A Synopsis of the Hosting Reseller Business

If you own a website and want to get it hosted on a server, you might contact the hosting company directly or a master hosting reseller. A reseller is an intermediary who sells website space/bandwidth to clients on some other person’s servers. In doing so, the reseller may be acting in any one of the following capacities with respect to the web hosting company:

a) As an agent: In this capacity, s/he is entitled to get a commission from its principle. The reselling business is done in the name of the hosting company. People buy web space or bandwidth directly from the principle.

b) By being the marketer: The name of the hosting company is used to run the business, but the client buys from him. All the future communications are with the web hosting company.

c) Pretends as a host: You buy the web space and bandwidth from the reseller who, in turn, hosts it at a negotiated price with the actual host. Or, the invoice is drawn by the hosting company in the name of the reseller and it gets the cut. In both cases, you would depend on the hosting reseller for further services.

d) As the actual buyer: Acting in this capacity, the hosting reseller purchases some part of the server from the host. Then he can divide these into small parts to sell to each of its clients at a profit. The reseller provides all the support services.

One important point to note is that the issues pertaining to software, hardware, and connectivity are dealt by the main hosting company even though customers are in direct touch with the reseller.

Who is likely to be a hosting reseller?

Website designers, web developers, and systems engineers are most likely to be so who would be interested in offering a complete range of web solutions to clients under one roof. The hosting reseller manages clients via the web interface or ‘control panels’ (Plesk, Helm, cpanel).

Why Is Reseller Hosting Important?

a) Hosting companies can either directly sell or can rent out their capacities for a decent earning.

b) Individual resellers are better placed to pull in more clients within a region in less time. This enables faster sales.

c) It provides a safe business proposition for new entrepreneurs in the hosting arena.

The Drawbacks:

a) The reseller might have to compete with his own hosting company. Obviously, this puts him/her at a disadvantage due to resource constraints

b) The host company is trusted more by clients because the reseller is just a middleman with little or no control over the infrastructure.

c) The rates of the shared, managed, and dedicated hosting service providers have declined substantially making the reseller plans look costly.

d) The new VPS technologies make reselling outdated.

New Avenues: Cloud Hosting

When many opined that reselling is dying out slowly, the new innovation of ‘cloud hosting’ has saved the day for the hosting reseller. In simple terms, under cloud hosting, the website is not hosted on a single server, but on a number of servers. This means that the site is less prone to server crashes and is hosted on a highly scalable infrastructure. So, the customer can now put faith in the reseller.

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