How To Make Money Hosting Websites: A Guide to Reseller Hosting

How To Make Money Hosting Websites

If you’re wondering how to make money hosting websites, then you’ve come to the right place.

With the rise of the internet, you can make money in tons of different ways — but not all of them are legal or legitimate. This guide can help you avoid falling into that trap.

There are may opportunities for you to start a lucrative online business from your home, if you have a basic understanding of website hosting. Once set up, the business can run by itself and generate a steady stream of passive income for you. Website hosting is perhaps one of the better opportunities in front of you.

Web hosting is what websites need to become accessible on the internet. Your website is hosted on servers, and when a person wants to view it, all they need to do is type your URL into their browser. Their computers can then connect to your server, which will display the web page to them.

This is why it is essential that websites be hosted through reliable companies. To ensure that, the best thing is to contact a reseller web host that is operating in a niche market, and can offer customers more customizable benefits than the original host.

What is Reseller Hosting?

Reseller hosting does not involve you running the hosting servers yourself. Instead, you purchase a web hosting package from a big name hosting company, brand it with your own company, and resell the space for a profit to your customers.

All a hosting reseller requires is a large server and some bandwidth which they can distribute to other customers. Reseller hosting requires you to:

  • Create a cPanel-run web hosting account.
  • Set resource limits, for example, disk space and bandwidth limit, etc.
  • Use Web Host Manager to manage all accounts.

Your server uptime will also be monitored by an administrative team, which prevents downtime and server unavailability. You will also be given a 24/7 support staff to help you along every step of the way.

Furthermore, you will be allowed to create your custom prices web hosting plans and offer extra features like website backups. Since you get to brand your web hosting service, your customer will never know that the management of the hosting servers is not done by you.

The customer needs only to pay a monthly fee, and the web reseller host will never be scammed of their due profit. The profit will be the difference between the price you charge your customers, and your cost of renting the hosting servers.

If you have some understanding of how web hosting works, reselling it will be a piece of cake for you. Who knows, with some effort, you may even become a big name in web hosting in a few years.

What To Consider Before You Start Making Money Hosting Websites

If you have been thinking about hosting websites, then there are a few things that you need to factor into your decision.

First, you need to know what your motivations are for starting this business. Remember that a web hosting business does not yield profit immediately; it will take a lot of time and effort, so your intentions must be clear from the start and should be strong enough to take you through trying times.

Secondly, if you decide to start hosting websites solo, you will need to learn some basic technical skills. This doesn’t mean that you need to do a complete course on software management and programming. However, you will need to develop a thorough understanding of how servers work, as well as some basic web development skills.

You will also need to have some basic marketing and business skills to manage things like online marketing, payment processing, etc.

How to Make Money Hosting Websites

Now that you have some understanding of what you need to consider when starting a reseller hosting business, it is time to jump to the fun part: how to make money hosting websites.

Research Your Niche

When starting your own web hosting company, don’t make the mistake of competing against the top dogs in the web hosting circles. These companies are unbelievably huge, and they can offer customers a lot of competitive advantage that you will never be able to match.

However, these companies will be the ones that will provide you with reseller hosting packages.

Your first goal when starting a web hosting business is to create one that caters to small to mid-size businesses in a niche market. Big web hosting companies will probably have hundreds of servers and thousands of customers even here, but a niche market allows you some leverage to compete with them.

When brainstorming for ideas on what niche market to cater to, you can ask some questions like:

  • Is it best if I focus on providing web hosting to people in my local area?
  • Should I focus on a particular industry like lawyers or artists?
  • Should I focus web hosting as an add-on service for my digital marketing agency (if you have one)?

Competitor Analysis

An Online Research And Competitor Analysis Tool

Once you have thought out the kind of niche you want to work with. There are some great tools that can help you in this regard, like the one by Ahrefs shown above.

You should do some deep research to get an understanding of your competitors. Look for at least five competitors who are offering similar services as you, or targeting your preferred niche.

Then look for the following information:

  • Their core offerings: The type of hosting packages they are offering (shared, dedicated, VPS) or any other extra features.
  • Their package pricing: What do the different types of hosting packages and other services cost? Can you match their price, or will you need to market your brand as a premium?  
  • Their marketing strategies: Do your competitors have social media accounts or blogs that they use to market their services? Do they use email marketing or run paid ads? You can also run their site through online tools like Ahrefs or SEMRush to see what keywords they bid for, what kind of backlinks they have, and whether they get any organic traffic.

Ahrefs and SEMRush both offer you free online tools to gauge your competition and niche. However, you should invest in paid versions as well, as these tools are invaluable when it comes to online marketing and SEO efforts.

