Post: #1

Introduction and Basic Info
I spent a lot of time lurking here, and wracking my brain on how to give back to the community. Figured a data sheet was a good start. I'll give a brief introduction about how I got started, and then a run down on how to roll your own reselling business. Hopefully it will be informative, both for the cats that want a profitable side-hustle, and for those who have websites but want to reduce the costs.

A business is born...
I've been making good money over the last few years reselling server space to small businesses and individuals who are looking for cheap hosting. At university I had a side hustle doing web design for students. There were a bunch of entrepreneurial types who were always trying to start blogs or ecommerce sites. I would charge a small fee to get their site up a running. Most of them had zero experience with web hosting or making websites, so they were glad to pay me to do the "technical" work. They would hand over their hosting login and password, and I would set up the site.

After getting frustrated signing into GoDaddy and HostGator and BlueHost, and a bunch of other terrible hosting company interfaces, I decided I could eliminate hassle by getting my own server.

Asking around, I found most of my clients were paying between $5-10 a month for their hosting. After some more research, I realized there were hosting companies that offered servers to resell for around that same price. That's where my current business started.

How it works

When someone wants to make a website, they need the following:

A domain name (~$10 a year)
Hosting (~$5-10 a month, $60-120 a year)

Typically they will go to a big name hosting service like GoDaddy, and pay around $150 a year for the whole package (hosting and domain).

This is a reasonable price, but if you do some legwork, you can offer a cheaper price for better service.

Here's how it works:

1. Get a reseller hosting plan, these run under $20 a month and offer more bandwidth and server space with the added ability to make subordinate accounts on the server.

2. Set up a basic website advertising your services with a PayPal or other recurring payment ability.

3. Sell your extra server space

4. Profit

It's really that simple!

How I do it

I started with a $25/month plan that had enough space and bandwidth to comfortably support 100 medium traffic websites. That's an effective price of around $.25 a month per site. So I went around to my design clients and offered to undercut the price of their hosting if they moved to my server.

They were happy to save 50% a month and I was happy to make $5 each month on resources I was paying less than a dollar for. After a few clients, the server paid for itself, and any additional clients became pure profit.

Once I got a base of clients and some testimonials, I started going around to local businesses and offering to move their websites. I didn't charge anything for the move, and would make sure to undercut the price they were paying for hosting. Since most people never moved past the basic $10 a month GoDaddy plan, it was easy to offer a cheaper alternative.

For most of my early clients, I also offered to do customer support, set up email addresses, do site designs, etc. These are things that you pay extra for on a normal hosting account, but come free with reseller accounts. I realized I left a lot of money on the table in the form of upsells, but now that I have a larger number of clients, I don't offer those services as often.

As I learned more and got more clients, I upgraded to better reseller accounts and eventually started to pay for a VPS and then a dedicated server. As the business has scaled, my cost per client went down, and my profit margin has steadily gotten better. Now it brings in a good amount of money each month with very minimal maintenance.

Start your own

It's really easy to start your own reselling business. If you already pay for hosting for your own website, it can be an effective way to reduce (or even zero-out) your costs.

Go to any hosting site and purchase a reseller account:
I use Lithium Hosting. Full disclosure: that's an affiliate link that will give me around 25% commission (at no extra charge to you) if you buy hosting with them. I use them myself, and wouldn't put it there if I didn't stand by their services. They have great customer support, and a cheap starter plan for $15 a month. There are a bunch of other ones, and all the big names (GoDaddy, BlueHost, etc) have reseller accounts.

Find a few clients:
These can be local business, friends, family, pretty much anyone who needs a website. Since they would have to pay for hosting anyways and usually don't know much about the details, if you make them a good offer they will more likely than not be willing to start with you, or move their site. Even if it's just you and three friends that want to start websites, your costs will be much lower by going with the reseller account.

