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  1. #1
    Join Date
    Mar 2002
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    Orcas Island, Washington
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    12

    Question Why resell from a reseller?

    Hi,

    I am a newcomer to the reselling business, and have a few basic questions that I have not been able to figure out from reading the posts so far.

    I see that Voxtreme, McHost and a few others get recommended a lot to new folks interested in becoming resellers. I have also noticed that these companies: (Voxtreme, McHost, etc.) are also themselves resellers of larger companies who run a "real" data center (NOC).

    Most of these big data centers, (burst.net, vdi.net, Pair Networks, etc. offer virtual, dedicated, and co-located services, and if they don't offer virtual accounts, they will be doing this soon.

    So, I am wondering, is there any advantage to being a reseller of a reseller? It seems to me that by doing so, you add risk by having a less direct relationship with the actual data center where your servers are located and maintained. Do you not also run a risk of competing with your up-line reseller who may be more interested in eventually taking your customers than helping you be successful?

    Maybe there is some basic knowledge I still haven’t quite grasped about the business, so please be kind to this newbie and enlighten me…

    All the best,
    Daniel Sheppard
    Ben Sheppard
    Marketing Web Media

  2. #2
    Join Date
    Apr 2002
    Location
    New England
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    409
    You would want to consider price and support. Probably other factors too, but those are the big ones. Why not just run your own NOC? Cut out all the middlemen. Probably because as a newcomer, you want to start small, right? So, if you're not ready to run your own NOC, or even get your own dedicated or co-located server, you want to rent a part of a server from someone. Also, as a newcomer, you're probably even more interested in the level of support that you're going to get. A company that runs a huge NOC may perhaps give less in terms of support to someone with a small reseller account, than a smaller company that has a few servers at a huge NOC. Perhaps they are a middleman, but the value added in terms of higher level of support is worth it in this case. Maybe paying a few dollars more (or maybe even not more) is worth it for the hand-holding. Consider what your needs are, then find the provider that can best fit them.

  3. #3
    Join Date
    Nov 2001
    Location
    London
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    4,931
    Until recently, we leased services who concentrated on dedicated / colo services, and this remains the same with 2 of the datacenters. Pwebtech recently launched mehost.com, which would compete, but much as Pwebtech seem to be setup to cater for these clients, so I'm not sure how well the will handle virtual / reseller accounts.

    As with MCHost, SplashHost, ourselves and other players, I think we all have a good degree of experience in the market we compete in, and new comers such as nocster and mehost may have things to learn in this market.
    Matthew Russell | Namecheap
    Twitter: @mattdrussell

    www.easywp.com - True Managed WordPress, made easy

  4. #4
    Join Date
    Nov 2000
    Location
    Dundee, UK
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    1,366
    Renting a server and then selling hosting is not reselling. Why buy a cake when you can buy the sugar, eggs and flower directly?

  5. #5
    Join Date
    Apr 2000
    Location
    Nevada, US
    Posts
    5,550
    << new comers such as nocster and mehost may have things to learn in this market. >>

    Actually, you're a little off here...
    Our company was started as a virtual hosting and reseller provider...many, many years ago. We have more experience in the reseller field than most of the hosting companies out there...as we started as one ourselves, then began one of the most popular reseller programs ourselves back in the late 90's...prior to focusing mainly on the managed server market in the past two years. Most of the other reseller companies that were around back ten have been bought out, or merged, with others, so very few of us are left that were around this long.


    Sean R.
    BurstNET
    SmartHost™ - Intelligent Hosting! - Multiple Locations - US/EU! - Ultra-Fast NVME SSD VPS!
    http://www.smarthost.net - sales@smarthost.net - Resale/Affiliate Programs
    Cloud Hosting - VPS Hosting - Dedicated Servers - Colocation - Flux Capacitors

  6. #6
    Join Date
    May 2002
    Posts
    235
    Renting a server and then selling hosting is not reselling. Why buy a cake when you can buy the sugar, eggs and flower directly?
    Yep, I would have to agree with Splash Host. What tends to happen is many people start off with a resellers type account (mainly due to cost and support) and then move onto there own dedicated servers once they are more familiar with the hosting market and business picks up.

  7. #7
    Join Date
    Nov 2001
    Location
    London
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    4,931
    Originally posted by BurstNET
    << new comers such as nocster and mehost may have things to learn in this market. >>

    Actually, you're a little off here...
    Our company was started as a virtual hosting and reseller provider...many, many years ago. We have more experience in the reseller field than most of the hosting companies out there...as we started as one ourselves, then began one of the most popular reseller programs ourselves back in the late 90's...prior to focusing mainly on the managed server market in the past two years. Most of the other reseller companies that were around back ten have been bought out, or merged, with others, so very few of us are left that were around this long.


    Sean R.
    BurstNET
    Sean, I'll rephrase it a little - and no offence intended. But after having concentrated on dedicated / colocation services, you may have become a little "out of touch" with the market. It could well be I am totally wrong, and that you are well up-to-date with the market, in which case I wish you the best of luck, but it is still my conclusion that companies who have been targetting the reseller market for some time will 'know' the market a little better.

    Regards
    Matt
    Matthew Russell | Namecheap
    Twitter: @mattdrussell

    www.easywp.com - True Managed WordPress, made easy

  8. #8
    I would have to say that there is a difference here, it may not be clearly visible though.

    For instance, we lease servers and we colocate servers. I guess you could consider the leased servers resold but according to the industry terms used (in these forums and other places) they are not resold. We just consider them the same as a lease of building space.

    If we had a distributor parts business or something like that we would rent the warehouse space but it would "our" building. we wouldn't be a reseller of the space.

    There are different avenues to take in this industry. The people who build the data centers are looking for a certain type of customer, they don't want to sell to every person on the street.