Doing a competitor analysis on some of your top online rivals can help give you a solid understanding of your niche and how you can compete in it.

Determining Your Core Offerings

Your research can help you determine what kind of hosting, extra features, and additional services you will need to offer your customers. As a hosting reseller, you can offer a few different types of hosting as well as bundled packages offered by your parent hosting company.

Some examples of popular hosting services include shared hosting, dedicated hosting, VPS hosting, cloud hosting, or WordPress hosting.

Depending on your affiliated parent hosting company, you may be able to offer your customers value-adding services like email features, management of domain name, SSL certificate, SEO tools, and even more. With enough valuable features, in time, you can become a one-stop-shop for your niche customers’ web hosting needs.

Finding a Host That Matches Your Offering

Once you determine the type of offerings you can provide to your customer, the next thing to do is to find a parent hosting company that matches your services. For example, you can decide whether you want to offer different pricing packages or different types of hosting.

You should also check whether your parent company will provide support for your hosting, or whether it will offer you domain name management.

Once you have figured these things out, you should find yourself a hosting company that aligns with your requirements.

Signing Up for a Reseller Hosting Package

GoDaddy Reseller Hosting Package Can Provide You White-Label Hosting

Once you have found your ideal hosting company (for instance: GoDaddy), you now need to purchase a reseller hosting package from them. The process of acquiring a hosting package may vary slightly from host to host, but most of them will have the same core procedure:

  • Go to the “Reseller Hosting” page.
  • Select a reseller hosting package and sign up
  • Purchasing the hosting space and service credits.
  • Register customers to your servers.

No matter how much money you hope to make, buying a basic reseller hosting package does not cost much.

Let’s take the example of GoDaddy web hosting provider again. It offers a “basic Reseller” package at just $8.99 per month, and a Pro package at $14.99, through which you can have enough server space to make a profit.

Remember, though, that many of these websites will be on shared servers. If you want to get a dedicated server, you may need to dole out thousands of dollars each month — which most new hosting resellers do not have.

However, once you are able to reel in a few customers who are not dealing in any shady online businesses, you will be able to generate a steady profit each month as they renew their subscription. This means that until you stop hosting, you can be assured of a monthly income.

Creating Your Very Own Web Hosting Website

As a web hosting company, your website will carry a lot of weight. Many of your customers will make their first impression of the quality of your services just by looking at your website. So make sure your website is targeted directly towards your niche customers and give them the message that they want to hear.

Your web hosting site should also be user-friendly so that customers can easily navigate through it and look at all you have to offer. It should also provide updated and useful information regarding your offering and should have accessible customer support.

If your parent hosting sites allow it, you may also be able to integrate payment processing as well as value-adding features like live support into your website.

Features Offered By Web Hosts

A good idea is to select a web host that will provide you access to a multitude of additional features that you can transfer to your customer. Some of the most common features are:

  • White-label hosting: This allows you to replace the parent web hosting company’s name with your own brand. This means the only company name the customer will see is yours.
  • Customization of plans: This very useful feature allows you to manage and personalize your hosting plans based on the services your customers want. This means you can even create unique offerings specially designed for your customers.
  • Value-adding bundles: These contain features like domain management, access to cPanel, domain management, domain management, and managed WordPress.
  • High-quality servers: High-quality servers will allow you to offer a variety of hosting packages, a range of storage space and bandwidth, no downtime, and fast data retrieval.

Marketing Your Web Hosting Site

Digital Point Can Be Used To Look For Potential Web Hosting Customers

If you want to know how to make money hosting websites, you will get more success by targeting your marketing efforts towards a niche like on Digital Point.

This will help you stand out from the crowd. Instead of scattering your marketing tactics to everyone (which hardly ever works), you will be focused on only a small segment, which is more productive.

Then you need to determine how you can reach these potential customers. This can be done in several ways, and you may need to experiment with different strategies to see what works.

  • Digital media strategy: You can start an online blog that can help you rank better on search engines and hence, gain more visibility. You can also set out a budget to use paid advertisement opportunities provided by Google, Facebook, and other search engines and social media channels. You can also run an affiliate marketing campaign to bring leads your way.

If your budget is not enough to take the paid marketing approach, try working on natural, organic techniques until you build up enough funds for advertising.

  • Networking: One of the fastest and most effective ways you can get customers is to network. However, this job is not as easy as it sounds since a lot of webmasters are trying this strategy. Because of this reason, you should set your sights on sparsely populated areas.

Try to look for online communities and forums that have not already been swamped with other web hosts. If you cannot find one, look in tech-related forums like Digital Point. Such communities may have thousands of customers who are always on the lookout for affordable, customizable web hosting plans, and who will happily accept your offers if you pitch your services well.