Profit and scale:
Calculate your average cost per site, and make sure you are making a good profit margin. After a few clients you will break even on the costs of the account. This is an easy way to run your blog basically for free, because you can use your own server while other people pay you for the privilege. Once you are brining enough in to upgrade, upgrade to a better account and you will continue to have room to add clients for awhile.

Conclusion
Coupled with a design or copywritting freelance hustle, this can be a good side gig or full-on business. For me it started as an easy way to make a few bucks, but turned into a more profitable venture than my original freelancing.

If you guys have any questions, drop me a line, or leave a note in the thread. I've been doing website stuff for many years now, so if other members want to chime in with their experiences that would be cool too. If you want some more information on how I found and onboarded clients, managed billing, etc, I can add some more info on those things. If you want to start your own site or buy hosting, PM me, I'll give RVF members a discount or something.

Seriously though, you are better off getting your own reseller account and finding a few guys to pay you. Hopefully this data sheet was helpful and gives some of you ideas.

Post: #2

Hey Good Write Up man,

Ive been researching setting up my own web hosting service doing the same thing you mentioned reselling hosting, and you provided alot of great information.

Im really interested in how you found clients, the payment plans you offer your clients. your billing setup and what payment processors you use. So if you can elaborate more on that I appreciate it.

Post: #3

How much money are you making now? I am asking this since I think web business is a low margin, high volume game. It'll be hard to compete in this space.

Post: #4

Thanks for the sheet bud!

Post: #5

This is legit. I make a small bit of side cash doing this.

If you offer a little more in the way of "support," you can even charge from $50 - $100 a month. Maybe more if you throw the web design in at the beginning.

This is an extremely viable business model.

Beyond All Seas

"The individual has always had to struggle to keep from being overwhelmed by the tribe.
To be your own man is a hard business. If you try it, you'll be lonely often, and sometimes
frightened. But no price is too high to pay for the privilege of owning yourself." - Kipling

Post: #6

Key word is LOCAL.
Local local local.

It's a very flooded market online and we never got much traction by just placing internet ads.

We sold our extra server space too, however 99% of signups and new accounts that weren't direct referrals or local peeps were fraud. You spend all your time chasing down fake users. One way we got rid of a good chunk was to not sell any plans publicly that cost more than $25. My guess is the fraudsters buy something expensive then try to get it reversed back into their bank account?

On a side note, does anyone know good places to advertise to get clients other than what I mentioned?

Post: #7

(07-20-2014 06:47 PM)coolmike Wrote:  Hey Good Write Up man,

Ive been researching setting up my own web hosting service doing the same thing you mentioned reselling hosting, and you provided alot of great information.

Im really interested in how you found clients, the payment plans you offer your clients. your billing setup and what payment processors you use. So if you can elaborate more on that I appreciate it.

Got a few questions about this so I'll try and explain how I did it, then how I would go about it if I was starting again.

How I Started
I had been doing web design and development for people while I was in university. I had a pretty large client list, and still worked with some of them doing site maintenance. My client list wasn't huge, but I had enough good business relationships with people to get started.

That number is a lot smaller than you might be thinking. I probably had about 5 clients in the beginning. Mostly these were friends with websites. Others were guys I had done design work for in the past. These few were paying maybe $3 a month, but they offset the cost of the server space for the first few months.

Meanwhile I went around to everyone I knew with a website and had the following conversation:

"How's your site bro"
"Oh it's good"
"Just curious, how much do you pay per month in hosting?"
"Idk, like $10 maybe. I'd have to look."
"Cool, so how would you like paying $8 a month and having me personally oversee its management."
"Sounds interesting, what would I have to do?"
"Nothing we can sit here and make all the changes on your computer in under 30 minutes"

I basically emailed or cold-called that whole list and offered to cut their hosting price if they moved to my server. Since they knew me, trusted my work from before, and were getting a good deal on hosting, a lot were willing to move over.

