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tan
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Post subject: A Quick Overview of Reseller Hosting  Posted: Sun Jul 26, 2009 10:37 pm |
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Joined: Wed Jul 22, 2009 12:23 pm
Posts: 10
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Reseller hosting is basically the provision of Web hosting services to third-party companies that in turn act as Web hosts for other organizations. To restate, a client will purchase a Web hosting package from a reseller, who stores this website on a parent host’s equipment, where it will be “served” via the parent host’s high speed lines. The reseller from whom a client purchases the package will be the one who interacts with the parent host on the client’s behalf. Payments are made to the reseller and the technical support as well as all associated services required to maintain the client’s site fall into the reseller’s hands.
There are two types of resellers. Agent partners form a partnership with the hosting provider and resell their services for commission. The reseller in this case is known to be representing the actual hosting partner.
The second type is the private label reseller. They resell the services of the parent host but this it is not common knowledge, not advertised and business is transacted as if the reseller is offering services on its own.
So this begs the question: why not just get the hosting package from the parent host and avoid the middleman. Fair enough.
Why Not Avoid the Middleman?
Resellers do not generally operate according to the same business model as hosting companies. Although resellers may market themselves as hosts, they are ultimately a sales and services company, not a technology provider. Resellers do not actually own the server space that they are selling, and their two primary responsibilities consist of recruiting new customers and servicing those accounts once they are established.
Resellers are valuable to hosting companies because they literally are middlemen; they concentrate their resources on sales and support, and the hosting company, freed from the need to employ several customer service representatives, can channel its resources into technology. If resellers could hand off their sales and support duties to the original host, then there would be no reason for the host to even include them in the business model, right? And the bonus, of course, is that the hosting packages are offered at a discount, making this a win-win situation for the customer, reseller and even the parent hosting provider.
Summary
A reseller creates the sales infrastructure to distribute Web packages directly. Resellers can afford to do so at a lower price than the original host might have been able to; in other words, customers of the reseller get an industry-standard Web hosting package at a cut-rate price. The parent host gets a share and the reseller gets his cut as well.
So if you have been thinking about using Web Hosting services, it can definitely pay off to go through a reseller. But the most significant advantage of going through a reseller is customization. Because the reseller is dealing with a relatively small client base - often one that is defined by a specialized interest or market stake - it can (and must) be flexible in meeting the needs of its customers.
Thinking of Becoming a Reseller?
As is always the case, research your hosting companies carefully and methodically determine the services you want to offer. Check references. And before you sign on the dotted line take heed of Alex Lekas’ (reselling guru of AIT.net) expert advice:
Regardless of which company you work with, there are certain things take into account prior to signing an agreement.
Price is just one factor
The bigger question is: what are you getting for your money. Are disk space and bandwidth allotments generous? Are the company’s reseller hosting options one-size-fits-all or is there a tiered pricing structure that accommodates the growth of your business? Do you get 24/7 technical support? (By the way, if the answer here is ‘no’, keep searching.) Does the company’s reseller program allow for private labeling of its plans?
The last point is critical if the business is to be truly yours. Private label means your name and logo appear on your website. If you can’t do that, then you’re not really a reseller, you’re a dealer or an agent, and there is no real advantage in a customer doing business directly with you.
How much profit potential is within the plans?
Every hosting company offers features and benefits. How many of those can you, in turn, resell to your customers? And how many of those involve an upfront cost to you? This is important because any out-of-pocket expense to you means a reduced profit margin.
An ideal reseller program involves packages that include the value-adds the typical online merchant will want, and those additional products are bundled into the monthly fee that you pay. These additional products will be where your margins lie and they will also allow you to create a series of relevant plan options for your customers.
Reselling doesn’t work if all you do is mark up the price of hosting. Sure, you’ll do that but it’s the bolt-on services that are your key to success. Does a customer need additional email boxes? More disk space? Marketing tools? Web site maintenance?
It all comes back to service
Let’s be honest, businesses are not going online so they can spend their time troubleshooting technical issues. That’s what they will pay you for. As you read earlier, the level of service you can provide your customers will be a direct reflection of the service your hosting partner gives.
First of all, technical issues will emerge; IT is not foolproof. As you scout potential companies to buy service from, check out their sites and, in particular, look for information regarding support. Are issues handled by email only or is there a 24-hour hot line? By the way, don’t expect problems to be solved while you’re on the phone; however, being able to reach a live person is a psychological plus. Is there an online ticket system so you can track troubleshooting progress? Does the company have a section on its website where you can learn about minor problems that you can fix yourself?
That’s the quick overview of things to look for. Spend some time looking over the sites of potential partners and ask their reps a lot of questions. And be sure there is a ‘test drive’ or 30-day money back policy before committing. The potential is there; be sure your business is being earned.
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