Originally Posted by Natcoweb.
Is reselling as profitable as it's spoken about?
Some people think that one of the the easiest ways to begin your web hosting business is to make a decision of buying a reseller plan. Reseller package will suit you in the best way if you already have some customers who are ready to host their sites with your company. So, as soon as you purchase a big slice of server space and bandwidth, you can divide it up and sell on to customers according to their needs. Once you've found a suitable reseller package, decide for you if this plan benefits your potential customers.To do this, you will have to step into customers’ shoes.
For example, if you're going to provide hosting for small businesses, think what you'd want if you had a small business company and needed to host it somewhere: high uptime, lots of features. Moreover, if you want your customers to buy your best hosting plans, you need to compare the prices you set for your hosting packages with the market rates.
Once you've done all that, you'll need to create your own website and advertise it in places where your potential customers can appear.
Here are some examples of the advises given by the users of Webhostingtalk:
Three things you should check with the reseller plan:
Search domain whois to see how old the domain is.
Send pre-sales question to check response time.
Make sure reseller plans are reasonable in terms of price and quota comparing with other providers.”
“No point going with a reseller that is providing you with something that is too good to be true”
A lot of hosts that enable overselling at reseller level limit the number of domains which a reseller can host under one account.So this is better to avoid companies which offer overselling and want to attract attention by unlimited domains in their hosting packages. If every reseller starts overselling without control, it can perform the server load and even downtime. As the reseller accounts are growing day by day, they will try to upgrade their plans in future and that is when things can get really tricky for the reseller hosting provider.
Having a reseller account, you get disk space and bandwidth at a particular price and resell these resources at a higher price. The customers can easily find out your real provider’s name and they can directly go to this company, which will not be a good thing for you. Various methods exist for a reseller host to protect its resellers' anonymity. Private nameservers for example provide the highest level of anonymity and also project an image of professionalism.
The main advantage of a reseller package is that reseller plans are managed by the web host who provides the service to you and you do not have to worry about performing any server upgrades, server administration or security.
But sometimes it can become a disadvantage as you don’t fully control the server. A web hosting who does not keep security up-to-date, or oversells space on the server means that your reseller accounts are affected.Moreover, in case of the server failures, your clients’ accounts are badly influenced by the downtime and you can’t do anything about it as you don’t have control over your server. This is not necessarily a bad thing, but before making an order for a reseller plan, make sure your hosting provider is reliable.