- Nov 19, 2020
- by Brad Litwin
Many businesses have already embraced reseller hosting as a way to diversify their income. For others, reseller hosting has helped them launch a new business venture, with minimal setup costs. However, this area can also be hugely competitive.
If you’re going to earn money from reseller hosting, you need to get ahead of the competition. This means offering the right services to the correct customers, with strong branding and a consistent marketing message.
In this article, we’ll cover all of these points. If you’ve been debating whether to start your own reseller hosting business, we have a ten-step plan to turn reseller hosting into a profitable online venture. Let’s get started!
A Brief Overview of Reseller Hosting
As a hosting reseller, you’ll purchase a hosting package from an established hosting provider. You’ll then divide these resources into smaller hosting packages, and sell them to your customers for a profit.
As a business, it’s a bad idea to depend on a single revenue stream. By adding hosting services to your repertoire, you can diversify your income and protect your business against fluctuations in the market. After all, just because your flagship product is in high demand now, doesn’t mean it’ll be flying off the shelves forever.
In today’s market, it’s difficult to think of an organization that doesn’t need a website. If you have an existing customer base, you already have an audience for your hosting services. In this way, reseller hosting can help you maximize your revenue without the added expense of acquiring new customers.
As a reseller, you can generate additional income while also eliminating the upfront costs typically associated with launching a new business venture. This includes purchasing servers and software licenses, and configuring your own network. It also removes many of the ongoing costs, including hiring staff to manage your hosting infrastructure, and repairing broken hardware.
Reseller hosting can be effective for building long-term relationships with your existing customers. Since it’s a subscription-based service, hosting can transform one-off or occasional purchases into loyal, repeat customers. In the best case scenario, reseller hosting will provide your business with a reliable, recurring revenue stream that lasts for years.
How to Make Money With Reseller Hosting (10 Ways)
You now know the answer to the question: What is reseller hosting? Next, let’s find out how you can turn reseller hosting into a lucrative sideline, or even an entirely new business venture. Here are ten tips for making money with reseller hosting.
1. Find Your Relevant Niche
Becoming a successful hosting reseller isn’t about competing with the big hosting providers. These established companies are often in a position to provide highly competitive pricing. They also have the funds to target a large, diverse customer base.
Many successful hosting resellers target a niche audience. By focusing on a specific audience, you can create services, features, and marketing that speaks to the deep needs of your chosen niche.
As such, your potential revenue may be smaller as a niche hosting provider. However, you’re not trying to compete with the big hosting companies. This means your costs should be lower – which is great news for your profit margins.
When deciding who to target, it’s important to find a niche that’s large enough to sustain your business. Here, it may help to use a tool such as Google Trends. Using Trends, you can gauge how many people are searching for keywords related to your potential customer base.
You should also pay attention to the areas where relevant searches are originating. You may be able to increase your appeal, by adding a local slant. For example, if a large number of relevant searches originate from the Florida area, you can incorporate this location into your branding.
2. Plan for Future Expansion
Targeting a niche audience can help you reduce costs, while improving the customer experience. However, if you get too specific, you’ll limit your future growth opportunities.
You may have already chosen your niche. However, before committing to this niche it’s smart to consider future expansion opportunities. One solution is to transition into new niches as your business grows. This might involve expanding into related industries, or related locations.
For example, your business might target local restaurants that require web hosting. This is great for positioning yourself as an expert in the local hospitality industry. However, eventually you may struggle to find new customers who fit this very specific demographic.
In this scenario, you might expand your geographical reach to include restaurants in neighboring cities and states. Alternatively, you might target other segments of the hospitality industry, such as local hotels, gyms, and theaters. When identifying expansion opportunities, it may help to refer to Google Trends.
By planning your businesses’ future now, you can ensure you’re targeting a niche that has growth potential. If you need to adjust your niche, it’ll be far easier to make these changes now, rather than waiting until after you’ve launched your business.
3. Position Yourself in the Market
Once you’ve found your niche, it’s time to identify what they want from a hosting provider. To help you understand the needs of your target audience, you should examine the providers already operating in your chosen niche.
Wherever possible, try to identify at least five competitors who are targeting your future customers. You can then examine the products and services they offer, and their price points.
