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rezzy
05-08-2009, 02:31 PM
I have been considering for a few weeks now, opening another site where its purpose is to sell hosting.

It would require a low amount of work from me, hopefully. Could be a nice secondary source of steady income. I can use a well known package to manage clients and I would only be concerned with help clients when they needed help.

I know Steven will have something to say, but I have had the host for a little more then a year and have little to no downtime.

Whats the general idea about this?

vangogh
05-08-2009, 06:07 PM
Your first thought should be who will your hosting be for. Is it just going to be for your design clients or are you planning on dedicating a site to hosting?

Hosting is going to be a low margin business. You'll need a lot of customers before you're really making money. That's not to say you can't pick up some decent extra money each month.

You'll likely be reselling someone else's hosting so you'll want to look around at different hosts and compare how they're reseller programs work. The hosting company will still be responsible for making sure the servers are running and they'll likely be the ones updating the main server software. You will need to manage things for your customers, though sometimes that management will mean being the intermediary between your customers and your host. They email you and you email the host.

If you're planning on offering hosting to design clients who you'd probably be managing hosting for anyway then it makes sense to offer it to them. You'll basically make $5 or $10 more per month on each client. If you do plan on opening this up to the public know that you'll have to offer support services.

rezzy
05-09-2009, 05:50 AM
I do already have the account that allows reselling. The plan was to open up another (site)arm of the business and have that work.

Advertising, will be biggest thing, i think. The market is quite crowded.

What kind of support issues do you think I will encounter? I have been with them about a year and have had little to no problems. Was your experience different?

nighthawk
05-09-2009, 11:34 AM
I have considered setting up a hosting company a few times, however I just feel the market is far too crowded and the profit margins ridiculously low. You will be lucky to achieve $5 profit per account - assuming you can fill the server. As soon as you start getting a few clients you will start to get support requests, which are going to steal time away from your other businesses.

I may offer hosting to my clients, but will not be setting up a hosting business any time soon.

vangogh
05-09-2009, 12:12 PM
Bryan, when it comes to shared hosting there's a bit of luck involved. Your site is going to share a server with many other sites. If just one of those other sites is a resource hog or gets huge amounts of traffic it could affect your site.

You haven't seen issues, but you could sign up someone with that same host and they could have issues because they ended up on a different server.

You have to be prepared for people emailing and calling at any time they notice something is wrong with their site and you have to deal with. A few years ago when I offered hosting someone signed up for the highest package I offered. It made me $15/month. That first month he needed some hand holding to set things up. I probably spent a couple hours helping. The next month his credit card didn't go through and I needed to send him several emails before he put more money on his card. He also needed another hour of help setting up email or something like that. Months 3 and 4 also had the credit card issue and in month 4 he canceled and I didn't get paid for that month's hosting.

So in the end I spent maybe 5 or 6 hours of my time to make $45. Let's use 5 hours for the easier math and I earned $9/hour for his account. Do you want to be making $9/hour?

Hosting margins are very low. It's a volume business. If you want it to work offer hosting only to clients who's sites you're going to manage anyway. Or make sure to offer something of additional value so you can collect $50/month instead of $5/month. Basic hosting is going to be a volume business. Having 10 accounts probably won't be worth your time. Having 1,000 will. It's not easy though to gain 1,000 hosting customers.

I switched to affiliate hosting. Most web hosts offer an affiliate program. Some people will naturally ask me where to get hosting. I know who I'd be recommending and I just check to see if they have an affiliate program and if so I'll sign up. I might as well collect a little money for a recommendation I was going to give anyway. I find I make about the same amount of money as when I was reselling without having to deal with the support calls/emails.

In the future I may go back to offering hosting to my clients, but it would my clients only and even then only for those who would be asking me to managed their hosting account in some way anyway.

SteveC
05-09-2009, 08:45 PM
We have our own servers and used to also offer a range of hosting packages to anyone that wanted them... now we only host our clients websites, this means that our servers because they are never overloaded are fast, performance is good and because we design the websites we have some specialist software installed... however to maximise income we aim to sell a hosting and maintenance plan to all of our clients.

rezzy
05-09-2009, 09:46 PM
I currently offer hosting to my clients, but was considering spinning it off onto its own section.

vangogh
05-10-2009, 01:06 AM
You certainly can. Just know it's not as easy as it sounds to make a good income from it. It's a business like anything else.

rezzy
05-10-2009, 06:06 AM
I truly understand that it could be losing business idea. I have looked for tools to reduce my losses. I think it might be interesting market to jump into. For better or worse.

nighthawk
05-10-2009, 07:50 AM
I truly understand that it could be losing business idea. I have looked for tools to reduce my losses. I think it might be interesting market to jump into. For better or worse.

There's definitely money to be made in web hosting - if there wasn't, no-one would be doing it. However it is not an easy business - its very cut throat, and turning a profit to make it worth the effort is going to be difficult.

vangogh
05-11-2009, 09:37 AM
No reason you shouldn't try. Think about ways you can provide more value than a typical web host. You're not going to win based on price and volume. If you can come up with a way to add something more you should be able to charge more as well.

Also look into specializing. Lately you'll see hosts offering what they claim is WordPress hosting or something similar. I'm guessing it comes with a free install and includes everything needed to run WordPress. Not that you'd have to do the same, but maybe look for a way to offer specialty hosting.

rezzy
05-11-2009, 03:28 PM
Thats a good idea, and right oafter I ran to godaddy for wphost.com, gone!

Now, I will have to stop be more creative.

rezzy
05-14-2009, 01:03 AM
So, I was pondering a domain name to use. Is using a Web 2.0 name a bad idea?

Like Quadel or Mudel? Good or bad? Both these domains are taken, so nothing to lose. :)

vangogh
05-14-2009, 01:14 AM
As long as it's easy to say, remember, and spell you should be fine. Hosting is very competitive so if you do want to pick up search traffic you may want to get the word hosting in the domain.

You may also want to choose something that describes the business in some way. Again using hosting comes to mind, but beyond that say you were using servers that were more energy efficient and your company was environmentally friendly. You might then want to get "green" in the name or something similar.

rezzy
05-14-2009, 08:38 AM
The problem I am caught between is finding a name and placing "host" in it. Although I know of a successful hosts that dont incorporate 'host' into their name. ie) media temple, mosso and others.

This is not to say, I dont agree. Its hard to get host and a domain which isnt being held by a cybersquatter or a defunct company.

vangogh
05-14-2009, 10:59 AM
You should be able to get hosting in there. Take the two names you mentioned above. I'm sure quadelhosting and mudelhosting would be available. You don't need to get hosting in there, but know that sites like media temple and mosso already have a brand and their names are known. Your name won't be known at first so if you can capture some search traffic around the word hosting it might be a good idea.

In the end it's more important to make sure the name is easy to say, remember, and spell.

rezzy
05-14-2009, 02:07 PM
True. I will keep searching about for something.