Start a Boutique Reseller Hosting Company
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This is one of my favorite ways that I’ve made money online. It also represents a great opportunity to do anything from building a little side income to replacing a full time job.
If you’re at all savvy about the online world, you’ll know that web hosting is one of the most lucrative and therefore competitive online markets.
What you don’t want to do is compete in that market, but fortunately you don’t have to. You can make money in hosting without using pay per click, without paying thousands for an SEO company to try and get you good search engine rankings, without even having a web site!
I Call it Boutique Hosting
The problem with the hosting industry is that there is too much competition. People can’t possibly wade through all the information (most of it refutable or made up or merely opinion) to make a proper decision and find a good hosting company.
The other problem with hosting companies is they want to sign people up for 10 (or even unlimited) websites for $10 a month. While this is great for us Internet business folks, cousin Jim with his daughter’s swim club just wants to host one site, and pay as little as possible.
When I had my last job, I noticed that there were a lot of people asking about where to get a website hosted. So I grabbed a reseller account with Hostgator and began to hand my card to anyone who mentioned the word ‘hosting.’ Before long I had enough customers to more than pay for the hosting on all my other sites.
I realized that there was a fantastic competitive advantage to providing hosting to people via current relationships. Then people started to refer their friends.
What people wanted was just to have some kind of connection to their hosting provider: as a way to filter through the endless possibilities.
I offered my hosting for $5 a month and $50 a year if they paid for a year in advance. Billing can be automated through PayPal. I ran the whole thing off of 2 reseller accounts which cost me $20 each a month. You can easily put 50 low traffic websites on each of these reseller accounts. I was into profit in a couple weeks and continue to receive those payments.
What I found was that new clients needed a bit of hand-holding while they got set up and then I often never had any contact with them again and they continued to pay every month.
Clients Everywhere
With the number of websites exploding, there is a great opportunity to turn offline connections into a decent sized hosting business.
For anyone with even a moderate sized network of friends, having a simple business card with rates and a telephone number would be all that is needed to get started.
Spin-off Profits
If you want to expand the business you can offer domain name registrations (through your affiliate links or even better, your domain reseller account). There are also a lot of other spin-off income streams which can be setup: SEO services, design, software installations.
Potential Pitfalls
The biggest is to become a slave to your clients. Since they are coming to you because of a connection of some kind, they will expect a bit of personal attention. I’d recommend giving them enough TLC to feel like they made a good choice for the hosting, but then to create some clear guidelines about what is included in the hosting service and what is not.
Tips
Before you sign up for your reseller hosting account, make sure you have a domain name in place that you want to use for your company. Most hosting companies will use this domain name as your custom DNS address, so you many even want to get a second name for this purpose.
When I set up my first account I didn’t realize this fact and I used some tacky leftover domain name from a niche site for my sign-up domain. Then whenever I got a new hosing client, in their welcome email it would tell them to step up their DNS with something like:
dns1.bahamas-wedding.net
… yikes embarrassing, but impossible to change. I had to get another account!
The last tip is to not be intimidated if you are not technical, it can be outsourced. In fact the hosting company that you purchase your reseller package from will handle 90% of the support, all you have to do is pass along the requests.
There you go, a complete online business with a very large passive income potential that you can get started for about $50 up front cost and $20 a month.
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Comments ( 6 )
Michael added these pithy words on Jun 09 07 at 6:00 pmGreat article but you didn’t share which hosting companies you’ve found that would be good for reselling. For example, I looked into HostGator’s reseller plan and you have to provide end user support. They will assist you with a problem but not your customers.
I would like to find a reseller package that offers a turnkey package: webpage, billing interface, and pass-through end user support.
Richard added these pithy words on Jun 11 07 at 7:30 amAs a reseller, how much time do you spend on tech support?
I have considered becoming a reseller before. The thought of providing tech support has always held me back. I’ve worked in the IT industry for over 10 years now. I know being a slave to supporting servers is one of the worst kinds of jobs there is. I would rather paint houses then upgrade severs from 12-5 a.m. or get the raging phone calls from customers when there sites are dugg or slashdotted.
Jon added these pithy words on Jun 11 07 at 9:14 am@Michael, I’ve never seen what you are looking for. The only way to get your “turnkey” package is to become an affiliate. Otherwise you want to keep the customer involvement (you can outsource it don’t forget) that way they are YOUR customers. That’s the whole point of going with a reseller business model.
@Richard, you won’t spend any time on tech support. You’ll simply pass it on to the company you purchased your reseller package from. You’ll only need to answer non-technical inquiries, and pass on any ‘real’ technical issues.
Brian added these pithy words on Jun 11 07 at 10:32 amJon, if the customer doesn’t buy a domain, then what address do they get? XXXX.YourDNSregistration.com?
I wonder if you just registering a domain for them (in your name) would be best since then you’re the owner and they’ll be more likely to keep your business relationship.
-Brian
Jon added these pithy words on Jun 11 07 at 10:56 pmBrian. The DNS is for the reseller’s account. All of my clients would have to supply or purchase their own domain. Then they would use my domain (the one I signed up with when I opened the reseller account) as their DNS server address.
“I wonder if you just registering a domain for them (in your name) would be best since then you’re the owner and they’ll be more likely to keep your business relationship.”
No, you don’t want to own your client’s domains. Too messy.
Paul added these pithy words on Jun 19 07 at 1:02 pmMichael
Why not try godaddy.com reseller account. They provide you with everything you said you needed.