A web hosting reseller buys a particular web space from the web hosting company at a discounted price, or at a wholesale price. After buying the space, the resellers sell the space to the third party.
In other words, a web hosting reseller acts as a middle man between the web hosting company and the third party. Throughout the process, the third party becomes the client of the reseller and takes the benefits of the available hosting resources, including the disk space and bandwidth allowance.
Marketing Aspect
Web hosting companies typically save huge bucks on their reselling plan. It seems like a leasing plan that is transferred from one host server to another instead of buying or maintaining their own.
So, in other words, resellers just create a marketing platform and from there they sell others product to earn commission. In most of the cases, the services offered by web hosting resellers are so advanced and effective that the consumers do not really bother about the existence of the end sellers.
Customer Dealing Aspect
In most of the cases, as told above, the customers do not really care about the actual company that is actually their host.
Rather, the resellers are so good with their services that make the customers not to even become aware of the fact that they are dealing with the resellers who do not actually own the hosting company in practice. Since resellers are able to select from a wide range of dedicated hosting options, they are in position to offer their customers the best possible web hosting plans.
Revenue Generation Aspect
There are many resellers around the world who are making quite a handsome amount with their web hosting reselling business. Of course the people who are into this reselling business must have a clear idea about the profit margin and the quantity of reselling to make a good turn over.
The revenue generation aspect depends on the fact that a reseller can buy, for instance, nearly 1200MB of hard disc space from the hosting company with a price of about $30 per month. After that they can repackage this hard disc space into smaller packages to sell them out to different third party clients.
Even though there are few hosting companies that only offer limited privilege to their resellers, a huge numbers of hosting company actually prefer to provide the complete privilege in order to maximize the potentiality of the service both at resellers end and third party clients end. This eventually helps them to have a strong base for their business as well.
Now when a reseller buys 1200MB space with a price of $30 per month, if he split the space into 24 segments with a size of 50MB each and sell them with a price of $10 per month, it means that the reseller sells the web space with a monthly fee for $240, while he has bought it only for $30. The profit of course varies depending on the package he has to offer to his clients.
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