Simply put, reselling is a way to make money, both in case of provider supplying original service, and independent operator doing reselling. It is a relationship between a service provider, and a special kind of customer.
In a reselling relationship, reseller is not an employee of service provider, but instead acts as an extension of larger company's marketing, sales and support operations. The reseller markets product independently, and signs up customers to original provider's service, often providing simple side of service, like offering basic tech support and administration of account.
On service provider's side of deal, a reselling program allows a business to expand its customer base without overextending its marketing and sales operations. From reseller's side, a reselling program allows a small, independent operator to profit from a small piece of Internet services market without requiring a lot of technical knowledge, or a big investment in infrastructure.
THE FIRST STEP
The first step in a successful reselling venture is defining what type of product/service you want to resell. A big mistake most new resellers make is cramming lots of different products and services into a website.
Start small, start with 2-3 related products that you can resell and support with ease, then expand into a broader range of products and services as your client base grows. If you have experience in a field, choose a product that flatters your knowledge, create a niche market, and then expand.
HOW TO SPOT A GOOD RESELLER PROGRAM
An excellent higher-tier Web host truly values its relationships with resellers. Through such relationships, a company enhances market reach of its product and services offerings through reseller's specific market segments.
A higher-tier company will thus offer a myriad of specifically tailored services to enhance reseller's service offering. By providing a wide range of options, a reseller's business can scale along with its customer base.
The options, or resale models most usually made available to resellers include "volume discount" reselling, discount per domain, affiliate and private label reselling.
VOLUME DISCOUNT MODEL
The volume discount approach provides increased revenue per domain as reseller increases number of accounts within their hosting portfolio. This model is extremely cost-effective for larger resellers, since cost per account declines as volume of accounts increases.
The major disadvantages of this model however are that resellers are usually directly identified as resellers, since infrastructure and brand identity throughout entire Web hosting service is usually identified with higher-tier hosting provider.
The model also is not very advantageous to newer and smaller reseller operations which have just started-up, since reselling under this model is much more expensive if reseller's customer base is small.
DISCOUNT PER DOMAIN MODEL
The more advantageous reselling model for start-up reseller operation is therefore discount per domain model. Under this approach, higher-tier Web hosting firms offer discounts to reseller per account purchase.