That got me my first few dozen regular clients. Then I started going around to local businesses (non-chain restaurants, salons/barber shops, food marts, etc) and seeing if they had a website. If they didn't I offered to set one up for them basically for free if they bought my hosting plan. If they had a website, I asked how much they paid a month in hosting and would cut 20% off that to make an offer.

Most people that have a website don't understand much about how hosting works. They just get the basic hosting plans from the main providers, and pay extra for the one or two upgrades they need.

When you can offer email addresses, blog options, ecommerce, etc all for cheaper than they are currently paying, they will start to listen.

The other thing I did was make it trivially easy for them to move their stuff over. I did all that legwork myself, and sold it as "don't do anything and pay less."

Now I get mostly word of mouth referrals, and have a few other pipelines to get new clients. Once you have a good number, it is mostly about maintaining clients and keeping them happy. At this point, I spend more time on that than on getting new clients.

Starting Again

The number of people that have websites has grown hugely in the past few years. It used to be that only niche types wanted a website. Now, everyone wants a personal webpage. Businesses that don't have one know they need it, but don't have the skills to put up a simple one. I would capitalize on that market, and play the numbers game.

Find all the businesses in your area that don't have websites. Walk in or call them, offer to start a website for $150 a year or something. They don't have to do any work, etc, etc. There are plenty of ways to do this basic process, some more personal, others less so. I like walking in and talking to business owners, and developing a connection with my clients. Then they refer you to their friends. I've also experimented with sending out mass emails, and other similar techniques. These can pay off too, but I prefer the former.

You can get a basic reseller plan for under $20 a month. That will get you up to 20-30 websites easy. To start, go to 4 friends with sites and offer them a super discount on their hosting. Set up their billing to the same account as you pay for the hosting and you are free to build the business. Low overhead and scalable. Everyone is getting a good deal in the end too, so you just pitch the sale that way.

I really think that there are more and more people looking to publish their own websites. Or have a blog, or try their hand at ecommerce. If you ask around, its easy to find people who want to start one. Pitch them a low rate and they will be willing to go in because it seems like such a small investment. Once again, most people don't know how websites work, so getting one up and running seems like magic. Offer it to them cheap with personal service and they will bite more often than not.

(07-20-2014 07:06 PM)roid Wrote:  How much money are you making now? I am asking this since I think web business is a low margin, high volume game. It'll be hard to compete in this space.

I've been making low four figures a month for over a year.

It can be a low margin business, but it depends on how you look at it.

I'm paying around $.50 per site, and could go lower. I sell those same resources with a huge markup. So while it's true that I have to have a large number of clients to make big bucks, you could consider it a high margin, high volume business.

Also, as BB said, you can run a bunch of deals to include other services as an upsell. SEO, emails, customer support, site/server maintenance, etc. can add to the price a customer pays each month.

(07-21-2014 11:37 AM)DJ-Matt Wrote:  Key word is LOCAL.
Local local local.

It's a very flooded market online and we never got much traction by just placing internet ads.

We sold our extra server space too, however 99% of signups and new accounts that weren't direct referrals or local peeps were fraud. You spend all your time chasing down fake users. One way we got rid of a good chunk was to not sell any plans publicly that cost more than $25. My guess is the fraudsters buy something expensive then try to get it reversed back into their bank account?

On a side note, does anyone know good places to advertise to get clients other than what I mentioned?

Going local is key. As I wrote above, that is how I got started.
First it was friends and friends of friends with sites.
Then walked into places that didn't have a website.
Then did more cold call type things.

My best clients are always people I've met in person or someone referred to me by a good client.

You're never going to beat out the big names in the search engines or by people stumbling around looking for hosting online. Thing is, these same people are completely overwhelmed by the process of shopping for hosting. They have no idea what a server is, let alone how to tell the difference between all the available options and plans. They'd rather deal with someone in person that knows what they are talking about and can work with them to set up the site how they want, rather than trying to figure it out on their own on GoDaddy. That's why when I go in, make a quick pitch for a specific price that sounds reasonable to them, they take the deal.

