How to Resell VPS Hosting
Web hosting is an extremely hot business right now. The market is expected to expand at an estimated 15.5% Compound Annual growth Rate (CAGR) till 2027. It’s a big pie and you can get a slice of it. Setting up an entire hosting company may not be so easy, so why not start smaller – resell VPS hosting.
Table of contents:
- Choosing a Reseller Web Hosting Partner
- How to Build Your Hosting Services
- ScalaHosting for Resellers
- Setting Your Reseller VPS Hosting Prices
- Providing Support to Your Customers
- How Much Does VPS Reseller Hosting Cost?
- Making Money Reselling Web Hosting
Choosing a Reseller Web Hosting Partner
Perhaps the most important decision when becoming a VPS hosting reseller is your choice of hosting partner. As a reseller, your business is tied closely with the host you join hands with.
Virtual private servers are perhaps the best choice for resellers. It allows you to easily control your operational cost. At the same time, its high scalability ensures you can quickly ramp up your business on demand as the need arises.
Always ensure you pave your reseller business on solid ground. That means working with a company like ScalaHosting. Apart from the two decades of experience in the field, ScalaHosting has long been committed to excellence in VPS.
How to Build Your Hosting Services
In theory, reselling web hosting is relatively simple.
First, you purchase a bulk account, like a VPS plan. From then on, you divide up the resources into smaller segments and sell each of those slices to individual users. Essentially, you’re taking on the role of a web hosting service provider for them.
Because of this, it’s important to realize that being a reseller means looking past simply the technical standpoint of the service. It’s an full-blown business model, so you’ll need to handle advertising, marketing, billing, and more.
ScalaHosting for Resellers
ScalaHosting offers two main categories of VPS reseller accounts. The first makes use of а cPanel, while another option is based on our own SPanel. These control panels enable your clients to manage the web hosting accounts they purchase from you.
cPanel-based accounts cost significantly more due to the high licensing fees involved. It is a much more cost effective solution to choose an SPanel based account. You will gain far more in terms of resources while paying a fraction of the prices for cPanel reseller accounts.
Setting Your Reseller VPS Hosting Prices
The best thing is you are free to set your own prices when it comes to reselling VPS hosting. However, bear in mind you are going to be competing with companies selling shared hosting for just a few dollars a month, so you cannot afford to go overboard too much.
Keeping that in mind, you can either decide to try and undercut the competition, or provide extra services while maintaining premium pricing. When balanced with a solid business strategy, either of these pricing methods may work for your target market.
Providing Support to Your Customers
When reselling VPS hosting, it is important to set clear parameters well in advance. This means you need to be above board with your customers regarding what they can expect in terms of technical support. This can be presented in a Service Level Agreement and includes possible downtime, maintenance cycles, account termination, usage stipulations, technical questions, and more.
On the technical side of things, this is another reason to work with an experienced web hosting provider. While first line support can come from you, the equipment is ultimately in your partner’s hands and you may end up relying on their technical expertise in more than one cases.
How Much Does VPS Reseller Hosting Costs?
Generally, the cost of reselling VPS hosting is pretty straightforward. All you need is to rent a server and ensure you sell it to one or more clients at higher prices. After all, today there are powerful virtual servers for about $10/month.
Bear in mind, though, that’s not the only expense you need to consider – you need to factor in your overhead as well. This includes staff salaries, advertising fees, and any other business related expenses. Unless you’re starting off with a big pool of customers, you may also need to take into account a few initial months of operating without income.
Making Money Reselling Web Hosting
Making money reselling VPS hosting might seem tougher once you factor in all the costs involved. But you needn’t worry – there are a number of workarounds. Remember the main reseller account is solely under your control, so you can decide to how to divide all server resources to make a profit.
Once you calculate the basic cost per account, consider doubling or tripling that figure and dividing it into what you feel is valid pricing for customers. This will let you determine how many slices you need to divide your account into to make it a viable business that earns money.
No matter what business you are considering, the first step is always the biggest challenge. By planning ahead and doing your research you can reduce your financial risk considerably. When it comes to reselling web hosting, always keep in mind your choice of hosting partner is a key part of your success.
Frequently Asked Questions
Why do people resell web hosting?
Although the main purpose is profit, some resellers may enter the business for other reasons. Web designers and developers are a good example of that, as they often resell hosting services to the numerous clients they already work with.
What control panels do hosts provide?
The most commonly provided control panel is cPanel. However, due to increasing licensing costs, many are looking towards alternatives, such as SPanel. This fully cPanel compatible control panel is versatile and powerful with no additional licensing costs.
Other options include Plesk, Interworx, Webmin, and more.
Can I earn money hosting websites?
Yes, you definitely can. As the thriving reseller hosting industry proves, many earn a steady income from the business. By observing good business practices and working with the right hosting partner, you can do so as well.
Which reseller hosting is best?
VPS accounts are usually best for the reseller business as they offer you access to dedicated resources and powerful tools to manage your business. Being highly scalable, VPS reseller hosting can also be upgraded easily to meet any demands.
Another popular option for resellers is shared hosting, ensuring affordable prices and easy management.