A web hosting reseller package allows you to cover the cost of your web hosting or even make an income by offering hosting services to others.
If you have a web hosting reseller package on a Linux server you will usually have WHM or Web Host Manager, a central control panel from which you can set up accounts and allocate disk space and bandwidth to each account. You can also set new passwords for the accounts and control the account overall.
Many people have reseller accounts for their own use and do not resell the hosting as such. They may do this because they find sites easier to manage when each has its own account, or because they have a lot of data to store so that they need a real allocation of disk space.
For example if you are frequently buying and selling sites, it is often easier to transfer them if they are in a reseller account. You could offer free hosting to the purchaser and still have them control the site through cPanel without having access to any of your other sites.
Companies and individuals who offer web design and build services also often provide hosting through a reseller account. Here they may not charge separately for hosting, but include it in an overall retainer rate for their services.
Offering web hosting as a free extra to your other internet-related services can be very lucrative. It serves to lock customers in to a standing charge or membership fee, or at least make it harder for them to leave. Many clients will be reluctant to cancel your services when they know that it will mean they have to find (and pay for) new web hosting and transfer the site – something that the average small business owner would find extremely scary.
On the other hand there are some pitfalls associated with operating a web hosting reseller package. Most of these apply to resellers who are using the account in the way that it was designed, i.e. reselling web hosting services. But even if you offer hosting as a free add-on to other services, there are some points to watch out for, especially in a situation where customers have access to their own control panel.
First and foremost is the question of support. Will the hosting company that supplies you with the web hosting reseller package provide support to your customers, or will your customers have to request support through you? Clearly the first option is better, but not all hosting companies offer this. If you have to act as a go-between then you will need to either be prepared to field their support questions and watch for downtime 24/7, or outsource this.
You will also need some way of accepting payments and keeping track of whose payments are due. The usual method is to have a monthly recurring charge on a credit card, but this has to be updated whenever a credit card comes up for renewal. Plus of course people sometimes lose or cancel their cards.
You may decide to offer plans where people can buy 6 months or a year’s hosting at a discount. This can be great for ensuring that customers stick around, but it leaves you more vulnerable to fraud. People buying with a stolen credit card number can leave you with expensive chargebacks some time down the line.
Always ask for a phone number and consider calling any customer who orders more than the regular monthly package. You should also, of course, check that the name and address on the account match the name and address on the credit card, and have your system take the IP of the computer that places the order. It is easy to check the city, state or country of any IP so you can then check that this IP matches with the customer’s credit card billing address. These measures should help to protect you against fraud when operating a web hosting reseller package.