Hope that answered some of your questions. Keep 'em coming. Also for more info on how to advertise, build a client base, and more, I'm working on a relevant datasheet, so I'll put that here when I drop it.

Post: #8

Looks good, thanks

wrt LithiumHosting, their reseller plan looks good, there is a freelancer option at $15 a month, how many websites could you host on this realistically?

If you had 100-200 clients, running small businesses and/or personal blogs with you charging around $10 a month, would it handle that load?

Post: #9

The hosting business on its own is somewhat played out, but combined with another skillset such as designing or copywriting I can see how this could be a powerful combination. The steady income you get from hosting is key.

Great stuff. Many thanks for giving me some ideas! I feel dumb because I already use a reseller account and have been giving it out for free to friends.

Post: #10

Also a question:

There are bazillions of resellers out there. How do you distinguish yourself from others? Going local seems to be a big part of your strategy. Is there anything else to add?

Post: #11

Nice datasheet, thanks!
Would it work with country specific domains (.pl, .de, etc)?
Asking that since godaddy didn't work with them last time I checked.

Post: #12

(07-21-2014 09:24 PM)dreambig Wrote:  The hosting business on its own is somewhat played out, but combined with another skillset such as designing or copywriting I can see how this could be a powerful combination. The steady income you get from hosting is key.

Great stuff. Many thanks for giving me some ideas! I feel dumb because I already use a reseller account and have been giving it out for free to friends.

I agree with this, I did this in 2007 by actually buying a reseller package of ebay and it's a huge market filled with a huge amount of resellers. Now though I would be successful as I have a network of designers who could recommend hosting clients to use my services.

Post: #13

This is cool. I've been considering looking for a host to do a website for someone. This could be a good way to make pocket change over time.

Post: #14

Good Stuff my man! I'm going to start implementing immediately.

I also found another forum that talks all webhosts, and has a category section on setting up a web hosting business. If anyone is interested its called http://www.webhostingtalk.com/

Post: #15

For re-selling, options like Mediatemple VPS and Digital Ocean are good possibilities since they allow you to set up your own server and suit it better to the needs of your client.

Post: #16

(07-21-2014 08:59 PM)2014 Wrote:  Looks good, thanks

wrt LithiumHosting, their reseller plan looks good, there is a freelancer option at $15 a month, how many websites could you host on this realistically?

If you had 100-200 clients, running small businesses and/or personal blogs with you charging around $10 a month, would it handle that load?

The basic option from Lithium will get you 50 sites tops. To get that you will have to cut every site down to minimal space. Doable, but I wouldn't advise it. If one or two sites get large traffic, it will blow out the whole thing. Upgrade to better plans after 10+ clients.

(07-21-2014 09:24 PM)dreambig Wrote:  The hosting business on its own is somewhat played out, but combined with another skillset such as designing or copywriting I can see how this could be a powerful combination. The steady income you get from hosting is key.

Great stuff. Many thanks for giving me some ideas! I feel dumb because I already use a reseller account and have been giving it out for free to friends.

Also a question:

There are bazillions of resellers out there. How do you distinguish yourself from others? Going local seems to be a big part of your strategy. Is there anything else to add?

I've give plenty of server space away for free. Some of those have turned in to paying clients.

Here's how I see going local:

Everywhere I go, I get in to conversations with people about web stuff. It's not something I try and do, at least not always. People are trained to ask banal questions like "What do you do for a living?" that of course get boring answers like "web stuff" and of course that leads to "Oh so and so I know has a site wants a site." I'll run some sales game to find out about their costs and whatnot, then I'll tell them I can set them up for cheaper with a friend. Exchange info, and we go on to other things.

This happens when I travel, when I go out for business, when I meet random people on the street.

