Reseller Web Hosting is the practice of reselling web hosting space to sub-clients. As a Reseller, you purchase large blocks of disk space, bandwidth, and server resources and then divide it up into individual packages to resell to other clients for a recurring fee (i.e. monthly, quarterly, annually, etc.).
The average small business just looking to get a simple WordPress website online with their name, address, and basic contact info takes up an average of 500 MB of disk space and around the same amount in bandwidth tops. Because of this, they only expect to pay a couple dollars a month in web hosting.
As a Reseller, you're able to purchase these larger blocks of disk space and bandwidth starting at around $20 a month. Therefore it only takes about five or so clients at $5 a month to cover your expenses.
With returns this large, it doesn't take long to start developing a very profitable business. Consider this example:
Reseller Package - 50GB Disk Space - 500Gb Bandwidth (Monthly) - $19.95/month
5 customers [email protected] 500MB Disk Space [each] - 500MB Bandwidth [each] - $5.95/month = $29.75 Revenue
Resources used: 2.5GB Disk Space - 2.5GB Bandwidth = 47.5GB Disk Space - 497.5GB Bandwidth [left over]
$29.95/mo [Revenue] - $19.95/mo [Expense] = $10/mo [Profit] 50.14% [ROI]
While $10/month in profit doesn't seem glamorous, the ROI is incredible. It then becomes a numbers game to scale the business upward.
The majority of Resellers tailor their services to certain niches where they offer the hosting in addition to their primary revenue stream. For example, a design agency may charge a client $800 - $2,000 to develop a website with a monthly maintenance fee of $25 - 50. Included in this fee would be their web hosting, monthly updates, email management, etc.
Since web hosting is the "water" of the Internet - it becomes a very valuable commodity needed by even the simplest of websites.
If you already have a customer-base it's a very easy add-on since you already have their trust. If you don't have a customer-base, your only limited by your imagination to the type of clients you can target.
Have you ever considered selling web hosting?