A lot of the major hosting companies are now offering a choice to wannabe hosts.

Option 1.

You can become a full reseller, handling all your clients account queries and technical support.

Option 2.

Act as an agent or affiliate. You have no billing or technical responsibility your purely acting in a sales capacity.

The choice between the two used to be fairly simple. If you wanted to earn a residual income from each sale you made, then become a reseller.

That's all changed, many of the large providers will pay up to 30% per month of the fees they make on a sale you made on their behalf. the longer they keep the customer you referred the more money you make.

So is acting as an agent becoming an easier way to make a living, than reselling? How many resellers can honestly say they're making a 30% return every month?




[Edited by JamesCross on 03-23-2001 at 11:21 AM]

James,

Some hosts have offered that for some time. Not many, but it isn't a new concept.

OOH, as you point out an agent typically doesn't have to deal with billing and tech support issues. OTOH, as a reseller you set your own prices and can make whatever specials you want.

I know that affiliate programs have been around since the beginning of the net, but I'm talking about something altogether different.

The agent, actually owns the customer. They receive monthly statements that let them know all the relevant billing info. If one of their customers upgrades their account the agent gets an increase in their monthly residual income. Even though they have done nothing to secure the increased order value.

If the host is bought by a rival company the agent transfers with them and continues to maintain their customers within the new company.

Yes James. I'm not talking about an affiliate program either. I mean representing the parent company as an agent and getting a residule commission each month for each plan you sell, much like an insurance agent. Not a one-time payment.

We have one and other hosts are coming up with them too. I think it's a good option.

However I disagree with your last line that the agent didn't do anything to secure the sale/upgrade. Very often the sales agent is a webmaster or someone with lots of hosting experience. They consult and advise the customer as to what the features of the plans are, which would be best for their needs and often give at least some development support (referring the more technical stuff to the parent host's tech support). Many write lots of helpful articles and tips for their clients, help them get good search engine rankings, help them get a merchant account etc etc.

This is a very common business model used in the non-cyber world and makes good sense to do it online too.



[Edited by Jaiem on 03-23-2001 at 02:35 PM]

Sorry Jaiem,

I know this type of business model has been around for years, but in the last 6 months we've seen around 30 of the top 150 hosts introduce this type of program.

I didn't mean the agents did "nothing" literally. I'm sure most design/development companies work closely with their clients, and as you said, advise them as to the most suitable upgrade path.

However hosting companies also spend a lot of time advising their clients. The likes of Affinity or hostcentric, have spent a lot of time and trouble designing their systems to help clients chose the right products.

The development of the hosts' site or its customer support lines, has nothing to do with the agent, so if an upgrade is made as a result of the hosts sales team, or special offer within their site they've done nothing to help in the process.

I wasn't trying to say agents didn't earn their commission. I was merely saying that if your deciding on reselling because of the residual income, you might want to think again.

No problem James.

I agree that to be an agent you need should research as many plans as possible as well as know what type of market you plan to service. As you pointed out, while it solves some issues you loose some flexibility.

James it seems that you were reading my mind before I even think of the question. I was barely going to ask this question before I read this post...

Anyways. I have found only one host offering this plan. It is Verio.com does anyone else know of any others that also have an agent program or if anyone knows anything about Verio.com as to how reliable they might be I would appreciate any information.

poruvi,

I'm pretty sure virtualis http://www.virtualis.com/ runs much the same thing - a percentage of sales through banner links etc.

I haven't heard much about them oddly enough, even though they are a pretty big company from what I do hear. Verio does have it critics for being a little lumbering when it comes to running cgi scripts and dynamic content. If you're on a system with them that gets you an ongoing income this is reliant on them staying with the company usually so the quality of the services does play a part.

I can't speak for myself or I'd be breaking the rules but Jaiem's company offers much the same thing as well if I read his site right... I don't think any company would mind if you were an agent for more than one.

Greg Moore

I don't know much about Verio's scheme. Verio currently host our web sites, and have done for over 18 months. However we're now in the process of changing providers, so that might answer your question about them, in a round about way ;-)

Virtualis do offer a more focussed pay per sale program, which we're currently trialing on webhostdir.

The system works by you referring a prospect/sale to virtualis site whereby they log a cookie against the visitor and associate it with your site. If the visitor purchases a virtualis package within 90 days (and hasn't cleared their cookie directory) they will allocate the sale to you. You receive a commission for the sale, plus a residual income for as long as that customer remains with virtualis.

We've only been trialing it for a couple of weeks so I cant give any real in depth feed back yet. I'll keep you posted on how its progressing.

I have looked into virtualis and have actually sent them an email to see if they can anwser some other questions I have.

Thanks for all the info and I will now reconsider hosting with Verio. If they ask me why I will tell them James Cross told me not to... (j/k)

Well thanks again and if you happen to hear about any other hoster that offer this service I am all ears.

We'll be trying out several of these agency systems over the next few months. Our business development manager (chris.hill@webhostdir.com) might be able to point you in the right direction.

We tried the Verio scheme in November and December last year. we gave them some limited banner space within webhostdir, and over 8 weeks referred them around 700 sales enquires. They didn't convert any of them! I spoke to their business manager, and he said that they were only honouring sales made within the first 30 days of the referral. In my experience very few large sales are made within the first visit to a hosts site. Most purchasers will compare several providers and narrow down their selection over a period of time. 30 days is not long enough, they're just taking advantage of affiliates naivety of how the industry operates.

These are my opinions and not those of The Web Host Directory, and relate only to Verio's partner program and not their hosting ability

Just for the record.......

Verio are an excellent company, particularly if your looking for a shared package with the back up and support of a large organisation (for a price). Unfortunately their dedicated server support is now not up to the same standard as many of their competitors. I'm sure that in the long term they'll get it sorted.