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  1. #1

    Pro's and Con's of a Reselling Business

    I'm curious what some of you folks would consider to be pro's and con's of reselling webhosting. I'm doing my homework on the business and any input would be very valuable to me. Thanks!

  2. #2
    Join Date
    Mar 2000
    Location
    San Francisco, CA
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    233
    General Pros and Cons of a Reseller account or Reseller business:

    Pros:

    + Reseller accounts are usually very affordable
    + Account is managed (don't have to worry about server administration or security patches)
    + Create virtual accounts quickly and easily
    + Have access to pre-installed software (no programming knowledge necessary)
    + The easiest and cheapest way to start a hosting company
    + Allows a way to organize all your domains, clients, and possibly your billing.

    Cons:

    - No root access
    - Inability to install/run certain software
    - Account is under a shared environment / resources are shared
    - Quick support can be an issue for your own clients

    Hope that helps
    IceStorm.com - Top Provider of Web Hosting, Reseller Hosting, and Cloud VPS Plans.
    Why IceStorm? Two Words: Proven Reliability.

  3. #3
    Yes i aggree with ice storm!
    i think the major cons are:
    - Sometimes, the potential client may find that you are a reseller and may decide to go with another hosting provider.
    - No root access, which can be annoying if you want to tweak the server you are on.
    - If your clients need something installed on the server or need something important done to the server, you may find it very difficult.

    But overall i think they are good. It gives YOU the oppertunity to test WHM/cPanel before commiting yourself, by buying your own server(s). It is very easy to start up. Also very cheap.

    My 2 cents.

  4. #4
    Good stuff so far. Thanks folks!

  5. #5
    Join Date
    May 2004
    Location
    Baltimore, MD
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    The major bonus to a reseller which most people have mentioned, is the fact that you can focus your time on customer relations and management. No need to worry about managing a server or anything like that, you just get signups, bill them, and then support them. That's about it
    Automated Tendencies - Brand Management Agency from Baltimore, Maryland.
    Reputation Management Search Engine Optimization Pay Per Click Email Marketing

  6. #6
    Join Date
    Nov 2004
    Location
    Maribor, Slovenia, Europe
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    Yes, and when your business grows, you buy your own server and.....

  7. #7
    Join Date
    May 2004
    Location
    Baltimore, MD
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    1,203
    Originally posted by sebydd
    Yes, and when your business grows, you buy your own server and.....
    and... hopefully don't get hacked :x
    Automated Tendencies - Brand Management Agency from Baltimore, Maryland.
    Reputation Management Search Engine Optimization Pay Per Click Email Marketing

  8. #8
    Anybody really can become a reseller.. it doesnt require much skill neither you need to have a big wallet ;-)

  9. #9
    Join Date
    Oct 2002
    Location
    EU - east side
    Posts
    21,913
    Yes, and when your business grows, you buy your own server and.....
    Hire someone knowledgeable and trustworthy to take care of your server?

  10. #10
    Pros:
    - Low overhead (servers, support staff, etc.)
    - High profit margin (depending upon where you host)
    - Personalized Customer Service for your own customers
    - Your focus is on building business and not managing servers
    - you can automate most functions so that customer setup is easy and integrated into your billing apps

    Cons:
    - Constantly on-call for customers
    - Cant access root level of the server
    - have little to no control over applications and programs offered inside the Cpanel
    - shared hosting environments are less forgiving regarding issues of SPAM, high resource usage and other activities that may unintentionally cause server issues


    I do have to make one point clear- Minimalistix said that it doesnt require much skill, and that is a load of crap.

    Your host offers you a certain amount of space so you can manage your accounts. You DO need to know something about internet technologies, DNS, nameservers, domain names, email, and all the other "things" you will be selling to your clients and the features they will be provided with.

    If your clients begin to get wind that all you are doing is passing the buck and calling someone else for help, they will eventually learn to bypass you and go straight to the source.

    I'm not saying that you shouldnt contact your host, but I am saying that you need to know a little bit more than how to get someone's money, and that you should know at least the basics of each function in CPanel so you can answer questions quickly and intelligently.

    You should also keep up on internet news, ecommerce and credit cards, technology laws and stuff like that...

    So much for having "not much" skill...

    LH
    If the web closed at midnight, what would YOU do?

  11. #11
    I'm just thinking aloud ... would packaging domain registration, hosting, site design and maintenance into one, take care of some of the cons of hosting reselling? Meaning the business takes care of the whole aspect of web publishing for the client instead of merely offering hosting?

    Maybe those who had been through this path before would care to offer a word of advice, or my apologies, should I start a new thread?
    "Glory to God in the highest, and on earth peace, good will toward men."

  12. #12
    Join Date
    Mar 2000
    Location
    San Francisco, CA
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    233
    Originally posted by qoheleth
    I'm just thinking aloud ... would packaging domain registration, hosting, site design and maintenance into one, take care of some of the cons of hosting reselling? Meaning the business takes care of the whole aspect of web publishing for the client instead of merely offering hosting?
    It doesn't really take care of the cons of reseller hosting. You still won't have root access and you'll be under a shared environment. However, adding site design and maintenance does add value to your hosting. These days, it's a must to put added value into your hosting services in order to compete.
    IceStorm.com - Top Provider of Web Hosting, Reseller Hosting, and Cloud VPS Plans.
    Why IceStorm? Two Words: Proven Reliability.

  13. #13
    Icestorm is right. Maybe the minimum requirement would be a virtual dedicated server with root access as the starting point.
    "Glory to God in the highest, and on earth peace, good will toward men."

  14. #14
    Join Date
    Apr 2005
    Location
    NSW, Australia
    Posts
    136
    If your just starting out, then its best to start with a reseller account IMHO, at least until you start to get a customer database, at which point you can upgrade to a VPS or Dedi.
    Rob G.
    ShopManager - Sales & Repair Business Management Software

  15. #15
    Join Date
    Aug 2000
    Location
    LaGrange, Ohio
    Posts
    34
    I agree with Rob. When I started in 1999, I was a reseller. Actually, I spent my first 3 years as a reseller. I never really had a problem that was not solved quickly by the host, so I'm not sure root access is that critical when starting out.

    For me, it was a cost issue. I resold accounts until I grew to a size where it was cheaper for me to get my own server. If you are starting out, I would say to start as a reseller to make sure you still want to be in the business.
    Mark Wright
    Wrightsites.com Web Hosting - H-Sphere Hosting on Linux & Windows 2003
    DomainXpress

  16. #16
    How you approach reselling has alot to do with the cons. If you offer a value added service like we did years back it really doesn't matter if a customer finds out you are a reseller.

    Still, Icestorm's point holds. I think if you really want to differentiate your offerings you need to be able to have root access.

    First it teaches you the business technical aspects and it allows you to add applications that make you stand out. Most of the time you can find a VPS pretty close to the price of a good reseller account so you can get the best of both worlds (although with a Vps you have to watch resources and how much your VPS can handle - but then thats part of the business down the road anyway)

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