Most people either already own their own website or will own their own website in the future. These websites range from small startups, wedding invitations and information sites to personal blogs where owners can vent their feelings or share their insights with others. As of 2018, there are 172 million active websites online. Active meaning that they receive traffic on a regular basis. In 2017, the average spent amount a customer spent on web hosting services was $200. If we do the math we can see that people and businesses are spending about $30 billion yearly on web hosting. This guide will teach you all you need to know about reseller Linux web hosting using WHMCS, WHM and cPanel and how you can use it to grab some of the billion dollar pie.
Table of contents:
- Selecting a reseller
- Setting up
- Pre-sale testing
- After going live
- Pitfalls to avoid
- Final notes
- Links to mini-guides
Selecting a Reseller
There are many hosting companies online that offer reseller hosting, VPS, or dedicated servers. Each one has its own unique selling point to try and get your business. There is a distinct difference between the three, however, all three can be used to start your own web host reselling business. The three different options can be summed up as follows:
Reseller Hosting Servers
Reseller hosting is plans that come pre-built (or set-up) with the express purpose of reselling space to new hosting clients. Most reseller accounts are hosted on the reseller providers servers and are shared between many clients. There is little to no set-up required on your part other than your WHMCS installation if you choose to have one. All the WHM and cPanels are pre-installed that you may start selling in almost no time at all. These are the most cost effective and common server options for people looking to start their own reseller company.
Virtual servers are just what they say they are. They are virutal servers that are set up on a physical server by your provider. One physical server could host a variety of different virtual servers and so the physical resources are shared among them. Virtual servers require slightly more set-up from your part and could require you to install your instances of WHM/cPanel. They do, however, come with the added feature of being able to use a part of your virtual server for reseller hosting and a part of it for other purposes (such as cloud storage etc.).
Dedicated servers that are rented from providers are physical servers that you alone are hosted on. This means that all of the servers resources are managed and usable by you and you do not have to share it with anybody else. While these tend to be considerably more expensive than reseller or virtual servers, they do come with the benefits of having your own server without the headache of building it yourself. They require a fair amount of set up, including your WHM/cPanel installations and, like virtual servers, be split to be used as you would like.
Some Reseller Providers
Just a short list of hosting companies that offer reseller hosting, as well as what is included in each package, are:
Liquid Web (liquidweb.com)
Liquid Web offers you a wide range of options that vary from dedicated to cloud hosting. Prices for virtual hosting start from $59 for 40GB and range to $189 for 200GB per month. You may also select to purchase dedicated server space from $199 a month for 1TB to $599 per month for 960GB. All drives are SSD as standard and include dedicated IP addresses and protection firewalls. While you need to do your own Linux installation with any dedicated server hosted by Liquid Web, all virtual hosting packages come standard with a large number of features. These include unlimited client accounts, cPanel/WHM, a free WHMCS lisence, root access to the server, local backups, as well as cloudflare integration.
A2 Hosting (a2hosting.com)
A2Hosting offers you a choice of 4 hosting options starting from $13.99 to $40.91 per month. Each option comes with its own space and bandwidth limit as well as maximum amount of clients ranging from 40 to 100. All the packages except for the lowest ‘bronze’ level also include a free WHMCS license. Other features that all 4 packages offer include free SSL and SSD, the WHM control panel, a free eNom Domain Reseller account as well as a great anytime money back guarentee.
SiteGround offers a change to the usual reseller option by offering reseller credits. These credits translate to one reseller account per credit. Each credit comes with unlimited bandwidth, a free SSL certificate, and 10GB of disk space. These credits can be purchased from $42/credit for 11+ to $49/credit for purchases less than 5 credits. All reseller accounts also come with 24/7 support as well as advanced security and backup facilities to ensure that your data is never lost, corrupted, or stolen.
Reseller Club (resellerclub.com)
Reseller Club offers 4 dedicated reseller packages that start at $18.99 for 40GB per month and range to $42.49 for 200GB per month. All but the lowest plan include a free WHMCS license. As standard, all accounts also include a free SSL certificate, CloudFlare integration, unlimited client accounts, unlimited emails, WHM/cPanel, 24/7 support, and a 30-day money back guarentee. They also offer a free domain reseller account to anyone that purchases a reseller hosting account with them.
