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A reseller hosting account is a particular type of web server hosting plan that allows the reseller to buy the hosting services at a discount, or at wholesale, and then offer the hosting to a third party. The third party then becomes a client of the reseller and their hosting resources, such as their allotted hard drive space and bandwidth allowance.
Resellers of web hosting plans are simply entrepreneurs who are acting as middlemen. They offer the hosting services that they have leased from another web host's server rather than purchasing and maintaining their own equipment.
Most of the time, the quality of services that are offered by resellers is so good that the consumer is not aware that they are dealing with resellers who do not own their own web servers. Because they can pick and choose from many dedicated hosting services, the resellers are in a position to provide their customers with the best of web server hosting plans.
There are many reseller hosting businesses that are quite successful and profitable, and anyone who understands the margins and the numbers can turn some profit in this way. The basis of the profit comes from the fact that a reseller can purchase, for example, approximately 1,000 MB of hard drive space from their web server hosting provider for about $25 a month. They can then repackage that allotment of resources into smaller packages for numerous customers.
It is typical to be able to sell a web hosting plan that provides people with about 25 MB of space for a price of about $5 per month. The reseller then has the ability to create 40 hosting packages, and the monthly income could be about $200. While this is not a huge amount, it is basically turning a $25 per month investment into $200, and this process can be repeated to support as many customers as the reseller is able to find.
Often, when a new hosting company is first starting out, there isn't enough capital to provide the necessary round-the-clock server maintenance, in addition to trying to market and grow their new web server hosting venture. In this case, a new hosting company can start out as a reseller of hosting services and operate that way indefinitely, or until they have enough customers and revenue to justify the capital expenditures to purchase their own dedicated web servers, and hire the support staff to manage and troubleshoot the equipment.
In almost all cases, when a reseller hosting arrangement is established with the web server hosting company, the reseller is able to set up custom web hosting packages to appeal to a target market. They are also able to put their company name and logo throughout the reseller site so that it is the reseller's "brand" that the customer becomes familiar with and recognize easily.
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