Why Resell?

[HometownServers]

Im curious about the pros/cons of selling to resellers. At what point do they cost more than they pay? At what point would they almost become competitors to you in the market? How much trouble do they cause, and how do you deal with (your own) TOS violations or clients of theirs?

 

[eric1212]

It's a major benefit, because even if you provide a discount, you're getting revenue from the reseller that may have went to real competition. Often, you have a much better relationship with your resellers than your usual customers because they're open to making deals, and working with you directly.

Hopefully they run a legit business, and understand your TOS. I would suggest adding something specifically into your AUP about reselling, such as "No reseller end-user support".

 

[easyhostmedia]

because someone takes out a reseller account does not mean they are another host/competitor. I have resellers who only use the account for their own websites, so they have them all in one place for a single payment. I also have clients who are web designers and have reseller accounts as they offer to host sites they design.

 

[HometownServers]

because someone takes out a reseller account does not mean they are another host/competitor. I have resellers who only use the account for their own websites, so they have them all in one place for a single payment. I also have clients who are web designers and have reseller accounts as they offer to host sites they design.

Easyhostmedia, I was actually fascinated to find out that you have been a one man show for so many years, how inspiring. What would be your thoughts on revenue sharing with the resellers to provide a lower cost reseller option, or do you think that would bring in the wrong kind of "fly-by-night" web hosting companies.

 

[easyhostmedia]

Easyhostmedia, I was actually fascinated to find out that you have been a one man show for so many years, how inspiring. What would be your thoughts on revenue sharing with the resellers to provide a lower cost reseller option, or do you think that would bring in the wrong kind of "fly-by-night" web hosting companies.

Nothing wrong with being a one man show, only drawback is you may be working longer hours with little sleep. I have had trainees through various government schemes, but these never work out, so not always on my own. i did have 1 girl that was a great help, i even gave her control on a ecommerce site and was on the verge of offering her a full time job as she as great with clients, until i had to go to a meeting one day and while at the meeting their was a client call up full of anger and abuse because his site was down. when i got back the girl was no where to be seen. when i called her she went home in tears as she was verbally abused by this client. i tried to persuade her to come back and even offered her a job, but she would not consider this. ( dont blame her as a 17 yr old does not have to stand for such abuse). i found out the fault with the clients site was his own doing. neither to say that person is no longer one of my clients.

i would never consider revenue sharing with the resellers as why should i share my profits with resellers.

 

[ughosting]

We're happy to share revenue with affiliates, as to be honest, they do most of our advertising for us!

 

[easyhostmedia]

We're happy to share revenue with affiliates, as to be honest, they do most of our advertising for us!

sharing revenue with affiliates is totally different to sharing revenue with resellers.
We have an affiliate scheme, but this is paid out as credits to clients accounts.

 

[cheapdedicated]

I think you are better off seeing resellers as your clients than as competitors. Their success is your success. They get more clients, Make more money and order more from you. You can keep in mind though that at some point their demands will probably out grow a reseller plan and may be move to VPS or dedicated server. Be positive you helped them grow and you earned a reputation.

 

[paullopez]

Also, it is important to maintain only professional relationship with a reseller not friendship kind. I am telling this because at some point they start demanding more discounts and you end with no profit, no loss kind of a business, which is absolutely useless.

 

[cheapdedicated]

Also, it is important to maintain only professional relationship with a reseller not friendship kind. I am telling this because at some point they start demanding more discounts and you end with no profit, no loss kind of a business, which is absolutely useless.

On any day resellers are getting a good deal (already) so only offer discounts that you are sure will be sustainable. Its also not wise to start offering individual discounts. They should be structured and must apply to whoever qualifies for them. No amount of friendship should influence one's business pricing or you will end up out of business.

 

[JordanF]

As long as you are earning enough from your reseller, there should never be a problem nor should they be considered competition.

Also, it is important to maintain only professional relationship with a reseller not friendship kind. I am telling this because at some point they start demanding more discounts and you end with no profit, no loss kind of a business, which is absolutely useless.

Yes, very true. If you do become genuine friends remember to always keep things like pricing and contracts on a business-minded level.

 

[Collabora]

I believe the ideal situation is if all customers are resellers.

 

[ughosting]

I agree, we get more support issues from shared hosting accounts than from the reseller accounts.

Normally because end users often ask questions to learn general hosting, whilst resellers field these questions and only report true system issues.

If I charged for every word-press blog I fixed, I'd be able to retire.

As to the OP question what to do about TOS violations

With CloudLinux installed, most violations are controlled automatically, leaving mainly content violations.

TOS violations should result in suspension of the user account at fault.

However should the same reseller keep having issues over and over you have to put them on a warning.

Once you issue a warning, you will have to follow through if the rules continue to be broken.

Your TOS should be written to protect your system, so if your users break your TOS they are harming your system and you don't want them to host with you.

 

[Collabora]

I believe the ideal situation is if all customers are resellers.

I agree, we get more support issues from shared hosting accounts than from the reseller accounts.

Not to mention the presales inquiries.

 

[HometownServers]

Do you provide support for resellers end-users?

 

[easyhostmedia]

Do you provide support for resellers end-users?

As a rule No as it is up to the reseller to support their own users and then if they can sort this issue then your reseller makes contact with you and you feed the info to your reseller.

If one of our resellers want us to deal direct with one of their end users then we will do this for a fee, either paid by the reseller or their user, this needs to be paid before support will be given.

 

[Hosting42]

Reselling is awesome for small-business and entrepreneurs. Over the past few years we started our business on a Reseller Plan. We have sold out of our packages and moved to hosting our own servers on a Colocation basis allowing us to sell more and offer lower prices.

Reselling is awesome for small-businesses just starting.

Good Luck!

 

[HostWithLove]

A good way is to assume that they would use up all the resources you allocate to them when you are modelling your packages. As resellers, inevitably they have much more potential to utilize the full extent of their allocated resource than a shared hosting package.

Whether or not they become competitors is really not much of a concern - there are so many already. In fact, if your prospective clients do end up going to your resellers, your resellers would end up having to upgrade their packages at some point and this is still beneficial for you as a hosting provider.

There are some clients who simply prefer to go with a smaller hosting company or even directly with their friends. It is all about having connections.

We advise our resellers to follow our ToS, however should there be any violation, we would in most cases contact our clients directly to resolve it first. Only in urgent scenarios would we suspend the offending account, the other accounts are left untouched.