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Starting a Web Hosting Business as a Reseller

By David Dockhorn

Selecting a Host
Your first step on the way to becoming a web hosting company is to find some mean machines with blazing fast lines hooked up to the backbone of the Internet, that is, after you’ve done some serious business planning and research. You could go the build it yourself route but in today’s fast moving world there is no time to reinvent the wheel which is why we’ll focus on what you need to do to become a web hosting reseller in this article, that is, what you need to do to find a web host with a rock solid data center and a rock solid reputation to go with it to provide you with the hardware, applications and services to get your company online fast. Before you start paying for rack space it would be good if you had a web site to provide your customers a way to find you but you’ ll want to find your web host first, or at least before you finalize your site, so you will know just what you’ll be able to provide to your customers and how much everything will cost. Read on for help on selecting a web hosting provider.Before you start your search you will want to think about how much you want to do yourself and how much you want the web host to do for you, or conversely, how much you want to pay for.
Reseller programs

Figure out what you want to provide and what you want your host to provide you. A web hosting provider with a good reseller program will be able to provide you with automated software that will take care of the billing of your customers, domain name management, network monitoring for the servers they are on, and a control panel your customers can use and one you can use to manage them (often called a Reseller Panel), as well as providing technical support and security. If you want them to do everything for you it will obviously cost you more than a reseller program that leaves it up to you. Take a look at HostBizTools’ directory of web hosting automation software to get a good idea of what these products cost so you will know if you are getting a good deal or not. Remember, however, that purchasing anything ala carte will cost more than all together.

Most web hosts who offer reseller hosting will allow you to offer anything they offer their customers, from extra disk space to web design, to your customers at a rebate so you should make sure they either have everything you want to sell, will allow you to resell it, or sell it yourself in advance. Make a flexible business plan and make sure that your host is flexible too. For example, if you start out using your host’s technical support will you be able to cancel that part of the reseller program to switch over to your own staff or a cheaper technical support outsourcing provider or will your host hold you to paying for it for as long as you’ve signed up for the reseller program? Also, find out what happens if you want to transfer to another host.

Web Host Reputation
After you’ve compared some reseller hosting plans and found some good candidates, read up on your potential hosts before you choose one. Read the Reviews on and see what other customers are saying about them. Double check and see what the folks on a good web hosting forum like have to say about them. Then triple check and run a search for “review host name” on Google and check in the groups tab too. If you check on another web hosting directory or look only at the awards they`ve won on their web site be careful because many times web hosts will buy them as a form of advertising. The web host you choose will be your business partner. If you choose an unscrupulous business partner it will give you a lot of headaches even if you still manage to make a profit so don’t underestimate this step.

Registering a Domain Name for your Site
First, make sure your name and not the host company`s name, is listed as the administrative contact with InterNIC for your domain name. This way you can transfer your domain name to another host more easily. If your host doesn`t provide you with the services they promise and you withhold payment they can hold on to your domain name when you try to transfer it. If the company goes out of business you may also run into problems trying to move your domain name and your whole site could be sold off as part of their bankruptcy estate. Find out how you will handle your customers’ domains as a reseller as well. Some hosts will allow you to private label yourself as a domain registrar so you can register your customers’ domains. You can find a list of domain wholesalers here if you want to do it independently.

Server Access
Make sure to check out what kind of server access you`ll have and how you will be controlling your site. If you have a web-driven control panel it may not allow you to do everything you need to check the servers your customers are using. Also, find out how your customers will be accessing the servers or their websites, i.e. will they be using your host’s control panel or will that all be left up to you? It will depend on if you are simply renting servers in a rack or if you are going with a full service reseller program. For the sake of comparison you can look at some hosting automation software at

How much Bandwidth do you need?
Before you sign on with a new host run some numbers on what bandwidth and other services are going to cost you. The key here is planning ahead and making sure your agreement with your hosting provider is flexible enough to allow you to expand in terms of servers and bandwidth. As a rough index to figuring out how much bandwidth you`ll need use 10 gigs of monthly bandwidth per 500 daily users you expect. Check out how much bandwidth or speed will cost and think about how much it will cost if your company really takes off. Flat monthly rates are better than usage rates. If you suddenly get an influx of customers because of a new product, advertising campaign, or sudden coincidental flood of Google searchers and your usage exceeds your bandwidth usage agreement you may be in for a nasty shock when you get your hosting bill. Some hosts will send you a warning email when you’ve reached 80% of your limit for the month and others will simply let you know when the bill arrives. For your customers’ bandwidth usage it’s not important to work out how much they will use because you will be charging them for it anyway but you do need to think about how you will structure your pricing and make sure it makes sense in the context of what you are paying, especially if they exceed your bandwidth limits.

