How much do Web Hosts make?

How much do web hosts make 1

Understanding and learning the web hosts or web-hosting reselling business is not intimidating. Whether you wish to earn some extra money and handle websites for your clients or build a web-hosting business of your own, you can look at it like a real estate business where an apartment is the shared hosting, and the single-family home is the dedicated server.

Let’s find out more.

A broker or a person having a reselling business would be interested in renting out the rooms of your house. Or, they could be interested in running a bed & breakfast. Whatever they choose to do, you make money in the form of rent. The best thing about a reseller web-hosting business is that you can have your new business without the need to have tons of experience or high investment amounts.

However, to succeed, you will have to spend some time learning the techniques and tools. This will be useful in your journey. You will be able to make a business strategy that will have clear steps for long term profitability. Our below guide will help you take your first step.

1. Research

To begin any business, a good amount of research has to be done first. Every good business follows this rule. You need to know about the competition prevalent in the market. You need to understand what makes your competitors successful.

They must be doing something right because of which their business is doing well. And if you are going to compete with successful businesses, you need to stand out to make your mark. Hence, you need to find out a product or service that today’s consumers need that are not provided by your competitors.

2. Make a Business Plan

A reseller account can be opened in just a few minutes by someone wishing to resell web-hosting. Many of these enterprises fail due to the ease with which they can get established. This is because many people when they start a business, have unrealistic expectations from their work, their revenue expectation is unrealistic too, and they don’t have a plan.

You need to understand that customers will just not start pouring in, the minute you start your business. You need to plan every step out. Plan the marketing strategy for your company. Write a good business plan. Check how much investment will be needed to start the business and how much will be needed to keep it running during its first year. There is competition in every field. You need to figure out who your customers will be and what they need that others are not providing.

3. Choosing your Partner for Reseller Web Hosting

Business is not about favourites. So before signing any business deal, pause and think about the business you wish to have and what its immediate future seems. The paths taken by people having different purposes or needs will not be the same. An established web development and design agency may take a different path as compared to the path chosen by the solo hobbyist who is only wanting to host sites of a few of his friends or by someone who wants to start a totally new company for hosting.

Affordability does play an important role. But there are other things that are equally important too. The software, hardware, operating system and perks will decide your customers’ and your satisfaction.

Windows or Linux? Would you like to go for the high-speed solid-state drives or the hard disk drives that are traditional? Would you prefer having scalable resources and added space of a private virtual server, or would you what the shared hosting hands-free support?

When you start, how many clients do you intend to get on board? What will their hosting requirements be? Keep these things in mind while you compare the ratings and reviews of reseller web hosting providers. This will help you find the right plan that meets your budget and criteria. We have listed below the overall best hosts. Each of these hosting providers offers many different plans that will help you in getting started.

4. Building your Hosting Services

Once you know what your customers want, your work is not done. You need to understand from their point of view as to how they feel about purchasing a hosting plan that is totally new. Figure out what features and services you would love to have. Definitely, the price will be the deciding factor, but let’s discuss that later. Check if you would want to go for SSL certificates that are free or automatic backups.  

If you are considering Linux reseller web hosting, you would mostly use WHM and cPanel for overseeing and constructing your web hosting plans. Those having accounts of web hosting from before will know the control panel’s gold standard. As a hosting administrator and reseller, you will get access to WHM, which is its sister concern. WHM stands for Web Host Manger. It helps you in creating cPanel IDs for your customers. It also lets you protect and monitor your server & backup and transfer customer data easily.

However, firstly, you will have to handle the organizational work so that you can set up your business properly. If white-label hosting and nameservers are supported by your hosting provider, you will need to get your branding and logo added to the portals of management. Also, get your nameservers updated. WHM will guide you properly; if not, go to the menu option on the left and click Basic Web Host Manager Setup. After adding your nameserver and contact information, go again to the menu to tweak the cPanel interface options for customization.

Having all that done, you are now ready to give a name to the hosting plans of your company and allocate certain limitations and resources. This can be done by you by clicking Packages in the menu options of WHM. Follow the prompts after that.

5. Setting your Prices and Configuring your  Billing System

When you do business, you expect to earn more money than do charity. You have to decide the charges you will levy for your services. You also need to have a system in place for your customers to be notified about a payment that is due.