There may be a billion options for hosting, but there are even more people that want a website. Also there is a problem with connecting demand and supply. Not in the sense that people can't find a place to host their site. Fear of needing technical knowledge keeps them from even trying, kinda like how guys can avoid learning game. It doesn't take that much technical knowledge to get a website up and running. Plenty of sites have huge followings and are run by guys who don't even know what a server is. But anything more complicated than Google is too complicated for most people, even those that do want websites. So when I offer to solve that problem for a small fee they are grateful if anything.

(07-22-2014 04:10 AM)artur jedi Wrote:  Nice datasheet, thanks!
Would it work with country specific domains (.pl, .de, etc)?
Asking that since godaddy didn't work with them last time I checked.

Country domains you usually have to go through a registrar. Or a site that specifically sells them. Hosting servers and domains are separate things though. Your host can be a completely different company than your domain registrar. You just need to point the domain at your server and you should be good.

(07-22-2014 06:20 AM)bojangles Wrote:  

(07-21-2014 09:24 PM)dreambig Wrote:  The hosting business on its own is somewhat played out, but combined with another skillset such as designing or copywriting I can see how this could be a powerful combination. The steady income you get from hosting is key.

Great stuff. Many thanks for giving me some ideas! I feel dumb because I already use a reseller account and have been giving it out for free to friends.

I agree with this, I did this in 2007 by actually buying a reseller package of ebay and it's a huge market filled with a huge amount of resellers. Now though I would be successful as I have a network of designers who could recommend hosting clients to use my services.

My network from design work got me off the ground. Reselling is a complimentary business to web design and development stuff for sure. Also way more people want their own site or want to make money with a site online. Someone could easily make a good amount of cash just selling to red-pill types wanting to start their own blog. Eg. Roosh says "come join the Roosh-Blog-Network" and gives RoK posters their own site for cheap.

(07-22-2014 09:41 AM)JustJay Wrote:  This is cool. I've been considering looking for a host to do a website for someone. This could be a good way to make pocket change over time.

(07-22-2014 05:27 PM)coolmike Wrote:  Good Stuff my man! I'm going to start implementing immediately.

I also found another forum that talks all webhosts, and has a category section on setting up a web hosting business. If anyone is interested its called http://www.webhostingtalk.com/

(07-22-2014 10:22 PM)HawkWrites Wrote:  For re-selling, options like Mediatemple VPS and Digital Ocean are good possibilities since they allow you to set up your own server and suit it better to the needs of your client.

I think everyone should get a server, it's an indispensable and inexpensive tool. Plus, you can make money with them!

VPS (virtual private servers) are great upgrade option, or even to start if you know how to configure a server. Easy enough to learn, or buy pre-configured one. Actually VPS might be cheaper these days, even when you're starting out.

There are a bunch of options. There is VPS, also you can rent whole servers for resale. Or buy a warehouse on an island with super fast internet and fill it with production-grade servers that you get through questionably legal business deals. Not that I would know anything about that.

If you're into this kind of thing there is a bunch of info online in various places, like that forum coolmike posted. Or ask more questions here.

Post: #17

Looking at the reseller plans that Lithium offers, it looks like a good service, and I can see this being a viable business model using that platform. I do have one question for the OP, since the Lithium documentation is a bit cagey on this point:

How do you handle hosting for clients who want an ecommerce site with SSL? It seems like Lithium has some hoops to jump through in order to get the necessary dedicated IP. Has this been an issue for you?

Post: #18

Also the biggest question I have with this is billing.

How do you bill these small fish without a nonstop nagging headache? I get you can turn their site off at anytime, but I imagine each month billing to be quite the headache.

I do exactly what you are describing for a living but only at a big fortune 500 company. Our clients are other portions of the large company that require all sorts of enterprise level cloud hosting and guess what happens at the end of each month.....

Billing is a goddamn nightmare.

So any insight would be appreciated. Also asked a web dev friend why he doesn't do his own hosting and his response was along the lines of, "Deal with these people for eternity? These small and medium sized clients are beyond needy and will drive you insane. Trust me it's best to get paid and move on until they have another paid need"