is reselling over having your own servers more lucrative? I'm guessing reselling costs less but pays you less.

really depends most people who start up hosting businesses usually head down the path of
Reseller > VPS > Dedicated > Multiple Dedicated > Data Center

The benefits of having a dedicated server is that you know what problems you have and when, You can schedule maintenance time and provide more information to your clients it's really up to you.

Although you do have to then secure the sever against attacks and what not. Learning how to do this properly can take days if not weeks.

That all depends on several factors:

Your budget?
Your knowledge of server administration?
Can you provide full time support?

There are many more that I haven't mentioned, but those are a few to consider when choosing to resell or have your own dedicated servers.

Reselling is good for those that don't want to have to worry about administrating servers and providing support.

Having your own servers means more control over your business, but a lot more to worry about.

If you're a start up host it's often better to start off small. Having a full dedicated server whether leased or owned is usually not a good idea unless you already have a well developed client base to fill the server(s).

If you can't afford to have servers because you have no clients on them, can you really afford to be in business to begin with?

Relying on customers to be able to pay your server lease fees, etc. is not good business sense.

If your business model relies on an even, constant flow of new customers in order to pay your bills in the web hosting industry, you're not going to be in it very long.

This industry has had so many ups and downs, you cannot rely on anything.

Well in my opinion, even if you do have the capital to start any business it is wise to go with the option with less overhead. There's nothing wrong with let's say going with a small reseller plan then scaling up to a VPS and eventually dedicated servers.

There are many pros and cons about resellers.

Let go over some simple one's shall we.

Well look at it as if you have a Reseller account your reselling Shared Hosting for a cheaper price than owned a server and paying extra fees for cpanel and addons, Also you Don't need to worry about managing your server keeping it up to date and having everything running at the top nich all you do is reseller web hosting make accounts and answer support tickets, thats mainly it right? Now if you had a server, you would need to pay for control panel, software and always keep updating it.

I don't think so. There are many hosts provide you Reseller package with Unlimited features (you can host unlimited domains, databases, emails etc) with low cost and support to your clients as well.
Having a own server needs own control panel, ticket system, more time, administrator knowledge thus more money.

True, a dedicated server would come with overhead that can actually increase your costs, even in relative terms. A reseller account would mean you can take advantage of your upstream provider's economies of scale.

A dedicated server is not a guarantee of higher profits either. The markup will be influenced more by the market you go for, than where you host your customers. Plenty of resellers can sell their end user accounts for 5-10 times more than other hosts, because they choose to focus their attention on smaller but highly profitable markets. e.g. If you're a musician, you might find that there are lots of other musicians who would like to have a place where they can upload their new creations and share them with the world. I actually recall of someone who "confessed" that they were specializing in creating and hosting escort websites. Not a niche everybody would be comfortable with, but a niche nonetheless.

Hi,

Start first at reseller and maybe once you are profitable and gained experience, move to a VPS first and then to a Dedicated Server if you feel VPS is not enough for your needs.

Regards,
Bobby

I started as a reseller and moved up. The main reason for going with servers of my own was so I could sell shell accounts(IRC, eggdrop, shoutcast, ect), which you can't do on a reseller account.

The path that hostchunk suggested is a good one, especially if you are just starting out in the business. If you have multiple clients already lined up then you could probably skip and start right out with VPS. A lot of this will be determined by your budget and knowledge level.

For people with less knowledge, resellers are good.For others VPS or other root solutions are good

With your own servers you can do WAY much more then a reseller. Resellers are very limited. Also with your own servers you can sell VPSs, resellers and shared hosting accounts. Opposing resellers to only sell shared hosting accounts.

The good thing about resellers are you have someone else manage it. What I did was I started with a reseller and went up ending up with my own servers.

Its a good place to start though.

If you are first starting out in the industry, I'd highly recommend that you start with a reseller package as it is much more economical