Web Hosting Talk : Web Hosting Main Forums : Colocation and Data Centers : Resellers, Yes or No?

[rackguru]

I'm guessing that most here sell colo/dedicated servers. My question is this. If you own/rent your own space at a Center (Equinix, Switch and Data, Telehouse, Built your own, etc) do you allow resellers and if yes/no what are your reasons? I would think resellers would always under cut your pricing, so does the volume really make up for it? What affect good or bad do the resellers have on your margin. Any thoughts would be appreciated.

Thanks

[WII-Aaron]

Currently we don't have a reseller program for a couple reasons.

#1 Our sales aren't exactly hurting. We don't see the need to discount our servers for resellers when we could sell them ourselves, with no problem, at full price.

#2 A reseller's lack of competence or integrity can hurt you. Look at several of the better known resellers that have died recently. AngelNetworkz comes to mind. They resold for TMS and Sago (I think). When they went down there was alot of flak to the providers for it. Better to avoid that.

These reason's don't necessarily mean that we are completely opposed to resellers. I get asked at least five times a day if we have a reseller program and when we are going to get one. We do have some customers that "resell" our servers on a limited basis and several proposals have floated past me in the last year or so.

If you can get a good system in place to manage them, yet keep your distance at the same time, Resellers can provide a good boost for your business. You just need to look long and hard at the systems you have in place for them.

Aaron

[Defcon|Rich]

Reselling is a risk like anything else. There are a few that do it successfully but on the same note there are plenty that get burned. Today's pricing is very different then a few years ago when you have large companies renting servers for under $100 you simply cannot compete unless you have large commitments.

[Joshua]

Originally posted by WII-Aaron
Currently we don't have a reseller program for a couple reasons.

#1 Our sales aren't exactly hurting. We don't see the need to discount our servers for resellers when we could sell them ourselves, with no problem, at full price.

#2 A reseller's lack of competence or integrity can hurt you. Look at several of the better known resellers that have died recently. AngelNetworkz comes to mind. They resold for TMS and Sago (I think). When they went down there was alot of flak to the providers for it. Better to avoid that.

These reason's don't necessarily mean that we are completely opposed to resellers. I get asked at least five times a day if we have a reseller program and when we are going to get one. We do have some customers that "resell" our servers on a limited basis and several proposals have floated past me in the last year or so.

If you can get a good system in place to manage them, yet keep your distance at the same time, Resellers can provide a good boost for your business. You just need to look long and hard at the systems you have in place for them.

Aaron

ANz resold for Managed.com and TMS - They used to resell for BurstNet, and pulled a non-payment stunt on them, as well.

[Dedicatedone]

They resold their dedicated servers or they had colo with them? I remember talking to them about some dual xeons and they told me they owned their own hardware.

[varg]

Yep, AngelNetworkz just resold other people's servers and they were resellers of resellers and resellers of resellers of resellers sometimes.

[aplawson]

I permit reselling, but discount based on the number of servers purchased - not flat discounts, otherwise folks say they are starting to resell servers just to get a discount.

We do pay attention to our successful resellers, but not very closely. Mostly because issues that crop up re how they conduct their own business involves a lot of hearsay, rumors and drama I don't have time for.

Now if they break rules, our TOS or what not, then certainly we get involved. But permitting resellers, in general, is one way to quickly populate your server inventory and I'll always be a fan of the reseller effort. The good ones put in hard work consistently and I can always appreciate that and try to help them succeed - even if that means they take their customers away and start off on their own.

Sorry- in a nutshell; we permit reselling because we appreciate how resellers help US too.

[IRCCo Jeff]

Allowing resellers is an excellent way to drive business assuming you have a well defined policy governing your pricing to the resellers and a good marketing program for helping them succeed.

[Techark]

Yes and no.

I have two customers I give discounts to so they can resell our servers, but they are both long term clients and both have a built in base to resell to.

Other than that to be honest I do not want to expand my business that fast, we are growing so fast as it is I can hardly keep up with it. If I added resellers I would soon be over whelmed and service would suffer.