Here is a document we publish on our site for resellers that answer such questions :
How do I make money?
Resellers make money in almost the same way as the original service
provider: through the monthly fees paid by the customers. Of course, the reseller has to pay a fee to the original provider, but doesn't have to invest in the equipment or IT staff involved in actually running the facilities. Unlike the original provider, which is paid for the use of its equipment, the reseller is paid for the work it does in setting up the accounts. The customer purchases the service from the reseller, who then purchases the same service from the original provider at a discount. The profit, for the reseller, lies in the discount. For example, if the original service provider offers its resellers over 40% discount on accounts (the same as a 40% "cut" of the service fee), then the money made by the reseller hosting would be determined by the number and size of the accounts it signs up. In the case of a £60 per year shared Web hosting account, if the reseller get only 1 customer a month in his first year, the reseller's cut would be about £720. For example, you the reseller create hosting plans like ours, starting from £60 per year and you get two new customers a month - £60 x 24 customer in 1 year = £1440 in the first year. Your out goings would be the £35 per month reseller fee - £35 - 12 = £420. £1440 - £420 = £1020 in your fisrt year. Infact you would make allot more than this as you are more likey to get 2 or 3 customs a day making £65280 profit ! The more work you put in the more you will make. The actual numbers and percentages involved in reseller plans vary from one service provider to the next, but most follow this basic model. In some cases, the reseller's discount increases with the number of accounts sold.
What do I need to know?
There's probably less knowledge required in being a reseller than you'd think, considering the complexity of Internet Services. As a reseller, though, what you're ultimately avoiding is the physical contact with the equipment, and much of the technical side of things. A reseller's involvement in technical matters can vary from program to program. And the more technically involved the reseller becomes, the more personalized and individual its service will be. But to become involved in the simplest of reselling programs, the level of technical understanding required is minimal. A reseller should have a solid familiarity with the Internet, and a good working knowledge of its operations. The reseller will also need a complete understanding of how to manage and maintain accounts with the service provider whose services it has chosen to offer. Of course, resellers have to market their services, so some experience with marketing and salesmanship will be extremely helpful. If you're planning to run a small do-it-yourself operation, you'll need to be able to run the fundamental aspects of your business, from setting up the Web site, to billing and accounting. And while the level of involvement required by the reseller will vary with different plans, most providers will be willing to offer some instruction in setting up and managing accounts.
What equipment do I need?
As with several other aspects of the business, the amount of equipment you will need to have in order to operate as a reseller will depend entirely on how deeply involved you want to be in the service. As a Web hosting reseller, you can go as far as to buy the server equipment and set up your hosting operations on your own machine housed in somebody else's environment. But at its simplest, the reselling business requires you to own practically no equipment at all. To set up a simple reselling business, all you really need is a computer that you can use to manage the accounts, and a connection to the Internet. And while reseller plans vary, most service providers offer this sort of simple arrangement, requiring the reseller to supply none of the equipment actually used in the hosting operations.
Learn more about what is required to establish a cheap reseller hosting business by searching google.
What do I have to pay for?
What you pay for depends on what types of services you wish to provide. On the most basic level of reselling, you will simply be paid a referral fee for recommending the hosting services of another company, and will therefore not have to worry about paying fees up front.
Once you become a more involved in your reselling, however, you may have to pay fees up front. If you plan to resell domain names as part of your package, for example, you will have to pay a bulk rate for them (which is usually determined by the hosting company or registrar). You can then re-sell these domains at whatever price you wish.
If you offer hosting services from a server that you lease from another Web hosting company, you will be responsible for most fees related to operating a server. These include a set-up fee (although many companies will waive this), a flat, per-month charge, and bandwidth fee if you exceed a certain amount each month. You could potentially have to pay for technical support, too - review your hosting company's Terms of Service agreement to find out. While some will offer you free support, others will charge on a per-incident basis.
What services can I resell?
Most aspects of a Web hosting operation can be resold. What type of reseller you become depends on what you would like to outsource: many hosting companies like to outsource as much as possible so they can concentrate on running the business end of things, and sometimes bundle in additional features a regular hosting company might not be able to provide, like consulting or Web design services. Others, however, take the "hands-on" approach and essentially co-locate servers, giving them much more technical control over their company.
Among the specific services that you can resell are:
* Hosting: Shared accounts, dedicated servers and even co-location space can be resold through most reselling programs.
* E-commerce: Merchant accounts, storefronts and hosting packages specifically geared toward e-commerce can usually be resold.
* Mail servers: Some clients may seek only to have their e-mail capabilities taken care of, as opposed to their Web hosting needs.
Becoming a Web hosting reseller doesn't necessarily mean the only thing you can sell are hosting and bandwidth packages, though. There are other related services you can offer your clients as value-added services. These services, however, are usually resold directly through the search service and not through a Web hosting company.
These can include:
* Domain Names: Domain names and domain name services can be profitable private label service.
* Search engines: Search engine technology and databases can be re-sold and even used as a private-label solution.
* Webmaster tools: HTML optimizers, server uptime monitors other webmaster-related tools can also be sold.
Do I have to provide support?
Becoming a reseller doesn't necessarily mean you have to be responsible for taking care of the technical needs of your clients. How involved you want to become from a support-related point of view is entirely up to you.
Depending on the reseller that you choose, it may be your responsibility to provide technical support, save for high-end issues and server reboots. This means you should have someone on-staff who is familiar with the operations of a server, and who can take care of the technical support needs of all your clients. While this may sound like a big undertaking, consider that most technical support requests (particularly with shared packages) usually involve menial tasks like setting up e-mail accounts, cleaning disk space, installing security certificates, etc..
Who operates this type of business?
The reselling business can include practically anybody who possesses some basic people skills and a working knowledge of how the Internet operates. Reselling operations can be as small as a simple business, run out of a home as a way to make a little extra money on the side. But they include some of the larger service providers in operation today, who simply resell the services of another company in order to cut back on their own hardware and staffing costs. Reselling operations are quite often run by companies already in business providing a related service, such as Web design and Internet consulting, that want to add a service like Web hosting to their portfolio. Other times, though, resellers can simply be people who want to get into the Internet services business, but can't afford to supply the equipment, software, bandwidth and storage space that running such a business requires.
Do I have to tell my customers I'm a reseller?
You don't necessarily have to advertise to your customer that you are operating a reselling business. There are quite a few large hosting customers in the market who don't make it widely known that they resell their Internet services.................
Being a reseller can also be advantageous, and this fact should be conveyed to your customers.
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