How Well is your Web Host Connected?
How fast your host`s servers are depends in part on the connection your web host has with the Internet. Many web hosting companies buy their connections from large backbone providers like UUNET. At the very least, they should have T3 lines. You should ask them how they are connected if speed will be a factor for you. They will tell you something like, "We are using T-1/OC-3 lines." i.e., Web hosting companies typically connect to the Internet through "T" (Transmission), "OC" (Optical Carrier), and/or "DS" (Digital Signal) lines. Many smaller web hosts still use T1`s to connect your site to the world at a rate of 1.544 megabits per second. The biggest and fastest hosts use redundant, multiple OC3 (155.52 Mbps) lines to offer their clients the bandwidth they need for multiple user sessions on their site(s).

The best web hosts today use redundant lines to ensure that customers` sites remain up and active, even if their primary Internet connections are temporarily unavailable. It`s a good idea to check which hosts offer backup connections fast enough to maintain your customers sites’ performance in case of a primary line failure.

Of course, as with everything, you pay more for premium service. If you are looking for the cheapest possible start-up you may want to make sure your web host DOESN`T have 24-7 phone support, OC3 lines, or the latest hardware in their data-center. Depending on your target market this may not be that important to you or it may be absolutely critical.

Ask your Host about Branding and Labelling
When you sell your hosting plans you will want to make sure your customers feel that they are buying web hosting services from you and not simply forking over a commission to you, the salesman, for the services of the web host providing you are a reseller of. If they know who you are buying your hosting from they may switch to them as well. Take a look at the marketing and promotion services offered on HostBizTools and you will have a better idea of some of the things your host might be able to do for you or you can do for yourself to promote your business.

Miscellaneous Items
By now, as you get close to deciding on a host, start refining your ideas about your company. What is your mission statement? What products and services will differentiate you from other web hosting companies? What is your target market? What prices are you going to set for what kind of plans? Even if you’ve got elaborate plans already the research you’ve done into your web host may give you new ideas based on what they are offering or don’t have to offer you. A few more things about reseller programs; each reseller program is different and will offer you different options and different requirements. Some offer reseller programs as a big package of services and others allow you to buy what you want ala carte so it’s important to do some comparison shopping and make sure you’re taking advantage of everything you should be getting or making sure you’re getting a good deal if the host’s reseller program you’re considering doesn’t offer much. Here are a few of the things hosts will ask of or offer you beyond the standard set of tools. Some hosts require that you have a minimum level of sales or that you give them a deposit or even pay an enrollment fee and some don’t. Web hosting providers often have promotions or special deals for resellers including things like hosting your web site for free or discounts on Internet service. Other hosts have an affiliate program that will give you a percentage or flat fee of every reseller’s sales that you refer to them. Each hosting company that offers reseller hosting will have a different level of support for their resellers. Some focus on reseller hosting and will include training for you and be able to help you get started and some will leave you on your own. If you know what you’re doing it will just be an added (direct or indirect) cost you don’t want or need but if you’re new to hosting the help getting started might be a good idea.

Whether you are experienced or not in the web hosting game you would be well advised to look at what kind of marketing and promotion tools or documentation the reseller package comes with if any. Once you are ready to select a web hosting provider you will be well on your way to earning your first sales.

Reader's Comments
  Norma Fay Tuesday, February 25, 2014
We actually resell Intermedia’s Exchange Hosting at work. It’s a great way to make a profit. They keep the servers up and running and take care of all the IT demands. They will even help you with sales calls if you want. The best part is you can still make an easy profit and you decide what to charge.
  ann Wednesday, October 17, 2007

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