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Is Reseller profitable?




Posted by ~Lee~, 05-17-2003, 12:52 PM
Most of the posts here seem to be by people who offer themselves as a webhost. To cut straight to the point. Is it profitable? How long have you been running and how many customers do you have, if that question is not cheeky.

Posted by IGS Host, 05-17-2003, 01:39 PM
1 month and a half. Total number of monthly clients: 8 Total number of quarterly clients: 1 Total number of Bi-Annual clients: 0 Total number of yearly clients: 2 Total number of clients: 11

Posted by IGS Host, 05-17-2003, 01:40 PM
we have 9 clients not included there, cause they're on different plans. we have a total of 20 clients.

Posted by Taylor, 05-17-2003, 02:00 PM
IGS, you got those 20 clients within a month and a half? Not too bad, congrats How much effort did you put into marketing? Where? (Don't have to answer of course), etc... :]

Posted by IGS Host, 05-17-2003, 02:19 PM
Yeah, thanks for the congrats. I actually haven't done any marketing at all, not a dime spent on advertising. Some of my clients are bands (I'm into the music scene), some from WHT and some just browse into my website and sign up.

Posted by tlp, 05-17-2003, 02:26 PM
But of course it is..... You pay a small fee, compare it to a standard account. Then you get to re-sell you space at the Price you set. Usaly it takes only 1 maybe 2 accounts to break even. Heck, I might just go re-seller.....

Posted by ~Lee~, 05-17-2003, 02:41 PM
This is what I was thinking and it applies to dedicated server accounts as well. If you have the right appeal (i.e good plans and service) the concentration has always initially got to be "cover prices" So you offer good plans that attract enough people to at least cover your initial outlay for the reseller plan or server then put more effort into marketing the more lucrative plans once you know its not costing you money. Does this make sense?

Posted by SoftWareRevue, 05-17-2003, 02:47 PM
Absolutely. But, if you don't plan on doing it as a true business, you should be up-front about that with your potential clients. That is, tell them it may take 12 hours (or whatever you can do it in) before you may respond to a help request. And things like that.

Posted by ~Lee~, 05-17-2003, 02:54 PM
absolutely, I agree with your comments. I was not suggesting that anyone should take this approach. I was just thinking out the most logical way to start off on a good footing. If you can find a few customers that are taking out plans initially that will cover the cost of your reseller or server prices then although you are not making money as such, you are covering your prices early on giving you time to make sure you grow and provide a complete service without the worry of having to meet prices from your own pocket. A bit thin I know but I am just trying to get my head around the in and outs of hosting and basically not thinking you can be an overnight success. All these things take time, knowledge, comittment as well as hard cash

Posted by IGS Host, 05-17-2003, 03:00 PM
We started as a re-seller because we didn't want to go in a big debt of a dedicated server and then not be able to pay for it and have to close the company. But with what we're doing we're about to get a dedicated server within the next month or so.

Posted by Lesli, 05-17-2003, 03:30 PM
Starting out as a reseller can be a good way to go if: * you don't have the knowhow to administer a server yourself. Perfect example: you've got the business knowledge to run a hosting company, but don't have the accompanying technical knowledge * you're starting out with a smaller budget. You may be able to cover some staffing, marketing, basic business prices; but adding in monthly dedicated server rentals could break you until you get a client base large enough to support that recurring expense

Posted by ~Lee~, 05-17-2003, 03:40 PM
I am still looking around at the differences between reseller and dedicated. It seems to me that 2 examples: Rackshack (dedicated) offers: 1.7ghz, 40gb HD, 400gb transfer 512mb etc...... for $99 per month Unitedhosting.co.uk (reseller) offers: 15gb space, 150gb transfer etc..... for $109 per month Unitedhosting has limited domain hosting etc..... and rackshack does not with theirs. Both use ensim to manage so therefore no real difference there. The main difference as I see it is you get much more for less going dedicated although more technical knowledge is required for dedicated. And ultimately you can offer more to customers while still having to pay around about the same prices and hopefully being in a better position to attract more customers quicker.

Posted by Lesli, 05-17-2003, 04:28 PM
There are reseller programs, and reseller programs. Both free you from the responsibility of administering the server, and thus both can have lower monthly prices. One type sells you a large chunk of disk space and bandwidth, which you may break up / resell any way you choose. Let's call this Type A. Another type has you reselling the web hosting plans of your host provider, rather than reselling disk space or bandwidth allotted to you. Let's call this Type B. Type A reselling can start off with a larger allotment of resources, allowing you to be more flexible in what you can offer clients. You can also choose how to price the different plans independent of any base-cost-per-plan. The disadvantage with this type of plan can be: * larger initial starting cost * once you run out of resources, you have to buy a second allotment - and so you have to pay closer attention to your own resource usages * unwise resellers may oversell far too much, causing crowding on the servers slower response times for all their clients * if you're on a box with other resellers, their overselling activities will impact your clients' performance - thus garnering you an unfairly bad reputation Type B has its own advantages, namely lower potential starting prices than some Type A reseller plans and freeing you from having to calculate server resources within your own pool. Your provider takes care of all of that. You pay for what you or your clients use, you won't ever be stuck in the position of paying for disk space / bandwidth and not having someone to buy it. However, downsides can be: * lack of flexibility in assigning resources and features. You can't create your own plan specs - your provider dictates those, not you. * when you eventually do move to dedicated hosting and you define the plan specs and pricing, you may lose some clients who want to stick with the old plans / pricing structure * moving from reseller space to dedicated hosting is an extra bit of work: either you have to move the files and accounts yourself, or you have to pay another company to do so; or you have to ask them to move the files themselves (and hope that not too many of them decide to leave). In either case, they have to update their DNS records, and may have to doublecheck their various program settings to make sure that they refer to their sites by domain rather than by IP.

