In simple words, a reseller is someone who buys a certain package of hosting account from the hosting provider. He gets an account where he can split it into several smaller accounts and then sell each of those accounts to the end users. Let’s say the reseller buy a reseller hosting account for $120/year. He splits the account into 10 smaller packages then resells it to the users at $30 each. That is where his profits come from. He offers his hosting package in a cheaper deal to make it affordable to the users, to attract more users to use his services. It’s a kind of win-win solutions to both parts.
On some hosting providers you can be a reseller without any need to buy the package. You can simply just promote their hosting services to the end users. At this type of reselling service, usually the provider sets the prices then you promote it on a higher price deal. Your profits come from the difference prices amount. This way you don’t have to spend any money to be able to get profits from this business while at the same time the hosting providers will get more customers without doing any promotion efforts. It is their reseller job to promote the hosting service.
There are many reseller hosting options available you can choose since different company will have different reseller options. Some providers might only provide a single option while other companies might provide various options to choose. You can choose what kind of hosting services you want to promote. It can be shared hosting, dedicated server, co-location hosting account, or e-commerce hosting account. Some advanced resellers will also include other features and services to the end users such as domain registration, web site development, blog creation, and many more to get more profits from their business.
If you plan to start your reseller hosting business, you can start it at a very low budget. There are several reseller services that will only cost you under $10 per month that will be suitable for new resellers. After you are more advanced or your customers grow and need more resources you can upgrade your account into bigger one to accommodate your growing business. If you don’t have the budget for it, or are not sure how to run this reseller business, you can choose the free reseller type as I stated above. You will only need your own website to promote your service.
Whatever reseller type you choose, my suggestion is to start small first so you don’t have to spend too much money. Since you are new you probably will not require a lot of resources since probably you will not get many customers right away. You can upgrade your account anytime you want if you think you need more resources to handle your customers.
When your customer base grows bigger and you have earned more technical experiences, you can buy your own server equipments. However managing your own server will really require a lot of knowledge, cost, and time. Don’t take this path if you are still new on hosting business.
One thing that I should mention here is, some customers maybe will not really feel comfortable when they know you are just a reseller. They feel comfortable to host their website on an actual web hosting company. At this level, I should say that there is nothing you can really do about it. Just accept this fact since it is their choice to decide where they want to buy the service. Be honest with your customers. No need to say that you own the server when actually you just a reseller.