Whether you own and run a small business or a big company, your business plan will definitely include who your customers will be, along with a forecast of expenses and sales. When you attach numbers to the goals of your reseller web hosting business, you are able to get an idea of the income that you will earn and about the profits that you will make eventually. How much should a customer be charged is solely dependent on you. And, understanding how to set the right prices for your services or products could be really difficult.

After you have decided upon what prices you would demand, you will need to have a billing system that works automatically. Many of the reseller web hosting plans have cPanel, WHM, and also WHMCS. The latter is an excellent and well known one-stop solution when it comes to invoicing, client management, and also support tools that are all integrated with a centralized platform.

6. Providing Support to your Customers

When you do business, you must remember the customer is the king. For your business to grow well, your customer needs to be happy. You need to make sure to handle their queries and solve them, and that too without making them wait for long. If you do not help your customers, your competitors will. Having a customer support team that will be there to answer your customer queries is very important.

Most customers, approximately 33 per cent of them, like to change companies if they get poor service. We all want value for our money spent. It is not easy to acquire new clients. It is an expensive affair. It is more expensive to get a new client than to retain the existing ones. Hence one should strengthen its client base by attending to their existing customers’ queries and solving them. When you are able to retain your customers, your profits increase. It is seen that if there is even just a 5% rise in the rate of customer retention, the profits could shoot up by 25 to 90 per cent.

Having said that, it doesn’t mean that you have to spend a fortune to get a high-tech system to support your customers. In fact, you could go for WHMCS, which stands for Web Host Manager’s Complete Solution. It helps automate a lot of tiresome steps that you normally would not be able to handle on your own. Payment can be processed by it instantly. It can also have a cPanel account provisioned and send an email to your client with all the information of their new account. All this can be done in your absence. You can sleep while it does its work.

What is even better is that the support tools of WHMCS have a fully-featured platform with reference to email tickets. And it can create a self-aid knowledge base. There are many other tools related to customer support that you could try, especially if you own a small business. They could help you integrating with phone messages, live chat, or even screen sharing. However, WHMCS really can offer a lot to organizations that are smaller that have just started growing.

How Much do you have to Spend to Get Started with a Hosting Company?

When you start a new business, it is very important to manage the costs. The amount that you will spend on your reseller web-hosting will depend on the type of audience you want and on the customer accounts you gain initially. When you are at the basic level, a domain name will be needed. This will cost you approximately USD 10 per annum. Apart from that, you will need web-hosting. This may not demand a huge investment initially, but it will need you to keep adding more later as the time comes.

The following is a general breakdown of the costs you may incur:

Registration of Domain name: USD 10 – 15 per annum

Account for Reseller web hosting: USD 15 – 400 or even more

Template for Website design: USD 100 as a one-time fee

WHM/cPanel license: USD 200 – 425 per annum

WHMCS license: USD 16-40 each month

Account for Domain reseller: USD 50 as a one-time fee

Software for Customer support: USD 0 – 300 each month

Things could get interesting mostly after this. The introductory reseller web-hosting plans are normally set on a shared server. But, you could choose to resell web-hosting resources on dedicated server plans or VPS that are more expensive. Also, you could become a master reseller by reselling the reseller hosting packages.

Apart from that, you will also come across few hosts who use a strategy of alternative reseller web-hosting that allows you to purchase individual accounts of shared hosting for reselling (Hostwinds) or buy credits that you could later redeem to avail different services (SiteGround) or avail discount benefits from a portfolio of alternatives (GoDaddy).

You don’t have to invest more than USD 30 per month if you have a lot of experience in the web-hosting world. But, you definitely will want to launch your professional website quickly. Website themes do cost some money. Even the tools will need to be paid for that we discussed earlier. Hence it is important to select a good reseller hosting plan that offers unlimited and free WHM and cPanel, and also WHMCS. Or else you would end up spending a lot on the licenses.

Conclusion

Our unbiased opinion is that reseller web-hosting business may not be good for beginners who have no experience in this field. Check for legitimate services that can be offered by you to your clients. This will make them see your business as a better deal than what they have already. You will be able to explore new markets, new clients, and new insights that will lead to more innovations. You can also check our article on How to Scan your WordPress Site for Malware?