Posted by Melitaweb, 05-17-2003, 04:41 PM
A lot of people make good profit being resellers. However I would advise people to think very carefully before rushing to get a dedicated server. It is a whole new game with new rules and lots of ways to lose. Make sure that you have a thorough understanding of Unix. It is not enough to say 'well it has a control panel so I'll be ok'. You may well be alright for a while but inevitably you will need to go deeper into your system. Also a common mistake is for a reseller to get a ded server and transfer all his customers over immediately. This kills a lot of businesses - you have a few of problems and your customers leave you. Suddenly you have no customers and the commitment of a ded server each month. The resellers who make it are ones who run a ded server alongside their reseller accounts until they are comfortable that they are ready. Yes it would mean paying out a few months with little to no return but the investment in time is well worth it. Having said that a lot of people can make more money sticking to reseller accounts and in many many cases expect to make a lot more than your host

Posted by Lesli, 05-17-2003, 05:10 PM
As Melitaweb points out, people who think it through and proceed with caution can do fantastically well as resellers...but it's just as easy to wipe away that success by poorly handling the transfer from reseller to dedicated. In that, being a hosting reseller is just like any other business: know your own strengths and weaknesses, don't use your customer base as guinea pigs, and think things through before doing them.

Posted by UH-Matt, 05-17-2003, 06:27 PM
You cant really compare the two. Reseller accounts are on servers which the host manages. You just need to find customers and use a simple control panel. Anyone can do it. Dedicated servers require management by competant admins... especially if your selling hosting. They are a lot cheaper but require a lot more time and knowledge otherwise you will just end up down/hacked/dead/stuck.

Posted by whtaddict, 05-17-2003, 07:26 PM
If you want to maximize your profit potential, take a look at http://www.dathorn.com/. Excellent quality of service at affordable costs compared to unitedhosting.co.uk. And, dathorn.com offers whm/cPanel which is a far superior than ensim.

Posted by ~Lee~, 05-17-2003, 07:46 PM
I must thank everyone for their comments so far, this has been really helpful. I think the general feedback is stick with my unitedhosting reseller account for now and increase my customer base until such times as I really need a dedicated server. Once I realise the need for a dedicated then take up an offer a few months before to get to grips with it before making a move. I suppose the thing is that once I feel the need for dedicated I dont really need to cancel my reseller account with unitedhosting. I can continue with them but start a fresh dedicated account whereever I can find one. This has been really useful, thanks to everyone but dont feel the need to end the thread here. Keep commenting.

Posted by ~Lee~, 05-17-2003, 07:56 PM
Matt, While I have your attention on this thread. Although I have nothing much on my new unitedhosting account I still have about 10 customers elsewhere and really want to transfer them to my reseller account with you as soon as possible. Alowing for time zone issues I will transfer them in effect overnight to minimize disruption to customer sites. I am hoping allowing for domain transfers and so on that they should be up and running within 24 hours. Do you envisage any issues at your side before I transfer?

Posted by UH-Matt, 05-17-2003, 08:31 PM
We have just completed Ensim PRO upgrades so there shouldnt be any issues our end. Please contact our support team for questions related to UH.

Posted by MirrorZ, 05-17-2003, 10:57 PM
Yes. Webhosting, or any business is profitable if you lay down an intelligent business plan that gives you a competitive edge, and you impliment and follow that plan. If your a businessly challenged - No.

Posted by concreteman, 05-18-2003, 04:18 AM
I started reselling hosting and quickly got a few sites up. A few complaints I had initially were not dealt with in a timely fashion and I gave dude the benifit of the doubt. A few more sites and a few more complaints. Short form of story, dude apparently went belly up and left me to anwer the calls. The deal I was getting was too good to be true and I passed that on to customers. Now dude is gone and I am going dedicated, I have talked to my customers and they are willing to wait and ride it out - good people. I used to admin sco unix and am way scared of f'n things up, but have friends and might even expect help from you reading this (giggle). Moral of the story - research, stay alert, ask for help and if prayer doesn't work there's always medication.

Posted by ~Lee~, 05-18-2003, 07:48 AM
Thank again to all, My Basic plan is to stick with reseller for the time being, I am already asking unitedhosting to shift me up a plan in preperation of me transferring my account to them, once I am in a stronger position to deal with dedicated then I will move across. This site is really helpful, I am glad I found it.

Posted by artied2, 05-18-2003, 08:31 AM
While I have never used Dathorn, I would certainly characterize my experience with UnitedHosting as "excellent quality of service at affordable costs." Artie

Posted by UH-Simon, 05-18-2003, 09:43 AM
Yes a believe whtaddict was a little harsh. He cant really compare the two services as he has never used us. Everyone has a "favorite" host though so his opinion will be valuable to someone im sure.

Posted by ~Lee~, 05-18-2003, 09:46 AM
I refer to my recent thread in regard to unitehosting http://www.webhostingtalk.com/showth...hreadid=144781

Posted by Shannara, 05-20-2003, 04:29 PM
And you have to remember, you do not need ANY Unix experience at all if you go dedicated. Just get a Win2k* system But thats another ballgame as well...

Posted by ~Lee~, 05-20-2003, 04:59 PM
But are win2k systems reliable? I keep hearing that the uptime of win2k is poor compared to redhat.



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