Host Dime offers you a choice of 3 VPS options for you to choose from as their reseller package. All packages come standard with 15TB monthly bandwidth, 2 usable IP addresses, and cPanel/WHM installations. Prices start at $75 per month for 60GB of SSD drive space and go up to $150 per month for 140GB of disc space on the highest package. The packages also all include a 1Gb/s uplink to offer you super fast loading from wherever you are.
Selecting the right reseller can be tough when you are bombarded with offers from every corner you turn. This could be made even tougher when you start hearing about things that they offer that you are not 100% sure of what they are. As with most things, there are some things you want but don’t need, some things you need but don’t want, and some things that you just cannot do without. To check out what these things are, check out our Selecting a Reseller guidelines.
Once you have selected the reseller that you would like to use, the fun begins. For the purpose of this guide, we will be assuming that any reseller that you choose offers WHM, cPanel, and WHMCS as standard as part of your package.
Once you have bought your reseller package and either bought or linked your domain to the package, you can begin with setting up your reseller web hosting business. This entails following the below steps:
- Set up your server using WHM. For a brief overview on how to do this, check out our WHM Set-up guide.
- Create the web hosting options that you would like to offer through your site using WHM. When doing this, select what cPanel options you would like available to your clients, as well as storage and bandwidth limits. For details on how to do all this, view our WHM Set-up guide.
- Install WHMCS on your domain. This can be done through your cPanel using your Softaculous installer that comes standard with almost all cPanels. Ensure that you do not install your copy of WHMCS on the root of your web server. Instead, create a folder in your root ‘public_html’ file and install WHMCS into this folder. This folder can be named anything of your choice, but remember that it will be publicly visible. For instance, if you create a folder called ‘dashboard’, any user movement done within the WHMCS client will be at the address https://www.yoursite.com/dashboard/webpagename.php.
- Link your server (WHM) to your WHMCS, create product profiles, set up payment gateways, automate the system, and see how to manage clients. To see how, take a look at our WHMCS Starter Guide.
- Link your main webpage with all your offerings to your WHMCS platform.
- Start your pre-sale testing.
Once you have completed all the above steps, you are almost ready to start selling your hosting packages. However, there are a few things that we would highly recommend that you do before you go live and start allowing clients to sign up for your services. They are:
Check Your Pricing
Make sure that your pricing is competitive. While you may need to lower your margins to undercut your competitors until you have a stable client base, just remember that clients will notice each price increase that you place on the site, even if nobody questions it.
When selecting your prices, ensure that you are pricing your hosting offers at prices that will not only get you business initially, but are also sustainable for a minimum of 8 months to a year. After that, prices should only increase a maximum of once per year. Ideally, you should only increase your hosting prices every 3 years.
That being said, if you are wanting to reduce your pricings, instead of changing the prices on your live site, rather offer new clients discount vouchers or monthly specials with the lowered price. This not only keeps your pricing structure stable, but also makes clients feel like they are getting more for their money.
Test Your System
This is one of the most crucial things that you need to do before accepting any clients! Any glitch that a potential customer encounters on your site while trying to sign up for your hosting products could potentially cause them to abandon your site and go to your competitor. Make sure that you fully test your entire system by registering a test account. Pay for the account using your payment gateway (the money is coming back to you anyway) and check any issues that you encounter. If you do encounter any, sort them out and then test the system again.Only once you are able to register, maintain, and change a client account on your server will you be able to sell your hosting packages with confidence that no customer will be put off and go somewhere else.
Check Up On Your Competition
While you probably have done this in the course of researching your business and seeing what the going rate for certain hosting packages is, keep tabs on what the competition is doing. See what new features they are offering, what sales they are having, as well as what people are saying about them. This will not only show you what you need to adapt within your own business model to remain competitive, but will also give you great insights into what people are looking for when selecting their web hosting provider. You can then use this knowledge to tweak your own operations to ensure that you can offer the exact things that people are looking for.
Link Social Media Accounts
Many people today use a company’s social media account as a gauge on whether they can trust the company, as well as a means of interacting with you as the owner of the company. While you do not need to be registered on every single social media offering out there, we do recommend at the least that you have an active Facebook Page and Twitter accout. These will allow you to advertise your business as well as interact with your customers. They also provide a platform where clients can rate your business in a safe and unbiased environment. And remember, a good review will go a long way in gathering you a following and signing up of new clients.
