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Reseller Hosting Questions

by Gec
6 replies
Hey folks, I've developed an interest in reseller hosting as well as other things that I'm investigating at the moment.

I have a few specific questions...

1. If you own a reseller hosting business, how much do you charge your customers, and what services do you offer?

2. If I understand correctly, the standard model assumes that you pay a flat fee to the hosting provider, and you can (theoretically) have an infinite number of paying customers that you "host" on your reseller account. Is this correct?

3. Can you, at some point, sell the whole thing? Have you done it?

Thanks a bunch!
#hosting #questions #reseller
  • Profile picture of the author sminozzi
    Hi,
    It is not a good idea overload the server. I mean, maybe you can put 100 small customers and works fine.
    You can put just one big customer and the server will be overloaded. Depends of the server performance and of the bandwidth usage of the your customer. If your customer make a lot of sql access, can be a problem. Depends also of the other people share the server with you.
    Six years ago i used to have a virtual server of the one company (a lot of people here talk about this company), the server was always overloaded.
    Then, i rent one dedicated server for me (from another company) , my sites can load faster and i have 100% uptime for months. Of course, i need pay more, but i have a very good service. I did this around 5 years ago and i'm happy.
    Regards,
    Bill
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  • Profile picture of the author Dan Thompson
    Originally Posted by Gec View Post

    1. If you own a reseller hosting business, how much do you charge your customers, and what services do you offer?
    What to charge would depend on the clients you are targetting and the value added service that you are offering to them.

    If you are just providing them with the basic hosting experience that they can get from other providers then your prices are going to be similar to what others charge.

    In my experience most resellers tend to be webmasters and use the hosting as an additional income stream from their local clients. In which case you can usually charge more than you would a standard customer since you can throw the hosting in with additional services - website design/maintenance, ongoing SEO work, personal phone support, etc.

    Originally Posted by Gec View Post

    2. If I understand correctly, the standard model assumes that you pay a flat fee to the hosting provider, and you can (theoretically) have an infinite number of paying customers that you "host" on your reseller account. Is this correct?
    Correct.
    Originally Posted by Gec View Post

    3. Can you, at some point, sell the whole thing? Have you done it?
    Yes, if you wanted to "get out" at some point then you'd have no problems in selling up. You'd most likely just be selling your clients rather than the actual company as most hosts would want to migrate your users over to their own platform, but there certainly wouldn't be any shortage of buyers if you had a decent client list and were charging them realistic prices:

    Web Hosting Companies And Clients For Sale or Purchase - Web Hosting Talk
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  • Profile picture of the author Gec
    Super, thanks guys!

    Dan, any idea approximately what would the "clients" sell for? I've read a few threads on the link you sent, indeed there seems to be no shortage of buyers, in fact it seems it's quite the other way around... which is good, for me . But nobody mentions any prices, they all go "NDA this, NDA that..."

    Say (just throwing in some numbers), if I managed to get 100 clients paying $7/month - is there a rough approximate "formula" "out there" ? Like, for example, AdSense sites typically (yes, there are exceptions, but typically...) sell for 10-20 x monthly income - would the same formula apply? Or...?

    Thanks!
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    • Profile picture of the author Dan Thompson
      Originally Posted by Gec View Post

      Super, thanks guys!

      Dan, any idea approximately what would the "clients" sell for? I've read a few threads on the link you sent, indeed there seems to be no shortage of buyers, in fact it seems it's quite the other way around... which is good, for me . But nobody mentions any prices, they all go "NDA this, NDA that..."

      Say (just throwing in some numbers), if I managed to get 100 clients paying $7/month - is there a rough approximate "formula" "out there" ? Like, for example, AdSense sites typically (yes, there are exceptions, but typically...) sell for 10-20 x monthly income - would the same formula apply? Or...?

      Thanks!
      There isn't really a set formula, it's just how much the buyer is willing to pay. We've done a couple of buyouts over the years and roughly look to pay no more than 12 months profit.

      Also whilst it may seem like a piece of cake to get 100 people to pay you $7 pm, in reality it's more difficult than that as Web Hosting is a very competitive, saturated market but saying that the entry point to getting started (cost of a reseller account) is very low so there aren't too many risks associated with it cost wise if it doesn't work out for you.
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      • Profile picture of the author Kingfish85
        Originally Posted by Dan Thompson View Post

        Also whilst it may seem like a piece of cake to get 100 people to pay you $7 pm, in reality it's more difficult than that as Web Hosting is a very competitive, saturated market but saying that the entry point to getting started (cost of a reseller account) is very low so there aren't too many risks associated with it cost wise if it doesn't work out for you.
        ^This. It's summertime now, come fall/winter, there will be 100's of so called "web hosting companies" for sale. Flippa will be littered with "potential to make thousands" after they get in over their heads selling 50 cents a month hosting.

        Unless you plan to do it right from the beginning & stick with it, you'd probably be better off partnering with a small hosting company or becoming an affiliate.

        It's easy to get a bunch of cheap customers however, keeping those customers is a whole different story.
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  • Profile picture of the author dmeirx
    Hey Gec
    i am also using a reseller hosting plan, and it is quite enough for my all employees but as far as i read people on this business are start with reseller then vps then dedicated if you are serious i suggest you to the do the best .... theres is nothing from me to say Thanks Dan he expleained well

    Thanks Engin
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