The Reseller Hosting Guide: How to make money in the middle
In 2019, 86% of Canadian companies had some type of web presence, with more than three quarters using websites to connect with customers and drive increased sales.
In that same year, however, just one-quarter of Canadian businesses sold goods or services online. In 2021 that number rose to 33%, with companies reporting e-commerce revenues of $3.7 million on average.
Online services are growth opportunities for enterprising web developers and IT professionals — if they can find their niche.
And while many companies are opting for the standard product or service model, others are considering another option: Reseller hosting.
In this quick-start guide, we’ll dig into reseller hosting basics including what exactly it is, how it works, what you need to get started, and (of course) how GoDaddy can help.
What is reseller hosting?
You already know that to have a website, you need storage, bandwidth, and computing resources to make that website available to people around the world.
But for most individuals and small businesses, it’s simply too expensive to buy and manage their own web hosting equipment.
So this is the standard web hosting model: website files are “hosted” by a web hosting provider on their servers. You pay a fixed or sliding cost per month, depending on your agreement with the hosting company.
Resellers buy hosting from a hosting provider that allows resale and then sells the packages to businesses or individuals looking for a web host.
Resellers often bundle web hosting with other services such as web design, development or IT services to provide value-added offerings for their customers.
Related: The best domain names for web designers and developers
How does reseller hosting work?
Reseller hosting works by offering benefits for each party in the agreement.
For first-party hosting providers like GoDaddy, this arrangement helps them sell more hosting packagesthrough resellers, who take care of:
- Finding customers
- Setting up accounts
- Getting paid
This is often a profitable model for companies with substantial computing resources. While they can and do sell web hosting packages directly to clients, reselling allows them to sell even more.
For end users, reseller hosting offers the benefit of trusted hosting services — especially if resellers are using well-known providers such — along with access to additional services or solutions from someone they trust.
For example, if you run an IT service firm that helps companies solve technology issues and allows them to outsource specific needs such as analytics, security, or their help desk, adding web hosting can make these packages more attractive to potential clients.
For resellers, this approach to hosting sales comes with the dual benefits of cost savings and compute scaling.
Rather than spending the money to build out webhosting infrastructure themselves — infrastructure that must then be maintained, upgraded, and replaced — resellers leverage existing frameworks.
Since they’re paying for hosting services from the hosting provider directly, all maintenance and hardware monitoring is the responsibility of the original hosting provider.
Resellers also get the benefit of scale. Rather than spending on new servers to keep up with customer growth, resellers simply purchase more hosting plans from their provider.
How to make money from reseller web hosting
The goal of reseller hosting is to deliver passive income. In practice, this means charging enough for your resale products that you’re getting more back from customers than you’re paying to your hosting provider.
This means thinking about your profit margins: How much do you want to make on reseller hosting, and how much can you reasonably charge?
Consider that in most cases, hosting providers will sell hosting packages at a discount to resellers. With GoDaddy, for example, resellers can save up to 20% off retail with the Basic Reseller package, and up to 40% off the retail prices with the Pro Reseller option.
While some may come to you for hosting alone, it’s often worth bundling your web hosting with other services to help customers make the move.
Consider an IT support company that outsources helpdesk functions. If there’s a problem with internal systems, client employees call your company for help. You have access to their business servers so you can see what’s happening and pinpoint the solution.
In a reseller hosting model, you also offer web hosting, which allows companies to shift their website storage and compute needs to services offered by you and maintained by your hosting provider.
Not only does this streamline the process of accessing key services for clients, but lets you charge more for the “bundle” of services you provide.
Note: Anyone who buys products through a GoDaddy Reseller gets 24/7 help from GoDaddy Care Guides, taking that task off the reseller’s shoulders.
How to start your reseller hosting business
If you’re ready to get started with reselling, the first thing you need is a solid hosting provider to partner with.
Look for one with a great reputation for server uptime, customer service and reseller profitability.
Make sure your provider supports reselling. Not every company wants its services resold, and you don’t want to do it without permission.
It’s also worth doing your research. Along with the initial sale of services, what does commission look like for your hosting provider? What are their policies about:
- Scaling up services
- Hardware support
The more you know, the better prepared you are to start hosting with confidence.
Is reseller hosting profitable?
It all depends on your provider — and your approach.
If you sell your services for too much, you won’t find a large enough market. If you resell for too little, you could struggle to make a profit.
In addition, if your provider doesn’t give you the freedom to sell how and where you want, these limitations may impact your profitability.
With GoDaddy’s reseller program, you get profit-building benefits such as:
Market GoDaddy’s products as your own with comprehensive white labeling. Customize your pre-built storefront to look and feel like your business, then start selling web hosting, domains, email, website builders and more.
Price and margin control
Set your own margins and price your services your way to generate maximum profit.
With GoDaddy, you don’t need to establish your own merchant account. Instead, use GoDaddy’s existing framework to process payments with ease.
A one-stop control panel where you can:
- Check your commissions
- Manage all your reseller accounts
- Send out marketing emails
- Update your reseller storefront
- Chat or email with GoDaddy Guides and more
Need help? GoDaddy has a multilingual team ready to support you 24/7. Your clients will also receive 24/7 support directly from our well-trained guides.
Reselling offers substantial profit potential — if you can find the balance between what you pay, what you can charge, and how well your hosting provider performs. With the right approach and the right hosting partner, however, it’s possible to drive substantial and sustained returns on your investment.
Ready to get started with reseller hosting? Go with GoDaddy.