Branching Out, Reselling Morals

[AbbieRose]

I have to admit that I am intrigued by the concept of reselling and am further debating it. I know that I could offer a great deal more to clients than many resellers seem to since computing technology is my field, and in that way I think I have an angle to sell from as I could market to the extremely none tech market.

So much of reselling seems to solely benefit the reseller-would an increase in offered services like this justify a reasonable profit margin?

 

[ldcdc]

Hand holding is exactly the type of service that resellers can specialize in. It definitely warrants a significant price differential compared to more "regular" hosting, but you need to be very careful not to underprice your time in the mix.

 

[AbbieRose]

Is there any way to guestimate the average time taken though, until you have been doing it for a a few months? You've no real way of knowing just how much hand holding the clients you target will need, so how do you price yourself fairly, yet competitively?

 

[ldcdc]

Is there any way to guestimate the average time taken though, until you have been doing it for a a few months?

I don't think so, unless you can get that information from a direct competitor.

You've no real way of knowing just how much hand holding the clients you target will need, so how do you price yourself fairly, yet competitively?

Start high to make sure you're not too cheap. Or start cheap, get your name out there, and up the prices once it becomes necessary. There's always risk in business.

 

[brianf]

Is there any way to guestimate the average time taken though, until you have been doing it for a a few months?

It's all but impossible to determine the time used for an group of clients. Since your value added concept is to help the non-tech crowd, I'd plan on a heavy workload. You'll be maintaining sites as well as modifying scripts.

 

[purple]

Its definitely hard to determine how much time each person will need on average, but if you are going to be selling with the idea of hand holding, price high. You can always give a "discount" or send out "coupons" to customers who took less then you thought. But people will pay well if you're willing to take the guesswork out of it for them, as buying and setting up hosting is scary for the first time user.

 

[Lesli]

If you do this, you'll want to be careful of a few different kinds of situations:

* the brain pickers. They are looking for an inexpensive teacher for anything and everything. While I have no problems teaching my clients the basics of troubleshooting HTML or CGI, or the basics of configuring their FTP client or installing their SSL cert, I don't want to become their sole tutor without some compensation. For one, it's a huge time drain. For another, if I've already invested a hefty chunk of time writing documentation, I'd appreciate it if a customer didn't ask too many questions that could easily be found in the knowledgebase. Many people ask a few questions that are written up, until they see how extensive said knowledgebase actually is. Some people go straight for the knowledgebase and support never hears from them. Some people...just seem to want a private tutor.

* the delegators. They will want, or even expect, you to do quite a lot for them - continuously. Make sure to give yourself and them clear definitions of what is provided as part of your standard support, and what goes above and beyond. For example, I offer business and personal hosting packages. The business packages are more resource-rich, and are priced higher because I expect that businesses will have more "please take care of this for me" types of requests - especially for things like installing SSL certs, parking domains atop subdomains, even configuring certain software packages. When someone paying less than USD$6 a month wants me to do everything for them but wipe their nose, my own nose gets a wee bit out of joint.

Dealing with the extremes: Think of graceful ways to get the folks at the extremes to either compensate you for additional time, or learn to shift for themselves a little bit more. You might want to have a predefined set of support limits so that when a client exceeds those limits you can tell them: "As mentioned here, that particular level of support will cost you {however-much} and will include {service-service-service}. Shall I continue?" Then, for those clients who only ask occasionally, you can just not charge that extra cost.

 

[purple]

Thats great advice Lesli. I never thought of it that way since so many companies have a rather vague definition of such things to take advantage of add-on pricing for what you really need them to do. I think having good boundaries sounds like a great way to deal with it.

 

[Lesli]

Hosts may have vague-ish definitions of some things (like design services) because every project is truly different, and thus is priced differently. I do agree that things like fees, addons, any additional place the customer is going to be asked for money...should be spelled out as clearly as possible. It lets the customer know precisely what's expected of them, precisely what they're getting, it minimizes surprises and lets the customer know exactly what they're paying for.

AbbieRose, it's also less friction-inducing to start with prices high and go down, than to go in the other direction. People (myself included) get irate when prices go up, even if resources increase. But lower the price without reducing the features? I have yet to run across a person who'd complain about that.

You could think about how you want to offer support, and roll out said support in stages: test this aspect and its pricing, adjust, roll out the next bit, lather, rinse, repeat.

You might want to also think about saying that you'll provide up to X amount of individualized support a month - and beyond that X amount, it's Y per half-hour. Include some way of tracking "rollover" time if you wish - I'm not sure how to accomplish that, but there must be some tool out there that would do the trick. (If you do this, you might want to put a cap on rollover time, just so that you don't end up with a reseller who comes to you at year 3 and effectively has you create a custom CMS for them.)