Thinking of setting up reseller hosting? Our Reseller hosting Business startup guide will help you get started quickly
If you're thinking of setting up a reseller hosting business - you'll need to make a few decisions. Making the right choices makes the difference between an and ok and a great setup for you. That's why we've written these top tips for as a complete reseller hosting business startup guide - to help you make the right choices about reseller hosting.
Let's start with a bit of histroy about hosting and reseller hosting so that you can understand the reasons for our suggestions.
In the very beginning of the web hosting industry there were two types of web hosting services which were available to end users:
- shared web hosting and
- dedicated servers.
As the market started to grow, more and more people were interested to get their online presence and with that more money has been spent for web hosting services.
That resulted in an increase of the number of companies providing web hosting services as the demand for such services was rapidly growing.
Some of the biggest web hosting companies nowadays were started as one-man-show companies having one server at the beginning which was used to host their own web site and also hosting the web sites of their customers. Many people who could not afford to pay for a dedicated server though and that is how a more affordable solution for web hosting startups was born.
It has been called reseller hosting and that solution allowed the user to allocate space, bandwidth and other resources to his customers, apply a markup on the cost and of course make revenue from their reseller hosting business.
A reseller hosting account is much cheaper since a physical server can host multiple reseller accounts as the user will have to pay just for a part of the resources of the server while he gets the first customers and can afford to upgrade to a dedicated server and continue growing.
The reseller hosting market became really popular about 10 years ago and its market share was rapidly increasing until the VPS hosting was invented allowing the end user much more control than the reseller account at a lower price. At the moment, reseller hosting is still actively being sold and mainly used by web design studios, web developers, people looking to sell web hosting and others hosting their own web sites and friends web sites.
1. Choosing a reseller hosting business startup plan
Let's start our reseller hosting business startup guide with how to choose from differest reseller hosting plans.
This topic has been covered in many articles all over the internet however we couldn’t find an article that covers all aspects and all steps you need to take in order to get the best reseller hosting plan for your needs. In order to know which reseller package will work best you must know what you want to do with it.
- Are you going to start a web hosting company?
- Do you want to host your own web sites?
- Do you need it for fun and testing?
- Do you want to learn programming with it?
If you need the reseller package to host your personal web sites and some friends web sites then it gets easier to make a choice.
It becomes harder if you want to sell web hosting to make money or to host the web sites of your customers in case you have a web design studio. We will cover those two only because if you need it for non-profit use then making a mistake will not be such a big deal. If you use it to sell hosting it becomes different because problems with the hosting service and your reseller account will affect the business of other people and they may take legal action against you.
First of all, if you are going to make money with web hosting you must form a company. This will limit your liability and exposure.
You must find an accountant or hire a company to do the legal work for you.
Then you must prepare your plan about what exactly you are going to sell, who are your potential customers, find your competitors and see what they are doing so that you can do better than them and make customers choose you instead of them.
Get a billing system such as WHMCS and start looking for a reseller hosting plan. Actually, you better get the reseller plan first and then install WHMCS onto it to configure it. There are several questions you need to ask your hosting company to make sure they can give you the features you need to sell web hosting.
Privacy is very important here. You don’t want your customers to understand you are a reseller.
Hosting customers hate resellers. They will not buy from you if they find you are reselling hosting.
Ask your provider if they support 100% private label (or white-labelling) which means they should be using an anonymous domain name for the hostname of their servers, they will give you IP addresses to register your own private nameservers and your clients will not see their name anywhere mentioned in the hosting control panel.
Make sure your provider is active on social networks such as Facebook and Twitter. That will tell you the company is looking to grow and communicate with their client base and potential customers.
They must have a blog regularly updated with unique content at least once per week. Look for statistics about their network, servers, clients satisfaction rating.
If they have a Facebook page check if their customers have left reviews about their experience with the company.
Note that there will always be negative reviews but they shouldn’t be more than 10% from all reviews posted.
Providing live chat technical support will be a big advantage for you as you will be able to contact them instantly and not wait for your e-mail to be responded to.
Test how quickly they respond to tickets and live chats. Send them e-mails at different times of the day to see if the response time-frame is different. Do that multiple times for 4-6 weeks to make sure the company is consistent with their technical support assistance.
2. Do not buy the cheapest reseller hosting plan
In this one of the most essentials things on our reseller hosting business startup guide.
There are thousands of small web hosting companies with virtual servers selling reseller hosting and trying to grow by offering a very low price. For example, when it comes to cheap a hostgator reseller plan and hostgator reseller setup is hard to beat in terms of price. Yet, when it comes to support and uptime, they leave much to be desired. A GoDaddy reseller is also hard to beat, yet again, their reputation has not been great. So you really need to do your homework and ensure you've covered all the technical requirements. You might come upon a hostgator reseller review, which is positive, but don't be fooled quickly and check whether this is a biased opinion towards getting commisions.
