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.