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How To Make Money with Web Hosting: A Guide

May 16th, 2007 by shawn · 6 Comments

There are a lot of ways to make money online, but none is as central to the web itself as webhosting. Everyone with a website or blog needs to host it somewhere – so why not provide them the service?

Becoming a web host is easier now than it ever has been; this is partially due to the availability of technology and knowledge, but it’s also due to the fact that reseller accounts are accessible to just about anyone who wishes to try their hand at webhosting.

Looking for ways to get money now? Have you ever heard of a payday loan? Investigate these and other cash advances to help you cover your mortgage loans or even your credit card debt when in desperate need.

Are you interested in making money as a webhost? Read this web hosting business guide to find out how.

1. Define your niche, services, and guarantees. This includes who you are targeting, what product(s) you will offer, and what you’ll promise to your customers.

  • Sell a particular type of hosting. While there isn’t necessarily anything special about the servers you host on, you can always target a particular niche and say you specialize in something. WordPress hosting is something that’s been done to death, but every time a new CMS or blogging platform comes out, that’s a whole new market to specialize in.
  • Resell domain name registration. There are a few services to choose from that will allow you to make money when people register domain names from your website. eNom is probably one of the most popular, but RegisterFly is another one you might consider. RegisterFly has an affiliate program as well – in case you don want the expense of becoming an actual reseller.
  • Tell customers where you stand. You need to have a policy on uptime, data loss, and any other potential events that would cause trouble for your customers. If your policy is that you don’t provide any backups, say so. If you backup all your customers’ data nightly but charge $10 for restoring data – say so. And don’t promise 99.999% uptime if you can’t deliver it.

2. Set your Pricing. The trick is to make money, but be competitive at the same time. At minimum, you need to pay for your hosting package – so start there. (Find out how much you are paying per GB of storage/bandwidth by dividing it up. Determine the package levels you wish to sell, and price them based on your costs + x-amount of profit.) Remember, hosting is cheap these days. So you’re gonna need to offer something exceptional/better/sexier/more reliable than a bunch of other hosting companies out there. People shop for hosting based on the following: features, reputation, and price. (You can only give them two out of all three in their favor.)

3. Create your brand. This means you need to create an identity: your name, logo, color scheme, and domain name. A lot of this is hard to nail down (like what you color scheme looks best) and some is easy (like the fact that no one will ever purchase hosting from a company with .biz domain name).

4. Organize your backend. This means billing processes, email addresses, a trouble ticketing system, the payment method(s) you accept, and all that. If you sign up more than a handful of customers you will need a hosting automation system like WHM AutoPilot, lPanel, or ModernBill. WHM-AP is free with HostGator, and there may be other hosting companies that can set you up with software like this. (If you buy any of these on your own you will pay at least $200+. If you’re just starting out, keep track of your customers with an Excel spreadsheet.)

5. Line up your support system. Customers will need to get tech support at some point. If you’re gonna be the tech support guy, have set hours posted on your site and stick to them. If you want another company to provide tech support, you can do that too. If you choose to hire someone to do it, have phone #’s and emails listed when/where you might need them.

6. Design and program your website. If everything up to this point is lined up then it’s time to put it all together, and make your website. Give yourself some time to get it looking good and working correctly. Make sure to test out all the features, especially if you’ve integrated WHM-AP and domain reselling. Only after it WORKS do you go live. Before you’re tested and tested again, don’t tell a soul about your site.

My personal philosophy is that the one-man hosting company needs to be a jack-of-all-trades, and I think website design fits in here. You don’t have to be a particularly apt designer with all the options available today (i.e. Joomla, Drupal, WordPress, etc.) but you should know a few things about a few things. Which things? CSS, HTML, PHP, servers in general, file permissions in general, and stuff like that. Am I saying you need to be an expert? No way. But you need to be able to learn about stuff like this when it comes up.

7. Advertise. Banners, text links, forum postings, ads on blogs, and any other method you can think of will be critically important. One thing to consider is making your own affiliate program and paying other people to bring you business. Whatever you do, you have to do it consistently in order to get paying customers. (There are a lot of cheap advertising options out there including the $100 in free links promotion from Text Link Ads.)

8. Enjoy the income.

There’s not a lot of complication to becoming a webhost, and if you have a little web know-how and some patience to prepare your business before launch, you can do it right. Since setup is actually pretty cheap compared to the potential earnings selling hosting, this can be quite a lucrative business.

If you already have a complimentary business such as web design, SEO consulting, or network setup, you can always add hosting to what you offer and have an additional revenue stream. Getting a reseller account is simple, but the possibilities of this business are endless!

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    Tags: Business How-To's · Ecommerce · Running a Business

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    Comment by Court
    2007-05-16 18:03:19

    This really is a good way to make money online. It’s actually one of the major streams of income for my site! Thanks for the visit, and I will add you to the D-List!

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    Comment by i.nconspicuo.us
    2007-05-16 23:59:17

    Making money with host is easy as you state, however in most cases, you’ll be taking on a lot of risk – data loss, etc. Nothing worse than upset customers!

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    Comment by Dave
    2007-05-17 15:19:26

    I really like the reseller idea. Domain names and new hosting packages are a constant thing for me. I am always buying more. I might sign up for a reseller account soon.


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    Comment by shawn
    2007-05-17 15:41:55

    @ i.nconspuo.us
    Certainly you don’t want upset customers, and I understand what you’re saying…but what business DOESN’T have at least some risk? Besides when you’re a reseller the server is largely managed by the company you rent the server from.

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    Comment by shawn
    2007-05-17 15:45:26

    @ Dave
    Reselling makes a whole lot of sense especially if you constantly need to set up hosting (whether for yourself or other people). I really like HostGator’s packages by the way – yes they are a bit more expensive some some of the cheapo companies out there but they’re worth it…

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    Comment by Allen GC
    2009-03-25 04:08:19

    Hi team,

    not quite understand about the reseller program:

    if you purchase Hostgators resell package (ex. the basic one you pay 24.95 you will get about 24 GB disk space, 250GB bandwidth) are you selling this 24 GB disk space or what are you selling?

    compare to Hostgators webhosing package they sell the Linux Web hosting packages with Unlimited disk space and unlimited bandwith and unlimted domains allowed for 12.95 a month with 1 cpanel

    I am new and willing to jump into this field can you help to give me some tips?

    Allen GC


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