The price is important however quality is more important. Keep in mind you will not be able to keep your customers with you unless you provide them the quality they deserve and are expecting to get.
At the end you will pay less for your reseller hosting account but your customers will not be happy and will be leaving your service.
Look for specials instead.
Bigger web hosting companies often run promotions which you can use to get a decent reseller hosting plan at affordable price. It will give you the chance to keep your clients happy and grow so one day you can upgrade and have your own servers with thousands of customers.
3. Use a corporate billing system
If you want your reseller hosting business startup to be a succes, you really need to have an excellent system for handling your billings.
Sign up for a corporate billing system solution to automate the management and support of your customers.
It will allow you to communicate with them easier and you will look much more professional. A billing system will allow you to even activate the orders of your customers automatically. You can’t be 24/7 online to activate new orders and you can’t make clients wait because next time you come online to check for new orders you will find new orders and new tickets asking for a refund because you delayed the activation process.
All reputable hosting companies activate new services within minutes.
The most popular billing system used by hosting providers nowadays is WHMCS.
It comes with a built-in helpdesk so you have a central place to manage your clients and you don’t need to login to multiple systems to handle all operations in your company. It allows you to start an affiliate program for your clients as well and allow them to get money by referring your services to their friends.
4. Provide 24/7 technical support
Another essentials recommendation of our reseller hosting business startup guide is the provision of excellent, 24/7 startup.
Even some of the biggest web hosting companies do not have 24/7 sales coverage but technical support assistance must be 24/7.
You can’t live in this business without 24/7 support.
Since you are starting slowly with a reseller hosting plan and you don’t have a big budget for the start you should find a company and outsource technical support so that whenever any of your customers have a questions there will be someone to answer that question in less than 30 minutes.
If you can’t answer in 30 minutes you are once again behind your competitors and you can’t compete with them for customers.
Once you get enough customers you can start hiring people to work directly for you and slowly remove the outsourced technical support service. That will give you full control. The best support can only be provided by your own staff. No outsourcing company can support your customers better than you.
Never ever lie to your customers. If you do that you will quickly get out of business as customers will leave.
Go above and beyond when helping your clients and they recommend your service to their friends. You will get more customers and the business will grow.
If your server happens to go down and a client complains about the downtime go ahead and give them a credit. They will see you care about their business and you are sharing the loss with them. They will feel you are working with them and not against them and will stay with you forever.
5. Use private nameservers
Let's explain why this is an important part of our reseller business hosting startup guide.
Using private nameservers has tons of benefits. First of all, it makes you look professional.
Second, it allows you to easily switch from one hosting provider to another in case you become disappointed or the service degrades and you have to change the hosting provider.
The private nameservers will give you the chance to migrate all web hosting accounts of your customers without asking them to make any changes from their end.
After the migration the only thing you would need to do is change the nameservers’ IP’s from the ones of the old hosting company to the new IP’s provided by your new hosting provider.
Private nameservers is the first thing to configure after your reseller account is activated and you receive the login details. They are registered at the domain registrar where you registered your domain name. Once the nameservers are registered you also need to add DNS A records for them in the DNS zone of your domain. That can be done from WHM -> Edit DNS zone.
Ask your hosting provider to do it for you if you are not sure how to do it.
6. Install an SSL certificate
Security is an essential part of setting a reseller hosting business or startup.
If you are going to sell web hosting you will have to store the personal details of your customers such as names, addresses, e-mails, credit cards in your billing system on your server.
Your client must feel safe that their personal data is secure and no one will steal it. That’s why you need an SSL certificate which will encrypt the communication between the server and the visitor.
As a result, a 3rd party will not be able to sniff the traffic to steal important information.
It is best to order a wildcard certificate which will protect both your web site and billing system in case you install the billing software on a subdomain such as secure.yourdomain.com.
Another option is to install it at www.yourdomain.com/clients and in that case you can use a cheaper certificate such as RapidSSL. If you want to look more professional though in the eyes of your visitors get an EV certificate. It will add a green bar on the browser and also show your company name.
7. Add trust seals to the footer of your web site
Trust is key to the success of a reseller hosting business startup.
What makes customers trust your web site is the trust seals such as BBB accredited company seal, PayPal seal, McAfee, a seal of a PCI company showing that you have passed all e-commerce requirements for selling online and that you are running a company which is active and verified.
Add pictures of yourself and your staff members to show your potential customers that there are live people behind your web site who they can trust.
Final thoughts and special offer from Scala Hosting for setting up a reseller hosting business startup
If you are just starting with reseller hosting we have negotiated a special deal with ScalaHosting for the visitors of dart-creations.com. That's surely a nice way to end our reseller business hosting startup guide don't you think?