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The naked truth about reselling

01 Jul 06

WebFarm’s general manager, Adrian Sole, explains the opportunities for your business in reseller hosting partnerships.

Is your business missing out on these easy sales?

Your customers see you as the expert on all web related and/or IT matters and trust your advice implicitly. Yet why, when they ask for a recommendation for online services such as domain name registration, web hosting or e-commerce, do many IT professionals refer them to another company? With an ongoing revenue stream of over 60 % in margins to be made (yes that’s right 60 %) it’s an opportunity worth investigating. Here are some typical perceived barriers to reselling and the basic truths of today’s industry.

Time: I don’t have time to set up a separate arm of the company.

Did you know that setting up a reseller account is as easy as adding a bullet point to your services page? At WebFarm you fill out a simple online application to establish your status and then you’re set up with an account that gives you control to manage your client’s domain, hosting, e-mail and eCommerce needs. As with the retail side of the business, accounts are set up quickly to allow you to provide timely services that your customers depend on.

Cost: I don’t have the money to invest in a hefty set-up fee.

There’s no need to worry about upfront capital to set up an account, for most accounts there’s no deposit, setup fee or revenue sharing. You can simply add hosting to your customer’s current invoice and collect your margin. WebFarm invoices on a monthly basis giving you the opportunity to have ample cash flow. With the convenience of outsourcing you’re freed from purchasing servers, dedicated data rooms, stand-by air conditioning and generators, multi-tiered firewalls, 24/7 security, disaster recovery and more.

Knowledge: I don’t know much about the hosting industry.

You probably know more than you think and the timing is perfect to become an expert in this area. As a reseller, customers will most likely want to know how to set up a POP email account in Outlook or their control panel, what domain extensions are available to them and how to update their site. WebFarm provides resellers with an introductory manual and support staff to walk you through the process.

With a gain of 3.96 million new web sites in May 2006 (Netcraft survey) alone, there’s a huge profitable reseller market just waiting for you. It’s also an excellent opportunity to provide your existing customers with a broader portfolio of services that can assist with the growth and productivity of their business.

Just to give you an idea of the profit potential let’s look at two sample situations:

Situation 1: Reseller sells on average 4 hosting plans, 2 domain names, and 1 email only account monthly for a 12 month period. At the year’s end reseller has 48 hosting plans, 24 domain names & 12 e-mail only accounts for a grand total yearly profit upwards of $2,500.

Situation 2: Reseller sells on average 10 hosting plans, 5 domain names and 2 e-mail accounts monthly for a 12 month period. At the year’s end reseller has 120 hosting plans, 60 domain names & 24 e-mail only accounts for a grand total yearly profit upward of $9,500.

*These prices are assuming a low resell amount of $14.95 per hosting plan, $39 per domain name, and $4.95 per e-mail account. Meaning that there’s ample room for even greater profit and these numbers will compound as your business grows