Value-Added Hosting for Resellers

(Ping! Zine Issue 14) – Reselling. It’s a great way to break into the website hosting business, isn’t it? And yet it’s so easy to lose your way and become like every other hosting provider out there. Ahhhhh, the joys of being a hosting reseller!

But, did you know that there are indeed many ways to differentiate your hosting company and stand out from the crowd? Yes, it is true – you can rise above the rest in your own little niche, while fulfilling your dream of owning a hosting company that contributes value, and adds to others’ successes. Although it’s not necessarily easy, it can be done in a few simple steps.

The first step starts at one of the basic fundamentals of your business: pricing. Although it may be tempting to compete with GoDaddy and others who offer hosting at extremely low prices, this is not the required path to success, especially if you’re just starting out. You want to make sure that you are covering your costs and turning a worthwhile profit before pricing yourself out of existence. If you can price at the levels of GoDaddy and others, great. If you can’t, don’t lose any sleep over it! Both HostGator and Site5.com have shown remarkable success at the $6.95 per month price point – well above the $3.95 per month of GoDaddy’s cheapest plan.

So, the first thing you’ll need to do is calculate your expenses. Then, decide how much of a profit you would like to make. Only after determining those numbers can you arrive at the price you’ll charge for your hosting plans. Instead of working from the top down (setting your prices and molding your business around them), work from the bottom up, structuring your business and setting your prices to match. I guarantee you that you’ll have a much greater chance of success, just by following this first step alone.

Step two involves locating any efficiencies and advantages that your hosting services might offer without any value-add. Do you use particularly fast servers and internet connections? Are you using proprietary control panel software? Do you offer unlimited e-mail accounts and MySQL databases? Examine your offerings and look for those things that would immediately attract your attention if you were shopping for a hosting provider yourself. Pull out a sheet of paper and write down everything you can think of that stands out to you.

This is a fairly simple and easy-to-understand step, so that’s all the time I’ll spend on it. If you can’t locate anything in this area, don’t worry – it doesn’t mean you’ll go the way of the dodo bird – just keep reading!

The third thing you’ll want to do is decide which market you’re going to target. Are you going to host real estate websites, chiropractic websites, small e-commerce websites, or something else? Or, are you going to strive to cater to everybody? While the latter can be a very profitable strategy for many, there are already many hosting providers who have found greater success by specializing in a certain niche. For instance, a while back I came across a company that had just started a host for garage bands. As long as they advertise in the right places (where these bands will see the ads), they should have no problem competing and carving out a niche for their business. This is the only host I know of that is targeting this market (and likely the only host many are likely to find targeting garage bands). The lesson is that targeted marketing works if you can make an emotional connection between your potential customers and your service.

Once you know who you’re selling to, the fourth step is very simple. Ask yourself what website-related services you can add to your hosting packages to entice your target market to purchase from you. This is where the value-add really comes into play. What will set you light-years apart from your closest competitors? Perhaps you can offer a budget-priced website hosting/design package where you provide both their website hosting and design a simple website for them. Or, perhaps join forces with SubmitNet or Template Monster, through their affiliate programs, and offer their products to your hosting clients once they have signed up for hosting. My company has done this, not only to differentiate our offerings, but also as another way to pull folks into our website – and it works! Find something that is beneficial by itself, and then make sure it is relevant to your target market. Depending on the impact of the items you choose, you may need just one – or you may need several.

The possibilities in this area are absolutely endless. The main thing is to be creative and come up with combinations that you know your target market will love. Know your market, and this will be easy. As long as you’re making money, providing affordable services, and keeping your clients happy, there’s nothing to lose, and a whole lot more to gain! Happy hosting!

Daniel J. Briere is the Founder and Chief Executive Officer of GlobalWebBrands, a website hosting reseller company through LiquidNet, HostCentric, and XO Communications. He can be reached at [email protected].

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