Maybe you’ve considered building your own hosting business or you are in the research phase trying to determine if it’s right for you. The most common way to get started is by using a reseller hosting plan from an established provider to kickstart your business. There are tons of reseller hosting plans out there that allow you to white label their service and resell their products under your own brand name.
Although it can be simple to get started and there are entire forums dedicated just to reselling hosting like this one, there are some things to consider before diving in head first to determine if this is an ideal business for you. Below we cover some of the common pain points of creating a reseller hosting business and ways to mitigate some of these concerns at the end.
Requires Strong Marketing and Branding Proposition
There are tens of thousands of people trying to make it selling domain names, web hosting, and everything that goes with them. A web hosting business can certainly be lucrative if you have the marketing chops for it. The problem is there are already so many people trying to sell the same thing in a slightly different way. You need to be able to effectively market your services and align on an SEO strategy.
Competing against large, well-funded companies that have deep ad budgets will get you nowhere fast. Ideally you would find a niche like web hosting for dentists or web hosting for lawyers and customize your solutions to help them achieve online success. Word of mouth in your local community is another great way to drive leads and sales.
Web Hosting Has Become a Low-Margin Commodity
At the end of the day, bandwidth and storage are the same no matter where your site is hosted. Some web hosts rate-limit your site or overpacks servers, slowing sites down and you should avoid them but for the most part, storage and bandwidth are the same no matter where you get them. So essentially you are selling something that has a predetermined value. Charging more is harder when the perceived value of a product is fixed.
The vast majority of the hosting industry uses either cPanel or Plesk for their backend control panel with WHMCS as the client billing solution. So, if everyone is using the same billing software, the same customer control panels, and selling essentially storage and bandwidth it becomes much harder to compete in an industry where the value of the product you are selling is already established.
Some web hosts have done a great job of emphasizing differentiating features like customer support that answers in less than 60 seconds. A few of the big players also opt for a custom-built control panel to differentiate their brand.
24×7 Customer Support is Time-Consuming
The majority of customer support questions revolve around billing and password resets. The time consuming requests are usually answering questions non-technical users have about things like setting up an email account or modifying something on their website. You will want to make sure you make your statement of support well-known so customers know what’s included when they reach out to you.
Starting a web hosting business is a great way to create a passive income stream if you can attract customers. It’s similar to becoming a landlord but instead of renting out apartments to people, you are renting out server space for websites. Plus you don’t have the headache of dealing with evictions. You might need to offer non-conventional promotions or features to stand out as the industry has become considerably crowded.
If you’ve carefully considered the challenges and decided to start a web hosting business, we recommend checking out our VPS server hosting plans with cPanel. You can host unlimited websites and bill clients using WHMCS.