A person or company reselling web-hosting actually purchases the services from another bigger web-hosting company. It then splits the services it purchased into custom hosting plans. He or she then resells these custom services to their own clients. This business model is similar to the wholesaler-retailer one. It is inexpensive and easy to resell web-hosting. One can make a good amount of profit if the reselling business is planned well.

Choose a Hosting Company

Most web-hosting companies do provide reseller accounts. During your research phase, make sure to find out about web-hosting companies that are renowned. Your business plan should point out hosting companies that will provide you with the best of services for your new business. Contact these chosen few companies to discuss your requirements and your business plan. When you contact them, you will get to know about their professionalism by paying attention to their reply. Time is important. Queries have to be dealt with soon, especially for a web business.

Spread the Word

Once you become a web hosting reseller, the most difficult part is to market your business. You will come across many web hosts on the net today that are selling services. Standing out in the crowd is not easy. Hence, you will need to use every opportunity to help spread the word about your business. Spread this news by using blogs, social networking sites, and message forums online. This will reduce your advertising costs.

A lot of money is earned by web-hosting companies when they sell their server space to businesses and individuals. Today though few hosting companies have their own servers, there are many hosting companies that take a server space on rent from other companies or service providers. This, in simple words, is called “reseller hosting”. What happens here is that the bigger company offers backend services that the end consumer will not be able to see. And, a web-hosting business normally rebrands the rented server space before selling it.

  • Start with creating a business plan for your hosting business. Let it be a general plan. Decide in which market your business will best fit. For example, certain hosting companies try to compete by providing basic hosting services at a lesser price. Then there are those that offer services for website building or provide software support that is specialized. Make a list of the prices and services that your company will be willing to offer. If your company intends to sell different types of services, then split these services into different pricing levels and packages.
  • Know what technical support your company can offer. Helping your customers round the clock by providing phone support can make your customers very happy. But this requires you to have more employees than the basic email support team. Figure out if your reseller web-hosting business will have tech support personnel in-house or if you will need to involve a contractor from outside for the same.
  • A legal business entity needs to be created for your hosting company. You could choose either a sole proprietorship, or corporation, or limited liability company. A sole proprietorship is easy to create. The other two options, however, provide better protection with regard to liability. Go to the office of the County Clerk or to the Secretary of State to fill correct business entity forms.
  • Choose your backend web-hosting provider who can offer you reseller packages. Compare the available packages and websites from different companies. Do this so you can find that one company that can fulfil your general business plan’s needs.

Also, compare the bandwidth and storage space offered by each of these companies. Be sure to check if your hosting provider will provide your users with technical support or if you will have to provide this to your users directly. Hosting businesses that are new normally start with an inexpensive and small reseller hosting package. Their package expands after the company starts growing.

  • Select a payment gateway for your new hosting business. Find out and compare the features & costs of a merchant bank account and payment processors that are internet-based. Check if the payment service accepts payments from credit cards of different banks and can handle recurring customer billing for their monthly subscribers.
  • Create an online presence for your new web-hosting business. Your domain name needs to be registered. This name should be unique and not difficult to recall. You need to build a website on this domain. Or, you could create one by using a hired design service. Site templates that are customizable are offered by many backend web-hosting service providers for this reason. Or, they offer professional design services. Mention the hosting packages you offer along with their respective prices on your website. Do this, taking guidance from your company’s general business plan.
  • Promote your new web-hosting business. You have to market it to help it grow. Contact the local businesses to offer their website hosting services. You could offer services at a discounted rate for the trial phase as an introductory offer. Network with local marketing companies, web design companies, and freelancers. Offer their clients your hosting services. Publish advertisements in newspapers, or use the advertising method of pay-per-click on search engines like Yahoo and Google.
  • Administer and monitor your reseller web-hosting business. This will help prevent downtime of your site and make sure that your clients stay satisfied. Use the hosting backend control panel to monitor the storage amounts and bandwidth frequently. And when needed, contact your hosting provider for upgrading to a bigger package. Make sure to quickly reply to your customer complaints or questions. Also, for solving any technical problems promptly, do consult your backend hosting provider.

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