Most businesses have websites and an increasing number of businesses are online-first or even online-only. In much of the world, online adoption is still growing at a phenomenal rate. As a result, there is a lot of demand for web hosting. You can make a great recurring income by offering it. This post will explain how you get started.
1. Decide whether you want to run your own web hosting service from the ground up, or resell another web host
To dive through a hosting business, you can choose whether to build it yourself or join a reseller hosting. If you build the hosting business from scratch you might need to buy servers, or take colocation, and hire systems administrators and network engineers. This could mean an investment of hundreds of thousands of dollars and require significant staffing.
It is therefore preferable for someone with financial resources and technical expertise to own the hosting company. However, once that is done they can offer services which are dedicated hosting, Virtual Private Servers (VPS), and shared hosting while operating and owning the full infrastructure themselves.
If you find too many technical issues in managing your server, you may consider reseller hosting. Reseller hosting is the practice of buying hosting resources from a larger hosting provider and reselling the smaller portion of the space to your customers. This allows you to focus only on client acquisition and support, and then leave the server management to the parent hosting company.
Most good web hosting providers offer reseller plans that often sit on top of cPanel/WHM. We will explore reseller hosting in a future article.
One important thing: usually your clients will not know whether you have set up the hosting infrastructure yourself or if you are reselling another provider. Most hosting providers offer white-label reseller accounts.
Note also that you can always upgrade your hardware and move from a reseller to your own systems as you grow.
2. Decide if you also want to sell domain names and how
It could be a strategic decision to determine whether to include domain name sales in your web hosting business. Selling domain names in addition to hosting services has the benefit of giving clients a complete solution, which could simplify their requirements for an online presence. Because clients value the efficiency with which they can obtain domain and hosting services from a single source, this strategy can improve customer satisfaction and brand consistency.
At Upmind, we offer reseller domain names and have integrated with various providers, supporting multiple options including Demo Provider, Enom, OpenSRS, Hexonet, ResellerClub, NetEarthOne, Nominet, HRS, Connect Reseller, OpenProvider, Namesilo, GoDaddy, NIRA, Ricta, Namecheap, UK Registry, Realtime Register, Internet BS and CentralNic. We continue to add more integrations. To learn how to begin selling domain names using Upmind, check out our article for detailed guidance here.
3. Decide how you bill and manage your clients and orders
There are tons of software available right now that helps with billing and client management. One of them is Upmind, which offers a free plan for up to 50 clients and is a very comprehensive application for beginners. Upmind will become the core of your company's operations by merging powerful e-commerce features like client management, e-commerce, and billing into a single cloud application.
4. Do some market research on competitors and work out what their plans and prices are
Conducting in-depth market research is the most important thing you need to do before starting a hosting business. It helps you to analyze the competitors’ services, pricing options, strategies, and shortages to gain a competitive edge. By knowing their details, you can differentiate your hosting services and guide your position.
First, if possible you can start by providing your client with the shortage that the competitors lack. Keeping the good offers, you also can give an initial discount to be glanced at by your lead and keep the client to stay longer with you. It might be a loss at first but it shows that you are very loyal to your client, it’s one of the strategies to remember as it’s a recurring payment so client satisfaction is important to build long-term client relationships and you earn money monthly.
5. What is your USP - Do you want to target a specific area or a specific piece of software like WordPress, or do you offer free migrations or excellent support?
Clearly defining your Unique Selling Proposition (USP) is important to differentiate your service from another hosting provider, especially in attracting clients among the competitors. Are you trying to figure out a market for yourself by focusing on a particular region and offering customized hosting solutions to nearby businesses?
Perhaps you're an expert in a particular piece of software, like WordPress, and you create your products to be as efficient as possible for users of this common platform. Offering free migrations is a powerful USP that facilitates client transitions and sets your hosting services apart. On the other hand, creating a solid reputation for providing excellent customer service can give you a big selling point and promote long-term relationships with clients.
6. What else do you want to sell as add-ons?
Differentiate yourself from competitors by providing value-added services like performance optimization, backup solutions, and website security. Consumers are prepared to spend more for services that improve hosting overall and safeguard their digital assets.
Creating website templates or themes is an original approach to getting money in the web hosting sector. Create unique and eye-catching themes that work with well-known content management systems like WordPress, then market them on online marketplaces or your website.
What is the secret?
Understand that a web hosting business is all about recurring revenue. It’s all about getting customers in and keeping them happy. Because while $10/mo doesn’t sound like much, no one will ever move to another provider if you give them good service for $10/mo. And if you have 100 clients, then that is $1000/mo, or $12000/yr, forever.
You can offer initial discounts and incentives for clients to join you. Because you can make a loss in the first year, which will recover in future years.
Your advantage is your time and effort. Established companies or corporate companies don’t have your dedication and graft. Think why customers would trust you.
Summary
There are many ways to make money online, particularly if you're interested in starting a hosting business. You can start it as a reseller hosting and then sell some space to your customers. It allows you to focus on client acquisition and support them rather than worrying about server management, which is now the responsibility of the hosting provider. Additionally, this could be your source of passive income.
Establishing a long-term web hosting business means putting recurring revenue initially, keeping clients satisfied with high-quality service, utilizing initial discounts - even if they cause a temporary loss but it could build a long-term client relationship, and using your commitment and hard work to stand out from competitors.