These are your direct competitors. To stand out from the crowd, you can either offer hosting that’s more budget-friendly, or present yourself as the premium option. Of course, the latter might involve offering more resources, unique features, or a higher standard of customer service.
You should also gauge the size of your direct competitors, and the resources available to them. It’s possible that established providers may already be targeting your chosen niche. In this scenario, you may decide to further refine your target audience. For example, if there’s fierce competition for local e-commerce sites, you could narrow your focus to local affiliate sellers, wholesale retailers, or business-to-business sellers.
4. Choose the Right Hosting Provider
As a hosting reseller, your services are completely dictated by your hosting provider. Choose the right provider for your business, and you’re off to a strong start.
For the best results, you should find a hosting provider that closely matches the resources and features your customers need, without providing any unnecessary added extras. It may be tempting to opt for the provider offering the latest features, or uncapped resources such as bandwidth, memory, and disk space. However, this doesn’t represent good value for money if your customers don’t actually need these features and resources.
If you’re launching a new business, it can be difficult to predict what your target audience might need. Here, it can help to study your competitors. You can also opt for a provider that offers a range of bandwidths.
When choosing a provider, we’d also recommend paying attention to uptime. If your hosting provider’s servers go down, it’ll take all of your customers’ websites down with it. According to Gartner, unscheduled downtime can cost a company as much as $5,600 per minute.
A recent study by Moz also found that intermittent 500 internal server errors can cause issues with tracked keywords. Choose the wrong hosting provider, and your customers may see a drop in their Search Engine Optimization (SEO) after switching to your reseller business.
Wherever possible, we’d recommend opting for a provider that offers an uptime guarantee. You should also check the provider’s reputation amongst customers, including their rating on third party review sites such as TrustPilot.
When you have a network of customers relying on your hosting services, it’s also vital that you can contact your hosting provider 24/7. Ideally, your chosen hosting provider should be contactable via multiple channels, and provide self-help resources including a detailed knowledge base.
5. Create a Strong Brand
Your branding should reflect your chosen niche, and communicate what makes you unique. By creating a consistent message that runs through your entire branding, you can clearly communicate who you’re targeting, and what you have to offer.
By creating a clear, consistent brand now, it’ll be easier to market your business in the future. Strong branding can also help obscure your identity as a hosting reseller.
There are some misconceptions surrounding hosting resellers. Some customers believe they can get a better experience, by cutting out the middleman and purchasing directly from your provider. Other customers may believe that reseller hosting is more expensive, since both the provider and the reseller have to earn a profit.
At A2 Hosting, we provide extensive white labelling functionality. Our resellers can use these features to re-brand all of our A2 Hosting products and services.
Our white labelling options include customizing your customers’ cPanel accounts, your nameservers, and even your billing software. By taking advantage of these features, you can build a strong brand identity.
6. Launch Your Reseller Hosting Business
Once you’ve chosen your provider, the next step is creating your hosting packages. This process can vary, but at A2 Hosting all our reseller accounts include Web Host Manager (WHM) as standard.
WHM is an essential tool for managing any reseller hosting business. You can use WHM to perform important tasks, including creating client accounts, monitoring bandwidth usage – and creating your web hosting packages.
To create a package, log into the WHM console and select Add a Package. You can then specify the resources that you want to include in your hosting package.
You’ll also need a way to get your hosting packages in front of potential customers. If web hosting is a natural extension of your current services, you might add a landing page to your existing WordPress website. It’s possible to create landing pages using WordPress’ built-in features. However, you may find it easier to create beautifully-designed landing pages, using a dedicated page builder such as Elementor.
Another option is to launch an e-commerce store dedicated to your web hosting business. When it comes to selling products and services online, WooCommerce is a hugely popular option.
7. Excel at Customer Support
As a smaller hosting provider, your customer support has the potential to make or break your business. Provide a high level of customer support, and you’ll stand out from your direct competitors – and potentially even the major hosting providers.
Happy customers can be the best way to advertise your business. Today, it’s difficult to think of an organization that wouldn’t benefit from an online presence. In a world where everyone needs web hosting, every satisfied customer could potentially recommend your company to a huge number of people. To grow your business, it’s essential to provide a good customer experience.
The best customer support starts as soon as someone lands on your website. If they have questions then it should be easy for them to get answers. This might involve posing their questions via live chat, or researching the answers themselves using self-help resources such as FAQs.
