Could reselling hosting lift your business?

In recent years, web design has evolved to become a more full-service oriented industry. Greater numbers of designers feel reluctant to hand over the maintenance of a website at the launch stage. At the same time, agencies are required to have a greater technical knowledge of how their sites will integrate within a client’s IT infrastructure. As a result, more agencies have found themselves squared up to the challenge of selling themselves as both creatives and IT consultants.

By offering a complete service ‘package’, including elements such as hosting and programming, designers can remain engaged with a website project long term and also transform their revenue streams. A move to deliver the technology as well as design provides greater scope to charge for technical experience and the ability to advise on infrastructure earlier on in a project.

There are some strong arguments for why web hosting, for example, can be an attractive bet for web designers to resell. Today, a wide range of white-label web solutions like hosting, domain names, email, ecommerce and broadband products are offered by large providers at low trade prices. With little work, these can be quickly re-branded as your own products and combined with design services. Agencies can thus provide own-branded packages of tailored design, web development and hosting to their niche markets.

 

By offering bolt-ons such as hosting, designers can not only increase income with the recurring fees but also pitch more convincingly to clients for providing lucrative website support services. Today, small businesses are keen to lower their costs, achieve greater technical agility and scalability, and increasingly have the need to focus their own employed IT staff on critical in-house tasks. Reselling web solutions can mean that design agencies become more of a one-stop-shop for website needs.

Research says

Research supports that reselling hosting is a viable revenue stream for many companies. A survey of 790 Fasthosts resellers found that 80 per cent of businesses that begun to resell web hosting in addition to their regular products or services earned a profit from the practice within one year. Furthermore, two-thirds found it ‘easy’ to cross-sell hosting to their existing customer base, and 50 per cent increased their average length of service per client as a result of reselling web solutions.

In a still challenging economic climate, the figures lend weight to the concept of reseller web hosting as a low risk and profitable way to develop a web design or marketing related business. Some 70 per cent of Fasthosts resellers surveyed would recommend reselling web hosting to other businesses such as theirs.  

In 2011, the low investment costs involved make reseller web hosting a compelling business proposition. Excluding monthly subscription fees, 61 per cent of resellers invested less than £500 in setting up their own reseller hosting operation.

Technicalities

A lot of web designers will be attracted by the concept of reselling technology but wary of punching above their weight when it comes to delivering the service. What degree of work would this new source of revenue require?

Steve Holford, marketing director, Fasthosts, explains, “While in the early years, service levels could prove a headache for resellers, today’s large white label hosting providers now serve hundreds of thousands of customers. They are equipped with the infrastructure to provide quality products and excellent uptime, connectivity and technical support. All the back-end processes and customer control panels are handled by the provider but the reseller retains all customer liaison themselves.”

With a reseller service, there is now a high degree of freedom to structure hosting plans. Resellers can create a customised package for each end customer, design and create their own range of packages for sale or simply resell a provider’s own off-the-shelf packages.

Nowadays, a web design agency can integrate the functionality of a reseller hosting service seamlessly into their own website. Using an API provided by the host, a company can easily enable its customers to purchase hosting packages directly from its website. One can even create tools for customers to manage their own services from your website. Resellers completely re-brand everything their clients use, from email applications to their nameservers and Control Panels.

Profits

The most attractive aspect of reselling a product like web hosting is the large profit to be made. Resellers can charge their clients a premium for hosting and when combined with their other offerings, can enjoy a healthy return. The UK internet services industry is still healthy, and good margins and a recurring fees model make hosting a cash-rich business.

Reseller hosting removes all the technical barriers to providing the service. Resellers benefit from all the R&D advances of the industry without the need to invest their own capital. As well as the nuts and bolts needed for a web presence, hosts today sweeten the deal with additional tools and services such as web stats and SEO that can also be re-sold and charged for.

The best way to maximise income from reselling activities is to find one provider that can handle all the technical aspects so you can focus on developing your own tailored value-adds.

Whilst it is likely that design services will always remain the focus, technology deliverables may be a good device for agencies to use to reposition and achieve longevity with clients.

Training and support

Undoubtedly, embarking on any new business project requires some research and skill development. However, larger reseller hosting vendors can help with developing a new reseller venture. For example, Fasthosts runs an independently certified webinar training programme.

Provided free of charge to Fasthosts Advanced Reseller customers, the programme delivers both strategic and practical training in how to build up a profitable reseller hosting business. In conjunction with the UK’s leading provider of digital marketing training, Econsultancy, the training provides technical insights, business development and online marketing knowledge to help resellers thrive.

Low risk experimentation

Naturally, some web designers will have more time to invest than others. The larger web hosts have rolled out an ‘out of the box’ approach to their reseller activities, and nowadays from only £20 a month, you can experiment to any degree with reselling web solutions as part of your services. Cost risk is no longer a barrier, as the best reseller hosts will offer only one month contracts. For a minimal investment, it may be interesting to see how many of your clients will take a bite. Of course, the standard of a reseller’s service will be largely dependent on the hosting vendor with whom you partner. Always select a large reputable host with the infrastructure, technical resources and financial stability needed to provide a high quality service. With so many reasons to explore the reseller IT market, and with simple solutions and business development support on hand, why not take advantage of this sector?

The experts say…

Andy Burton
CEO
Fasthosts

“With the dramatic improvements in the interoperation between IT and the internet over recent years, we have seen significant advances in the capability of hosted service providers toward developing and providing virtualised and private cloud solutions. Therefore, I fully expect the barriers to entry to these premium solutions and services for small to mid-sized businesses to reduce considerably and for customer adoption to increase swiftly.”

 

 

 

 

The experts say…

Richard Beckett
Reseller Hosting Expert
Fasthosts

“Unlike other reseller propositions, a hosting reseller is free to focus on their sales and tailoring their new service to their corporate identity or existing offerings. As the web becomes more critical for all sizes and types of business, the web solutions market will enable resellers to capitalise on growth areas such as mobile email, collaboration and ecommerce.”

 

 

 

 

 

Key market trends

1. As the hosting industry explores further with virtualisation and cloud computing, the advancements in these two areas will surely be driving forces behind reseller trends this year. 
2. There will be more of a trend for businesses, particularly small businesses, to outsource some of their IT solutions to providers. aprecautionary view of their finances and want as much out of their IT as they can get with whatever costs their budget will allow for. From the web hosts’ perspective, meeting those needs means working with their customers and branching out into virtualised and cloud services.
3. There is also an increasing need for security solutions. Monitoring, firewall, and security software and services will become even more of an essential product solution for web hosts to offer, especially as ecommerce becomes more mainstream and more private information is exchanged online.