With the increase in net population globally, having a website for your business has become a necessity. Reseller web hosting can not only be the vehicle to get you there, but also help you create a profitable residual income business.
Good Business Potential of Reseller web hosting business
According to statistics, around 2 billion websites exist in the world right now. All of them need a domain name and some web hosting space to start or continue. Hence one can easily understand the potential of web hosting business across the world. Web hosting companies not only sell directly, but they also sell domain names and hosting space through resellers.
With reseller web hosting you basically rent hosting capacity from a web hosting company and then resell that hosting at a higher price directly to customers with websites to host.
Some problems and challenges at the starting
To begin with, you need patience and a proper plan to succeed in this residual income business. The first six months can be a bit frustrating, but do not leave and hold on. The waiting time is needed in any business and this one is not an exception. The real fruits will start coming in maybe after a year or so and after that, you can very well lead a comfortable living out of it.
At the initial stage of this web hosting reseller business, the biggest challenge will be to get orders on a regular basis. Once you get some flow of customers, the things will start looking brighter and money will start pouring in from new orders or renewal of old ones. You will definitely see the light at the end of the tunnel, but please remember it is not a quick rich scheme. It needs some efforts and patience to succeed.
What are the steps to succeed?
The question is how one can turn his reseller web hosting business into a profitable residual income business. The following is a simple step by step guide to it.
1) YOU NEED TO ADVERTISE YOUR SERVICE
As getting new orders consistently is a problem at the initial stage, you need to invest some money and effort on marketing.
Different places where you can advertise
- Social Media – You can try Facebook and other popular social media sites. Look at the filtering options that the social media provide and make use of them to filter out any unworkable demographics.
- PPC advertising – After signing up with the parent web hosting company as reseller make proper planning and spend some money on PPC advertising like Google Adwords. They offer some free credits also. How much you can make at the initial stage depends on your marketing effort and tactics. The return will also depend on the amount of money spent on advertising and PPC campaign.
- Local ad campaigns – You can advertise your services in small local newspapers also.
Offer extra discounts to draw new customers initially
In order to draw more customers to your business, you can offer some additional discounts from your pocket. This may be a bit lower than what your parent web hosting company is offering. You can earn the benefit at the time of renewals.
2) SET AN INITIAL TARGET OF $1000
In order to generate a monthly residual income earning of $1000, you have to make a sales of $5000 and from that, you can expect a commission of 20%. This target of sales you can achieve in two ways –
- Initially focus on working as a hosting affiliate – Working as a hosting affiliate will help to reach the target of $1000 a bit faster. Going on an average earning of $50 per referral, you need 20 conversions every month to earn that amount of $1000. So, initially advertise about this service, at least for the first 2 months.
- For residual income, focus on Hosting packages reseller – By doing reselling of hosting packages, you will be earning around $200-$300 every month at the initial stage. But there is no reason to get disheartened as the magic here is the power of compounding, which can fetch you huge returns in the long run. Every month this $200 will get added on and in addition to this, there will be a recurring bill of $100 to $200 every month.
In this way, at the end of sixth month, your profit margin can be $200 + $200 + $200 + $200 + $200 and that is equal to $1000. Hence after six months, you will be earning a sum of $1000 per month just simply retaining the existing customers at hand. The biggest surprise of this residual income is that you can continue earning $1000 a month without getting a single new customer. Just from the renewal of the existing customers you can take away $1000 a month and smile your way to the bank.
3) FOCUS ON “SERVICES” AS THAT IS THE KEY TO RENEWALS
In order to retain your existing customers, you must give them good service. That is the reason you must do reselling of a good web hosting company so that you get their support if any of your customers face any problem. If the existing customers are happy with your service, they will renew every time and that will be added in your residual income. Service is very important if you want to get the renewal of your existing clients.
4) MAKE ADVERTISING A CONTINUOUS EFFORT
From the money that is coming back always continue investing a part of it into advertising again. Regular advertising will help to create a brand for your business in the minds of the existing clients and draw in a steady flow of customers. If you continue with this effort, maybe at the end of the second year, you can see a monthly earning of $4000 to $6000 every month.
5) ADD SOME EXTRA SERVICES
You can also add some additional services like selling a VPS hosting or assisting the client in making of his or her website. These services can fetch you extra income from the same platform where you are selling web hosting packages.
Reseller Hosting as a Residual Business: Conclusion
By first focusing on finding out what your customers need and then working to fill those needs you can create a quality service for them that will have them recommending you to their friends. This can quickly build into a nice residual income business.