Ideally, there should be multiple ways to contact your customer support. This might include telephone support, live chat, and a dedicated ticketing system.
Some customers may prefer to find answers for themselves. For these customers, you should provide self-help support. Popular self-help resources include a wiki, or a knowledge base. There are plenty of WordPress plugins that can help you build an effective knowledge base, including Echo Knowledge Base.
However, it’s important not to over-promise and under-deliver. It’s far better to offer a few support options and provide excellent customer service across these limited options, than to offer inconsistent support across all channels.
If you’re an A2 Hosting reseller, you can display information about how to contact customer support, as part of the customer’s cPanel account. This ensures your customers know exactly where to turn if they ever encounter an issue.
8. Connect With Your Ideal Customer
When you focus on a specific niche, you can market your business more effectively. Instead of marketing to everyone (which rarely works), you can concentrate on connecting with a specific target audience.
First, it’s a good idea to determine whether there are any platforms, websites, publications, or other channels that target your ideal customer. These niche channels will usually have a smaller audience, which helps reduce your marketing costs. There should also be a strong correlation between the channel’s audience and your ideal customer. This means the Return On Investment (ROI) for these marketing activities will likely be very high.
9. Do Your (Keyword) Research
Targeting a specific niche also makes it easier to market your business using tools such as Google AdWords. Keyword research can often reveal keywords that strongly relate to your business and target audience, but have very low competition. This can help get your adverts in front of your ideal customer, at minimal cost.
To create Google Ads, you’ll need to sign up for a Google Ads account. You can then access the Keyword Planner, and research keywords that are related to your business. You can also filter these keywords according to search volume and level of competition.
As a smaller or newer hosting provider, we recommend avoiding popular keywords, as these tend to be hard to rank for. Instead, it’s a smart move to focus on keywords that have a decent search volume and low competition.
There are many more factors that go into marketing your business. When creating a marketing plan, it may help to ethically ‘spy’ on your competitors. For example, you can review a competitor’s marketing activities, using tools such as SEMrush or SimilarWeb. This may involve gaining an insight into your competitors’ SEO strategies, and much more.
10. Monitor Your Site’s Performance With Google Analytics
At this point, your website is up and running and you’re actively promoting your hosting services. This is a great start, although to grow your business you’ll need to continuously monitor its performance.
By consulting key metrics, you can identify content, actions and campaigns that aren’t delivering your desired results. You can then remove these activities from your business plan. On a more positive note, you can identify the actions that are delivering the results you want. You can then focus more time and effort into these activities.
You can monitor your website’s performance, using analytics platforms. Using analytics data, you can make more informed decisions about the future of your marketing campaigns, and even the future of your business in general.
There’s lots of analytics platforms that you can use to monitor your website, but Google Analytics is one of the most popular. Platforms such as Google Analytics provide access to metrics that are critical to your businesses’ success, including bounce rate, traffic sources, and conversions.
The sheer amount of data in platforms such as Google Analytics, can be overwhelming at first. To start, we’d recommend focusing on your overall traffic, and time spent on site. These two metrics provide an insight into your ability to attract visitors, and your ability to keep them engaged with your content.
It’s also a good idea to monitor your primary sources of traffic. This can help you identify any third parties or platforms that are supplying you with a significant amount of traffic. You can then invest more time and effort into nurturing these sources.
Turning reseller hosting into a profitable business isn’t always easy. However, many people have already successfully added hosting to their offerings, and have even launched entire businesses dedicated to reselling hosting services.
The ten-step plan we’ve given you in this article is a great start for making money from your new business venture. Of course, identifying a niche audience with lots of room for future growth is one of the first steps to take. Also, building and marketing your brand as a respected hosting provider in your own right is key to success.
As a hosting reseller, the service you provide to your customers is ultimately dictated by your hosting provider. If you’re going to make money with reseller hosting, it’s important to choose the right provider. This will vary between businesses, but we recommend opting for a reseller provider that offers an uptime guarantee, prioritizes performance, and provides 24/7 customer support.
Image credits: Pexels.
How to Make Money With Reseller Hosting
Reseller hosting is a great way to earn extra revenue, but it’s also a competitive industry. These ten tips will help you get ahead of the competition!