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Most start-up resellers first elect to purchase this type of service because) it is hosting option with least expensive cost of entry and ii) option provides substantial savings as reseller's customer base grows.
The most advantageous discounts offered usually range from 15 to 30 per cent of original account's price. With reseller able to set retail price for its consumers, profitability can accrue very quickly via this resale model.
The other popular resale option is affiliate reselling. Under this model, resellers are offered a simple, uncomplicated payment structure that pays commissions on all referrals for Web hosting services and hosting accounts that recur monthly.
This option is extremely popular with smaller Web designers, developers and system integrators, since it allows them to collect an up front fee for placing their client's hosting services at a particular higher-tier Web hosting firm.
By utilizing this option, system integrators need not spend thousands of dollars to offer their clients hosting infrastructure that is constructed in-house. In wide contrast, integrators can collect a fee while relocating rather involved responsibility of hosting onto a firm that makes hosting its core competency.
While this resale approach will satisfy most small system integrators, it would not likely satisfy a value-added reseller (VAR).
VALUE ADDED RESELLER OR PRIVATE LABEL RESELLER MODEL
A VAR is a vertical, market-centric, solution provider who integrates specific products into its own offering as part of a complete customer solution. Because VARs are focused upon providing transparent and integrated products and services, they usually select private label hosting solutions.
Private label hosting allows resellers to utilize services of an outsourced, higher-tier service provider while reaping benefits of a fully customized look and feel. Private label solutions are considered most complex since most offer a high level of customization and automation.
For this reason, private label solutions have most expensive cost of entry, and are used by largest of resellers, who posses hundreds and even thousands of accounts.
LEARN, LEARN, PROSPER
An excellent reseller will take time to learn everything about product/service he/she is selling, this is a crucial component to your success as a reseller, if you don't know how your product's features can benefit your customers, how will convey that message to them?
You must step into mind of Company you are reselling for, involve yourself in their culture by thoroughly reading all their manuals, subscribing to their forums, ezines, and updates. Look for communities built around product and interact with other resellers and users to learn strong points and weaknesses of your product so you may be better prepared to answer pre-sales and support questions.
Reselling programs can be a low risk way to start your online business, picking correct reseller program(s) is as important as any aspect of your business plan. Follow above guidelines and you increase your chances of finding and implementing a successful reseller program.
About The Author Alessandro DeBarros is a web marketing specialist for BrandBlast http://brandblast.com , a CT based firm whose cutting edge hosting services is quickly being recognized around the world as a leader in its field. At a current base of 5,000 clients, BrandBlast specializes in small to medium business hosting, providing small businesses with the services and support they need at affordable prices.