What is white label hosting?
White label hosting is a franchise agreement to use another company’s products and services as your brand. The offeror is usually a strong, established company, while the recipient is a small company with a limited capital base.
Let’s use this example: Company A is a multi-million dollar web hosting company and Company B is a small home based web business. Company B wants to create a lucrative Internet business, but does not have a large investment budget, but partners with Company A to use their web products and services. Company A agrees to charge an annual or monthly subscription fee and provides administrative support to Company B.
This business arrangement is mutually beneficial for both companies, even though one is fully established. So the question is asked, “How effective is this for the business world?” Research has shown that many small internet marketing businesses today are moving towards white-label web hosting to get their share of the multi-million dollar internet marketing pie.
Why White Label?
Although white labeling uses the trade name of one company to market products and services that belong to another official company, it creates opportunities for both markets. Corporate companies allow small businesses to benefit by using their already established products and services and this helps large corporations to expand their business to other areas in small pockets.
White labeling also allows business owners to place brand names on the items they sell, giving the business full credit and commissions on sales without revealing the vendor’s brand name.
How do large companies in general benefit?
Corporate businesses benefit from charging a reseller license or fee like a franchise agreement. This is often affordable as these funds provide customer support, business processing, and other administrative services for the subscriber.
Additionally, awarding white-label contracts takes the pressure off larger companies when it comes to retail marketing. White label web hosting could be similar to wholesale. As wholesale providers, small businesses can remarket their products and services to retail customers.
Benefits for the web hosting reseller
Finally, thousands of resellers today are profiting substantially from setting up a retail web hosting business. They have fewer overhead, inventory, staff, and administrative functions to handle. The biggest benefit for these small businesses is the fact that they have BPO (Business Process Outsourcing) that take care of technical problems for their clients.
If you want to be a white-label web hosting reseller, a lucrative opportunity awaits you. Join hundreds of digital marketers incorporating their businesses with web hosting and domain name services for their clients.