What is Reseller Web Hosting? Reseller Web Hosting Explained – A Beginner Tutorial – Part I of II

December 14, 2009DavidWeb Hosting0

There are three general web hosting configurations for an individual who wants to host a website (or multiple websites): shared hosting, VPS hosting, and dedicated server hosting.

If, however, you want to host websites for other people, reseller hosting may be an option for you. In the reseller hosting model, you still have a web hosting account, but you are given tools that help you manage websites for others.

From a hardware perspective, there are three types of reseller hosting options:
1. A reseller plan on a shared hosting platform.
2. A reseller plan with a VPS (really a VPS with a reseller control panel)
3. A reseller plan with a dedicated server (really a dedicated server with a reseller control panel)

Clearly this decision is based on 1) the number of sites you are hosting and on the amount of resources you need, and 2) what configuration or security customizations do you need. Generally speaking, if you want to make significant customizations (e.g. SSL, remote database access, add/configure certain PHP modules), then you will need a VPS or a dedicated server. The most important consideration is really to look at what you and your clients need, and see what the hosting providers offer.

There are two general resource-usage models for reseller web hosting.
1. You are given a fixed amount of resources, and you divide the resources among your users. . In this scenario you basically have a web hosting plan, with the ability to resell the resources. So when you actually sign up for the plan, you will be looking at the same resource allocations as if you were looking for a hosting plan for yourself. The difference, however, is that you have to consider how much storage, bandwidth, etc that you will need for multiple sites. So here you’d be looking for reseller hosting plans.

In this model you use a control panel such cPanel, which has a special control panel version for resellers.
With cPanel for resellers, you create hosting plans for your clients to use, and assign resources to these hosting plans (e.g. disk space, bandwidth, email accounts, databases). Each client account will have one of the hosting plans you have created (e.g. bronze, silver, gold), and each client account will have access to a client version of the control panel (the client version of the control panel is basically the same version of the control panel that you would use on a shared hosting account).

You do need to consider resources and plan accordingly. For example, if you have 10GB of bandwidth per month with your reseller plan, you need to make sure that your account as a whole does not go over this 10GB. There are many ways to prevent this from happening (and to warn and to charge users for overages) but that discussion is beyond the scope of this article.

So when setting up plans you need to do some thinking. Let’s say you have one hosting plan for everyone, and that plan includes 1GB of bandwidth per month. Technically speaking, if your reseller account has a maximum of 10GB of bandwidth per month, then you should be ok as long as you don’t have more than 10 clients (1GB x 10 users = 10GB/mo).

But what if you have 15 clients and you know that most of your clients don’t come close to using their alloted 1GB of bandwidth per month? Here’s where you can get creative. If you know that you clients are not using their allotted 10GB of bandwidth, then you can gamble a little. There’s nothing wrong with having 15 clients, each with a plan that allots 1GB of bandwidth. The only problem, however, is that if each client decides to use their full 1GB in a month, then you will go over the alloted bandwidth on your reseller account and you will have overage fees on your reseller account. But with proper planning, however, this situation should not occur – especially since you can easily see how much bandwidth (or any resource for that matter) that your clients are using.

If you find that your clients really don’t need to have accounts with 1GB of bandwidth allotted, you could consider reducing the plan so that each client has 500MB of bandwidth, instead. The disadvantage of this approach, however, is that if your competition is offering 1GB of bandwidth for the same price (or lower) you may seem less competitive to potential clients. Even though the clients generally don’t know (or understand) that they don’t need anywhere close to 1GB of bandwidth per month, if you competition is offering “more” than you are, then they will probably go with the competition.

Lastly, one of the best features of this type of reseller hosting configuration is that you can create as many plans as you need — you may have 10 clients that really need a simple plan, but one or two clients that need to have some specific resources allocated. So for the latter clients, you can just create a plan that meets their needs (and your pricing).

2. You disitribute pre-configured plans. This setup is almost like a reseller hosting program vs a reseller hosting plan. In this model, you are more of an affiliate, and you resell hosting plans to your clients. The idea is that you sign up as a reseller (though in this setup I feel as if you are more of an affiliate than a reseller) and the web hosting company discounts their regular plans to you. So if a client comes to you for a hosting plan, you can offer them one of the hosting company’s pre-configured plan at a rate less than retail. Note that in this setup, you may need to pay a setup or yearly fee in order to get the discount.

For example, if the hosting company’s basic plan is $5/mo, they would offer you the plan at $3.50/mo. You then “resell” the plan to your client for $4.50/mo. So the hosting company charges you $3.50, you charge the client $4.50, and you make $1.00.

I don’t like this model because I feel there is little flexibility, and you really need a lot of clients to make it worthwhile (especially if there’s a setup or yearly fee for you).

This concludes part I of this article. In part II of this introduction to reseller hosting,  I will discuss support considerations, branding/transparency, and backups.

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