This deals with the method of payments in the reseller hosting. Please note that it does not pertain to affiliate accounts but reseller account working under own brand name.

Old Concept.

The reseller would be charged with a monthly subscription for a particular usage of server resources. The parent host while showing generosities, should exercise control through following mechanisms:-

1. Fixing number of domains.
2. Charges to be paid by reseller on “allotted space” and not “used space” of his customers.

*Disadvantages:-

1. These are invariably planned in a way that the reseller would need to run in a chain of continuously upgrading the account before he could reach some level of profit or immediately after reaching marginal profit levels.
2. The other option of keeping higher costs would also limit his marketing.
3. The reseller has to pay fixed amount irrespective of his growth ie number of customers.

** Overselling: Later a trend started where some of the hosting companies started allowing their resellers to oversell means they shall pay on “used space” and not what they allot to their customers.

This brought about tremendous downfall in prices and also caused to old companies to make hue and cry over “overselling” and confusing it with “over usage” (while both have different implications).

Later almost all hosting companies got into race of lower cost and exceptionally high offerings leaving very little for resellers or smaller companies to manipulate in this business thus ending up with.

New Concept

Lately the concept of reseller without any regular upfront payments have started ie the reseller pays nothing to start with, The billing and other mechanisms is:-

1. The customer of the reseller pays to the reseller.
2. The reseller retains his share and pays to rest to the parent company.
3. Every thing done in a billing application ie automatically without hustles.
4. Complete branding and automation.


** Advantage

1. Reseller has nothing to loose here.
2. Unlike the first case he has to pay irrespective of the fact that he has some customer on his inventory or not.
3. Offering normally include domain names and few other applications to reseller like thus a wider scope of sale.


So free reseller offers are the name of the day now which shall sooner or later be replacing other method.

"1. Reseller has nothing to loose here."

Oh Yes He Does

While "Sluggo the Newbie Business Man" figures out how to get his first client, "The Poor Sap" who has to:

- Pay for Rack Space
- Pay for a Server
- Pay for Bandwidth
- Pay for Support for Sluggo

Is left holding the bag each month. Eventually Sluggo might find himself out in the cold again when Poor Sap either:

- Ends his account for non production
- or
- Goes out of business because he was too dumb to fire Sluggo the client.

haha,,

I think we hit a moot point.

Nice analogy.

my question is, if this were possible and functioning..that would be one hell of a custom billing software you would have to use, wouldn't it?

Put it this way. if you are a guy, wanting to start a business and start reselling webhosting services or anything for that matter, whether it be under your own privately held corporation or under the brand you are selling with, you are going to need a strategy and you will have to have your own money. there are no get rich quick schemes. If you are "serious" about going into business for yourself, you better be prepared to spend money and I don't mean crazy amounts, but this is not rocket science. Find a reseller plan that works for you, do your homework and KNOW what you want. It's not about who is cheapest or even who is most expensive, but which company FITS YOUR needs and requirements and also can do the job you want them to.

There are reseller plans out there..decent ones anyway, starting at $25 per mo or less even.. no offense or anything, but that's like 5 grande latte's at Starbucks. If you aren't prepared to fork out that much to start a business, you really should re-evaluate what you are doing.

just my 2 cents.

I agree yourserving. You make an excellent point. These days though I am never surprised at what I read or hear about webhosting!! So many changes have really sent the industry DOWNHILL. Its absolutely ridiculous the rock bottom pricing I see, AND the un-realistic plans for a buck.
For anyone thats been around and involved in the industry for awhile, the whole reseller concept was/is for the "reseller" to get their foot in the door without all the added expense of SERVERS,BILLING,SUPPORT, and all the misc. fees that come with it!!
I do NOT understand providers that offer a reseller account for $10 that comes with UNLIMITED domains, etc. If you browse forums too you end up seeing PLENTY of horror stories about no support/resellers client problems....and on and on and on!
This is where the difference comes into play when you are looking at people who just want a reseller account to load their own domains, friends domains, give free hosting (you name it they will think of something)
People that are actually SERIOUS about their web development business REALIZE that their upstream HAVE REAL EXPENSES! Our setup is pretty similar to what its always been, with our smallest plan being 50MB!!!!! The reseller program is set up like so:
A plus plan costs more per month but then they add resold plans at a discount (NOT FREE!!)

This is precisely what the new concept is not doing. The "Sluggo the Newbie Business Man" has nothing to pay for while waiting for his first customer. No Rack space, server fee, nothing to pay, he pays only when he creates a customer. It is on account to account basis not a fixed amount. Please see the billig cycle explained in the post above.

It works pretty simple, yes you have some customization to do. Yuo get a ready made web site with all the things integrated. You just need to fix pricing and add you Payapl account and add you logo etc.
Mind you I have not mentioned that it is free, its only that you do not have to pay for the reseller fees upfront.

Hi, it is not based on rock bottom prices nor on absolute free run. The major variation is that you pay on account to account basis. The concept is to make reseller as business partner and not charge him for hosting nothing. Once a reseller gets a customer and gets the money from him, he pays some of it as share to parent company.

I think one needs to have a look at the things before really making comments on its real worth. It is not based on free run, overselling or sort of excpetional low prices etc. The concept is to charge the reseller on account to account basis and not a fixed amount all along.
The $3 and so / low cost reseller services ...... well the point intself has the answer, ie low cost reseller hosting services will be able to offer the service or otherwise.

Yes, but the actual server owner (in this case: Poor Sap) STIILL maintains server bills and any other monthly expenses.

I am wondering,

I found this site of yours http://www.vitalteams.com and I would like to know:

Can I get hire your offshore employees and get them to work for me for free until I get my first client???

Gee I wonder why he went silent. Does the "Get something for free" concept not work both ways??