Benefits of Choosing a Small Niche

There are a wide variety of pros of working for a niche market:

  • A niche market allows you to keep your operating costs low by catering to the needs of a small number of people.
  • It makes it easier for you to cater to the deep, specific needs of your customers.
  • This also means that you can provide better customer support since you understand the needs of your customers.
  • You will also have relatively low competition since you won’t be direct competitors of the top dog web hosting companies.

Even though there is more of a possibility of success if you focus on a smaller segment, restricting yourself to a niche also comes with a few downsides. One is that it may limit your company from growing to its full potential. However, you can remedy this by slowly expanding to related niches over time after you have dominated your original niche.

Offering Customer Support

One of the things that will play a key part in making or breaking your company is what kind of customer support you provide.

Since you are a small host, offering excellent customer support can help you stand out as well as gain customer loyalty. In fact, these customers may very well spread word-of-mouth and become the best form of advertisement for you.

Your customer support should start the moment a prospective customer lands on your website. If they have any queries about your offerings, they should be able to access your live support team immediately.

Your website design also plays a role in customer support by guiding your customers to the sign-up process. Once they subscribe, they should get a welcome email and an easy way to set up their hosting accounts.

For any questions, support through online user guides, phone, live chat, and email should be available.

The best parent hosting companies include 24/7 support as part of their reseller packages. This means that they can handle the support requests. You can make this process even better by offering supplemental support with your own team or handling non-technical requests.

No matter what approach you take, customer support should be excellent.

Profit In Hosting Websites

How to Set a Profit Target for Your Web hosting Business

Now that you have done the market research selected your niche, finalized your offerings,  gotten a solid parent web hosting company, created your website, and marketed it, now it is time to see the money come rolling in.

Initially, you should worry about breaking even, and that will happen once you have gotten a few customers. To determine your breakeven amount, take into account the price you are paying to your parent web hosting company, the price you are selling your packages for, and your initial startup cost.

Once all these investments have been recovered, you can start to put capital into your business to attract more customers.

The best thing about hosting websites is that you will have a high customer lifetime value with recurring payments. As long as you provide excellent service, there is no reason why your customers will switch to another hosting site.

How to Set a Profit Target

Don’t expect to become a millionaire in the very first month of starting your business. Keep your target modest, and your profit margin moderate. A 15 to 20% profit margin is considered ideal because anything over that will be too expensive for your customers. However, if you keep your profit margin too low, for example, at 5%, you will not be able to make much money at all even if you put a lot of hard work getting customers.

So, if your target profit is $1,000 monthly, at a 20% profit margin, you will need to generate revenue of $5,000. If you have done your marketing right, this shouldn’t be too difficult.

Remember to Stay Calm

As with all businesses, the starting can be quite rough and frustrating in the first six months. Most businesses only get to reap a nice reward after a year or two. So don’t let your lack of customers during the starting phase frustrate or discourage you. You will know how to make money hosting websites if you work your way through this guide, smartly and patiently.

Advantages of Hosting Websites

As a business, selling web hosting has several benefits. Some of these include:

  • It requires comparatively little knowledge to start: Signing up for a hosting reseller account is very easy. Plus, you will be equipped with customer supports value-adding features and automated payment processing.
  • It doesn’t require a lot of technical knowledge: You will need some basic knowledge of web design and development to understand how website hosting works. However, all in all, the bar is pretty low.
  • It offers recurring payments: The best thing about it is that once you have successfully grabbed a customer, there is a high possibility that they will stay with your website for several years. This means you will get recurring monthly income without any additional effort.
  • It can act as an add-on: If you run a design or digital agency, you can add web hosting services as an additional feature. This can help you supplement your revenue.

Disadvantages of Hosting Websites

You should also be aware of some of the limitations and drawbacks that are part of the reseller hosting industry.

  • Services limited by parent host: Until you grow big enough to become an independent web hosting company that can rival the industry leaders, you are at the mercy of your parent web host. This means that the number of services and products you can offer will depend on your parent web host. Therefore, make sure you choose a reliable company with solid, high-quality servers and a wide range of additional features.
  • Difficulty in offering competitive prices: Since you are a reseller host, you won’t be able to offer the dirt-cheap prices that the industry leaders provide. So you will need to find out other USPs that set you apart from the crowd.
  • Low control over server: Since you only rent out the servers, you don’t own them, you will not get full server control.

Final Thoughts

When working out how to make money hosting websites, regularly generating new customers will be the hardest thing.

You can use SEO, PPC, social media marketing, blogging, email marketing, and other ways to bring people to your site; however, it will still require a great deal of time, patience, and persistence.

Best of luck to those who plan on taking on this task and making some serious dough as website hosts!