Once you have done these things, you should be all set to start signing up as many new clients as you can.
After Going Live
You’ve tested your site, made sure that everything is in place and functioning properly, and signed up your first few clients. The standard thought is that now you can sit back, relax, and watch the money come in. Unfortunately, starting your own web hosting company and getting enough clients to cover your monthly fee that you pay to your reseller hosting is not as simple as it seems.
You now need to be actively involved in getting your name out there! We cannot stress this point enough. Lack of clients means lack of income which means operating losses. No matter how many clients are using your services, your reseller hosting is still expecting their pay at the end of the month. In other words, no clients means no income. No income means that your monthly fee for the reseller services will be coming straight from your pocket. This means that you need to advertise! Once you have advertised, you need to advertise some more. And when you think you are done, do some more.
Advertising is the biggest way in which you will gain a client base. It can also take on many different forms. Due to the nature of the business of web hosting, one of the most effective ways of advertising is online. This could be in the form of paid Facebook advertising or Google AdWords. Both are good ways to get your brand and your services known by the public and result in a good chance that you will sign on a few clients.
Pitfalls to Avoid
When you are thinking of starting your own web hosting business, you probably went through the list of things that you need to be sure of and the things that you need to avoid. Sometime though, the most obvious things are the things that make the largest difference in the success of your business. Below are some of the biggest things that in our experience could be the make-or-break of your web hosting company:
Starting Too Big
You may be tempted to take the biggest package available from your reseller in order to avoid the hassle of having to upgrade your account in the future once you have a certain amount of clients signed up. The problem with this is that your monthly fees will be substantially more than if you start on a lower level offering. This means that until you have enough clients paying you each month to cover your cost, you will be paying out-of-pocket to maintain a webserver and hosting company that may not have any clients for the first two or three months.
The better thing to do is start your business on a low level plan until you are almost reaching your quota (either of space or allowed clients). Most reseller packages come with the option to upgrade instantly at any time. So, rather start small and use the money that you are saving on advertising and landing new clients and then upgrade your account if and when you need to do so.
Web hosting is a very competitive market. There are many web hosting providers that offer similar packages at relatively standard prices. Grabbing a slice of the web hosting pie is not easy. It is, however, easy to become despondant when, after your second live month, you still have little to no clients.
It is at this point where you might give up and decide that it is better to rather give it up altogether. However, persevere and keep on trying to pull in new clients. Eventually you will see that your monthly costs are starting to be met and that you are turning a profit. This may not be even within the first 6 month. But, if you persevere and continue with what you are doing, you will eventually reach the break-even point and then surpass it.
Something in human nature means that we appreciate being looked after once we have purchased a service from somebody else. This means that you need to be active in engaging with your customers and ensuring that they are happy with the service that you are offering them. One of the greatest pitfalls of hosting companies is when you sign up as a client and the provider they think that their job is done and you become no more than a customer number on their income statement.
Use annual surverys and customer questionaires to engage with your clients and ensure that they are happy with your company. If they are not, take their criticisms constructively and work on ways that you can change the negative so that it does not occur again in the future.
Nobody likes dealing with support. It is often the deciding factor in peoples’ opinions of you and your company. A bad support experience can tarnish your reputation almost more than anything else. Ensure that your support is run efficiently and proactively. WHMCS comes with a great tool known as the Knowledgebase. Ensure that you build up your knowledgebase with all the most common support queries that people will easily be able to find answers to all their questions at any time or day, without having to contact you specifically for support.
Then, also make sure that your support department is at the top of its game – even if it is only you at the start. Respond to support queries quickly and make sure that you have helped the client with every part of their query, even the queries that are not blatantly obvious when dealing with them. This will significantly boost their opinion of you and your business and will more than likely lead to them recommending your services to others that are looking for a hosting provider.
Starting your own web hosting business could be daunting. The set-up of automated systems, things going wrong, and the initial cost outlay could easily put you off. However, there are great benefits to running your own web hosting service. We hope that this guide (as well as all the supplementary guides linked to it) have given you some good insight into what all is needed to get up and running, as well as what things to avoid when you are starting out.