    Then there are people who lease space and locate their own equipment there, or others equipment there. These people will also sell to the end user.

    Then there are people who lease the equipment and split it up and sell it to the masses.

    So really everyone except for the data center owners are resellers. But the DC owners don't always supply euqipment they might just supply space. So it can be complicated at times. The end result is that it gives a lot of variety to choose from.

    Just my $0.02
    Matt Kelly
    WCiT.net
    Managed and Unmanaged
    Budget VPS, Cloud and Colocation

  9. #9
    Join Date
    Mar 2002
    Location
    United Kingdom
    Posts
    46
    I purchase from luxsci.com who purchase from rackspace.com

    It means that I can get the following level of service for my customers at a price I can afford, by only buying the resources that my customers need:

    Reliable hosting on Linux servers with UPS (Uninterruptible Power Supply), UPS backup subsystem with instantaneous failover and diesel generator power backup in a secure facility, with access controlled using biometric hand scanners and military grade pass cards so only authorised technicians and engineers can get near the servers.

    A multi-homed Cisco-powered network with DS3 to OC12 connections through AT&T, UUnet, Qwest, Time Warner Telecom, and SBC provides fast, reliable connectivity with 99.999% uptime.

    HVAC (Heating Ventilation Air Conditioning) system and backup system ensures that all air is circulated and filtered every 90 seconds to remove dust and contaminants from the data centre, and an advanced fire-suppression system is in place to prevent any fire from spreading - in the unlikely event that one could start.

    There is no way that I could afford to own a facility like this, but by reselling for a reseller I can provide the benefits of this facility to my customers, and my customers can afford to buy them because I can deal in small affordable accounts. I don't expect my customers to buy a facility from me, or even a dedicated server if they don't need it. I can happily provide an affordable virtual server, but it is still in the facility described above, so my customers get all the luxuries of managed hosting at the price and scale of virtual or dedicated hosting.
    Last edited by HostFox; 06-17-2002 at 06:54 PM.
    Mike, The Host Fox
    mike@hostfox.net
    http://hostfox.net

  10. #10
    Join Date
    Mar 2002
    Location
    Orcas Island, Washington
    Posts
    12

    Thumbs up

    Thanks for all of your posts! They have been very helpful. I am getting a clearer picture now, and I feel closer to making an intelligent decision…

    As a result of all this great discussion, my mind is now full of more complicated questions.

    I realize a dedicated server would be to much to start out with, and so I see the value of using a reseller provider who is large enough to do this for me in the beginning. Will they be able to provide me with an easy upgrade path for the ultimate flexibility and power I will need in the long run?

    My business model is focused around being a web services based ASP (Application Service Provider), ISV (Independent Software Vender) hybrid. I will ultimately need to have or install a web application server, and database engine, with access to configuration etc. This will allow me to provide the kinds of solutions I will be marketing to my clients. Actually I would like to be able to provide these services from the very start to my first few and small clients!!!

    So, in keeping with that cake metaphor: I like the ease of a ready made cake mix rather than having to create from scratch with sugar, eggs, flower, etc. but, will I be able to customize my cakes with home designed icings of strawberries, kiwi slices and almond shavings etc.?

    I believe I am surfing the wave of a new emerging market out there. The old model of static web design using, php, and perl scripts etc. is being replaced by powerful web service driven media rich applications.

    It is now possible for very small shop solution providers to create very powerful eCommerce, eBusiness web sites in less than 1 or 2 weeks and then offer these complete, branded, media rich, full functional, business solutions at a fraction of what it used to cost a couple of years ago.

    Because of this, there is a growing need for hosting resources that can scale well to provide this functionality at all levels, and a virtual server equipped to run these kinds of custom services for smaller business is going to be more and more in demand since the cost to develop these kinds of sites is well within a small business budget…

    So, as we have already seen from the past, this is just the beginning folks! You ain’t seen nothing yet…

    I hope this stimulates even more interesting conversation!

    Daniel Sheppard
    Ben Sheppard
    Marketing Web Media

  11. #11
    Join Date
    Feb 2002
    Location
    Australia
    Posts
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    Originally posted by voxtreme-matt
    As with MCHost, SplashHost, ourselves and other players, I think we all have a good degree of experience in the market we compete in, and new comers such as nocster and mehost may have things to learn in this market.
    They might be "newcomers" but they have the infrastructure to go well past yourselves and ourselves, very quickly. They're also using economies of scale to get better pricing etc.
    WLVPN.com NetProtect owned White Label VPN provider
    Increase your hosting profits by adding VPN to your product line up

  12. #12
    Join Date
    Feb 2002
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    Australia
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    Originally posted by BurstNET
    << new comers such as nocster and mehost may have things to learn in this market. >>

    Actually, you're a little off here...
    Now that's an understatement!!
    WLVPN.com NetProtect owned White Label VPN provider
    Increase your hosting profits by adding VPN to your product line up

  13. #13
    Join Date
    Feb 2002
    Location
    Australia
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    Originally posted by dshepp
    Thanks for all of your posts! They have been very helpful. I am getting a clearer picture now, and I feel closer to making an intelligent decision…

    As a result of all this great discussion, my mind is now full of more complicated questions.
    Hi Daniel,

    By the end of this thread, you should be well and truly and and in need of a good if you don't go

    WLVPN.com NetProtect owned White Label VPN provider
    Increase your hosting profits by adding VPN to your product line up

  14. #14

    *

    Can I have my cake and eat it too?????????

  15. #15
    Join Date
    Mar 2002
    Location
    Orcas Island, Washington
    Posts
    12

    *

    LOL, That was a good one! I should have thought of that myself much sooner... hmmm, I'm getting much too serious these days

    Daniel

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