rocketgirl
New member
What kind of profit margins can web hosting resellers make? Since it's such a competitive business, I'd imagine resellers would undercut each other and so margins would be thin.
Reselling Profit Margins
- Thread starter rocketgirl
- Start date
That would depend on how big you plan to get. The bigger you get the better the profit will be.
CentralHosts
New member
The margin in most cases will not be that big but depending on what services you are wanting to resell. Some companies will give anywhere from 10-50% back to you for the referral. You just need to find the right company, good luck.
HostOX
Member
I work in 50% profit margins just for servers, mainly our VPS Nodes, our shared I aim for 100% profit, which is possible.
Please do not try to be cheap, trust me, once you build your ground and have what is needed, you ensure your prices are a minimum of £1.50-£3 /mo, you don't want the cheap signups that never return, you want the real users who stay long term and pay a decent price.
People really do underestimate the market, and try to be cheap, don't follow suit.
Please do not try to be cheap, trust me, once you build your ground and have what is needed, you ensure your prices are a minimum of £1.50-£3 /mo, you don't want the cheap signups that never return, you want the real users who stay long term and pay a decent price.
People really do underestimate the market, and try to be cheap, don't follow suit.
HostMantis
New member
The profit margin is probably higher for resellers, but also most likely much harder to sell to experienced users that want to cut out the middle man.
This is great to hear. It's worth doing at those margins.
As to being cheap, I don't see why people do that. But people really do that, and they lose out in the end because they cannot sustain their operations.
rocketgirl
New member
A 50% profit margin is awesome--good job Paul0130! I had no idea reselling could be that profitable; I thought it was a flooded field with low earning potential.
A lot of people posting on web hosting forums would lead you to believe this is a saturated industry. While there is competition, the industry is far from saturated. Sustaining pricing levels is about delivering a perception of value. If you underprice your services, you'll have a much harder time sustaining operations - overprice them and you won't sell as many. And what works for one provider may not work for you. I wouldn't leave any stones unturned - do the forum advertising, article writing, blogs, craigslist, ebay - then figure out what works for you and do it over and over and over until it stops working. Good margins are there for reselling - good luck.
HostOX
Member
A lot of people posting on web hosting forums would lead you to believe this is a saturated industry. While there is competition, the industry is far from saturated. Sustaining pricing levels is about delivering a perception of value. If you underprice your services, you'll have a much harder time sustaining operations - overprice them and you won't sell as many. And what works for one provider may not work for you. I wouldn't leave any stones unturned - do the forum advertising, article writing, blogs, craigslist, ebay - then figure out what works for you and do it over and over and over until it stops working. Good margins are there for reselling - good luck.
Well the way I work on and do think works is, starting low priced, fairly cheap.
Then once you have your first big or medium base of Clients, raise the prices but only to new customers.
This is a good method, once you pass the first year, ensure when you have the reputation, capital and the reviews to say how good your service is, it is time to charge more.
If people say you are good, and your service is good, why not charge more for that amaing service?
People who pay cheap don't stay long, and will be always wanting discounts.
The people who pay more are the ones worth the time and effort, they back you up, stay a while, always pay on time and don't play games.
I must get out to you, do not start at the profit margin of 100%, you may find it very hard to build the base and get the reviews, I started out intending to loose money on some new things I did, then I put the pricing up once I knew my service was good, and had reviews to say so.
In the long run, pricing goes up, just keep working at it, but don't listen to people who say be cheap, forget that, there is money to be made in the industry, and it is down to hard work to get it.
Good luck!
You can also help add to your margins by becoming an affiliate for templates & themes, & other web design, web related software programs.
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Paid Wordpress Theme Designers like DIY Themes and Headway themes offer affilate programs with up to 40% commission. Check out these type programs for additional revenue.
HostOX
Member
Maybe also checkout becoming partnered with providers such as WHMCS, ClientExec, WHMPHP and so on.
We did this, it can add extra profit plus a bonus addon to your service.
And some providers give a link back, it is also something to boast about, making you more unique.
You need to find something unique, we try to offer choice of location, control panel, extra addons etc.
Try to do something that suits.
Rapid-Nick
New member
It's all gonna depend on what you price your plans out. Try to price them so you make money but not to much. It's a give and take. With that also come features? What are you offering? Is it similar to other competitors in your industry.
Crish Bronzs
New member
Re :
Ya, it's not good idea to give discount this time, but in future I think companies will introduce such plans. Because service providers also have big expenses on their equipments and also their management.
Ya, it's not good idea to give discount this time, but in future I think companies will introduce such plans. Because service providers also have big expenses on their equipments and also their management.
We agree with you Steve this market is far from saturated. You have new people entering the market everyday. Their skill level will determine where they get their services from.
As a reseller you get the advantages that there is no overhead, but you also remember you are selling someone else's product.
There are clients out there for everyone, if you find your niche you will make a good living. Remember it is not about the 10.00 you will make today but the 1000.00 or more you will make over the life of the client.
You never know when that small shared client could need a whole rack and still growing. (True story).
One last point about reselling and profit margins, if you are greedy you will get some customers but not many, and like Steve said in his post if you are to inexpensive (affordable), they may not see any value in your services. Hence no customers. You must show value and if you do, your prices can be higher than average but you have to get the customer to see that value.
Good Luck!
It's hard to predict what the margin are because:
1. You just started a hosting business and you want clients ( no profit at first )
2. You just want profit.
What is the real situation ( and there are many more )?
I am currently the General Manager of a new web hosting company what would be some great advice for us starting out.. if you want to know the site just pm me so you can take a look.
I have read what you said above but if you don't have cheaper prices what types of incentives do you offer to get people to use you instead of someone else that is already established?
I have read what you said above but if you don't have cheaper prices what types of incentives do you offer to get people to use you instead of someone else that is already established?
outshinesol
New member
its obviously upto plan how your business plane attrect and growth of your busniess
FirstHosting
New member
it really depends on how much you are paying for your reseller account and how much you are charging to your new clients.
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