Looking at starting a web development business, targeting small business'.
Wondering about the pro's and con's of doing web host reselling, pluses and minuses?
Who do you use, why or why not?
thanks for any input, thoughts or idea.
rodgw

There are a million professional hosting providers out there because anybody with $20 a month can purchase a reseller account. You won't be able to compete with the big boys and you won't get rich.

Most hosting providers will not directly support your clients, so you will have to do what you can for your clients and play middle man for the rest. Be prepared for hacked sites, slow sites, sites not functioning properly, and plain stupidness.

Most hosts will not let you oversell your allocated disk space. So, if you get 50GB of disk space and offer 10GB packages, you can only create 5 accounts. It doesn't matter if the other four accounts are only using 1MB each.

Your reseller account has a bandwidth allocation. Once that's used up for the month, what becomes of your sites? Do you upgrade your reseller account? Many things can use more bandwidth then expected.

Make sure you pay your reseller account each month. Otherwise, all your clients sites go down. Be prepared for an exit strategy when you no longer want to pay for reselling or deal with that hassles.

Be up front with clients. Don't advertise a big professional host that offers unlimited plans, when you rent a VPS that has very real resource limitations. Also, you must follow a service provider TOS and AUP, so have one yourself. Your clients must follow the same rules.

Read the TSO and AUP, and ask questions. Every host is different. Some hosts state they back up their servers daily. What they don't advertise that you are responsible to backup your site from within cPanel and if you want them to restore the site from their back up, it will cost you $25. And some VPS hosts will restore your entire VPS, not individual cPanel accounts. So do your homework.

It's hard to compete with the big boys who offer unlimited for $5-$10 a month when you are limited because that marketing works very well. You might make a few bucks a month but don't quit your day job.

It's ok to host your web clients but when you open it up to the world, you invite any trouble that is out there to act a fool under your hosting account.

Personally, I won't host with anyone who doesn't operate their own hardware. It's not less expensive and the risks are greater.

I think the better option would probably be to set up affiliate accounts with your favorite service providers, or ones your customers would probably want to use. That way you gain a little something for your troubles, but the blunt of the support will come from the company. You "STILL" probably wont get rich from this method, but at least you won't loose your hair (or your sanity and money). Plus, if you ever decide to get out, you won't affect your clients as long as they are paying their bills.

Thanks to both of you,
No, not looking to get rich off of offering help with hosting. I knew before asking the question that wasn't going to happen.
But figuring there are still those out there who don't know how to go about setting up a domain name or acquire a web host.
I figured if I got to walk them down that path, I might as well get something for my troubles . . .
Still investigating, pondering, etc.

Phil's suggestion is excellent: IF you want to offer reselling of the entire hosting plan, giving clients complete control of their server space, do it in such a way that you are not personally responsible for the support and everything that goes with it (GoDaddy will even convert your resold hosting account to stand-alone accounts for your clients if you ever want out of the arrangement).

Toms suggestions are also very good if that is what you are wanting to do; but my advice is don't do it that way. Its a lot of hassle for a very small amount of money and, as these guys have mentioned, the hosting world is very competitive. Plus, you don't want to be responsible for, or have to clean up all the "messes" your clients make of their hosting space/configuration. Just ONE client who isn't tech savvy but trying to do their own design/hosting work can be a full-time job for you in terms of support. They'll call every day (or more) asking questions. And all this for the lousy $2 to $3 per month your making from their account?

The best way to make money by reselling hosting is to design your clients web sites for them, and then offer hosting as part of a monthly "maintenance fee" which includes a certain amount of updates each month (ie-30 minutes). (Of course after their free updates run out, they have to pay your regular hourly wage for coding and design services.) This allows you to inflate the monthly hosting fee; and you'll find some clients will rarely, if ever, even use the free 30 minutes (or whatever) of updates that you offer.

For me, this integrates into a business model that allows me to offer lower up-front costs for the initial design of the web site, which makes me more competitive, and then requires clients to host with me so I can recover some of the money I didn't make on the initial design. Clients who cancel their web site, and stop paying the maintenance fee in less than 12 months are subject to a "termination fee", just like the cell phone companies.

Another benefit of doing it this way is that you don't have to purchase a reseller account. Since YOU are designer, your clients sites are YOUR sites, so not only do you have complete control (no one can mess it up but you!), but you can put all your clients web sites on the same hosting account. You probably won't run into any bandwidth issues with all the "unlimited" plans that are out there, the only thing you have to be concerned about if your piling multiple sites on the same hosting account is concurrent connections, which Tom and I discuss in depth here (look towards the end of the last page):

http://www.coffeecup.com/forums/the-bre … g-service/

I actually, at one time, had an unlimited hosting plan from GoDaddy which cost me $4.85/month (I had a coupon for 60% off a three year term) and was charging five clients each $30 month for hosting/maintenance. So I was turning $4.85 a month into $150.00! I had multiple "unlimited" plans from GoDaddy, though, because I didn't want to use more than 10 sites on each account, fearing I'd run into a concurrent connection problem (which I never did).

PS-When I was with GoDaddy and my clients had support issues, I'd do a three way call with myself, the client, and GoDaddy and they'd offer my clients support that way ;-)

THEN I found Dreamhost, which lets you upgrade a standard hosting account to a VPS in one click AND lets you monitor your resources! So you don't have to guess how much bandwidth your using or how many clients you can fit on one account, the monthly charts show you everything! So that is who I am with currently.

Just an addendum, different hosts have different rules about charging others for their hosting. GoDaddy has nothing in their TOS about this, so you can pretty much do anything you want; Hostgator will not allow you to charge others for their services in any way shape or form, so don't use them for this particular concept; Dreamhost prohibits you from re-selling their hosting to others, but they will allow you to charge your clients a maintenance fee which includes hosting, so you're safe with them if you go with this concept.

If you want to sign up with Dreamhost I have a coupon code that will save you $50 on your first year of hosting! It's: dreamhostsave50

Hope this helps!

You are right. There are some folks who just don't want to bother with it. They want you to do everything for them - just get them a site going. And that's fine to do. A lot of developers do it.

I like Phil's idea of affiliate links. Each sale from HG will get you $50 if I'm not mistaken. It's not recurring, but it's $50 without the hassle. Good luck with whatever you decide to do.

You all have given me stuff to chew on,
thanks for all the input.

Chad,
if I understand you correctly,
You host on Dreamhost for the monthly cost and then ad your customer's domain name under your domain as a sub-domain? Which gives you control of their site that you design and maintain.
What if, they decide to leave you? How do you handle that?
thanks

It's not a sub-domain. it's an add-on domain. When they leave, you just remove the add-on domain and files.

OK, my bad, my head said "add-on" my fingers weren't listening