Pros and Cons of Reseller Hosting Explained

Pros and Cons of Reseller Hosting Explained

Reseller Hosting has had recent growth in popularity within the last year, but very few people actually know or understand what it is. Reseller hosting sounds incredibly complicated at first glance, but in reality, it’s quite simple; however, like all popular trends, it comes with both its pros and cons.

We’ll go through what exactly reseller hosting is and what the pros and cons are that anyone considering starting their own Hosting business should consider.

What is Reseller Hosting?

The official definition of reseller hosting is, “a form of web hosting wherein the account owner has the ability to use his or her allotted hard drive space and bandwidth to host websites on behalf of third parties…the reseller may rent a dedicated server from a hosting company, or resell shared hosting services.” But what exactly does that mean?

source: Wikipedia

In Layman’s terms, think of reseller hosting almost as a sort of real estate exchange in which someone buys a house and then allows people to rent out rooms. In that scenario, everyone would be entitled to their own room and have their own key to come and go as they please, but the owner of the house is still the owner of the house.

Similar to the real estate example, if done correctly, reseller hosting has the potential to bring in big bucks for the owner and even potentially cut costs for the buyer.

Pros of Reseller Hosting

The financial benefits of reseller hosting are definitely one of the top reasons for its current popularity. For people who are interested in getting into the hosting business, they can do so with minimal investment up front so their return has the potential to be greater than in a different industry or business that might have greater costs at the onset.

Reseller hosting plan only cost upfront is really buying the online real estate. Additionally, reseller hosts have essentially minimal tasks when it comes to the aspects of running their business. So when it comes to things like maintaining their server, keeping everything secure, server updates, and all of the other back-end tech tasks, those are all handled by the web host and Web Host Manager (WHM) which is part of cPanel control panel, and the reseller host can focus on running a good business without worrying about all of those other things. Running a business on your own and making a decent amount of money is the primary draw to acquiring a reseller hosting plan.

Reseller hosts can even create their own service plans and packages for clients who might be interested in purchasing multiple domains or hosting more activity on their site than the average buyer or use the reseller hosting plan to host multiple websites, for example a managed cPanel WordPress websites and Magento eCommerce website side by side. All of these aspects make reseller hosting very attractive to a lot of people who are looking to start their own business.

Cons of Reseller Hosting

While at the beginning reseller hosting might sound like a very hands-off way to make money, there is still a lot of work that goes into it. A Host’s business will only be as good as the original web hosting company is. Since the host is purchasing from the web hosting company and then reselling to clients from there, it’s important to buy from a good web hosting company.

If a web hosting company experiences a lot of technical issues or glitches, that won’t be good for the reseller host’s business. Therefore, it is imperative that before starting a hosting business, the resellers do their research on a variety of web hosts to see which one is the right choice. Once a reseller has chosen a web host, it can be very costly to change hosts.

The reseller host could potentially lose clients because it would affect their websites as well. Though it is a more costly option upfront, it’s not a bad idea for a reseller to purchase their own Dedicated Server or Virtual Private Server to avoid all of the technical anxiety that can come with purchasing a basic reseller plan. However, if a new Reseller is not accustomed to running their own server and familiar with the ins and outs, purchasing their own Virtual Private Server or dedicated server and learning how to use it could prove to be a high-stress factor, but that’s the case when full server management option is a must have add-on. 

Additionally, one of the pros of running a hosting business based on a reseller plan is that there are minimal back-end technical tasks; however, running a business does come with customer service and support needs and choosing the wrong web host could result in taking up a lot of time in customer support calls.

How to Start a Reseller Hosting Business

The first step to starting a hosting business is finding a good web host that offers a plan that is both cost efficient and include all technical requirements. After purchasing the initial plan from the web host, the next step is to set up your own web hosting site and create a billing system.

This will be the back-end of the site where you will handle all of the administrative tasks for your future clients. Next, it’s important to create a plan that lays out who your target audience is and how to market to them in order to bring them to your hosting business. Then all that’s left once clients begin inquiring is to set a price and sell your internet real estate.

Once all of these initial tasks are complete, the business will begin to manage itself – outside of the customer acquisition and support.

Conclusion

As with any business, starting your own hosting business is going to take both time and money and success isn’t going to happen overnight. However, if you stick with it, the payoff is definitely there.

In this day and time, the internet is growing at an exponential speed and companies are all feeling a pull towards creating innovative new websites where their current clients and potential customers can learn everything they need to about their brand. Because of the current internet boom, this could be a great time to consider starting a hosting business.

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