There are a number of very good reasons why people get involved in running their own online businesses. In a down economy, more people are doing this all the time. Reseller hosting is becoming a huge online business opportunity, because everyone who wants to run any business needs to have at least an online presence and/or website to operate effectively in modern markets.
The definition of reseller hosting is essentially; buy a dedicated server or hosting plan to sell services to the end user. This type of business can be started on a very small scale, and even the big web hosting companies do the exact same thing as the small reseller, only on a much larger scale.
The advantages are many and some include; regular recurring revenue, a massive market as almost everyone wants and needs a website, currently there is not a lot of competition, and the small operator can easily compete with the big ones.
Basically, your company buys, for example; 1000 MB of disk space and the same bandwidth as a package. This package is then divided into ten accounts, each with 100 MB of disk space and bandwidth. These smaller packages are resold to end users who are your customers.
Money works this way; a package of 1000 MB of disk space and bandwidth costs, say, $15 per month. Smaller chunks of bandwidth and space can be sold for $10 each per month. The scalper earns $100 and makes a profit of $85.
Obviously, this explanation is a very simplified version of the business, but it is not difficult to understand the industry and the concept that there is a lot of money to be made. Buy disk space and bandwidth in bulk, then sell it in smaller chunks.
Choosing a bulk provider is a very important consideration and something that needs to be done right the first time. It is important to find a company that meets all the needs of your clients or potential clients, because it is not easy to move clients to a new host if necessary. Moving is a time-consuming process that should be avoided as much as possible. Hence the need to make the right choice from the starting line.
Creating a business plan and deciding on the market for the service is also very important, but creating a short list based on background checks of reseller web hosting companies is also just as important. It is worth remembering that you will be selling a third party product to your customer, and it is your good name that is at stake.