GB traffic for 9.99, had all but brought the web hosting industry to it's knees and it's pleasing to see that there are still a lot of us coming out on top - Quality - NOT price!
    HOSTPac Web Solutions
    Solid reliable Hosting - Lowest priced Domains - cPanel Multiple Domain Hosting
    Now offering space on Australian based servers!
    Put the Big Koala on your team

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