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Reseller vs. Regular Hosting Services: Case Study

This is a guest post by David Murton

server-rackShared Hosting has revolutionized the Internet by enabling many small- and mid-sized businesses to acquire websites with plenty of disk space, bandwidth, e-mail boxes and IT maintenance support. Online businesses don't need to make large initial investments in hardware, software and IT personnel when they outsource their Website Hosting to third-parties. Besides Conventional Shared Hosting Services, the market also offers Reseller Hosting and Virtual Private Server (VPS) Hosting options to website owners. These are a step up from Regular Shared Hosting but not quite as advanced as Dedicated Hosting.

1. Understanding The Basics

What is Reseller Hosting?

The Reseller Guide is a great resource for information concerning Reseller Hosting. It describes Reseller Hosting as involving a large Web Hosting company selling a large hosting account to a smaller firm. This smaller firm divides the account into smaller portions to later resell them to its own clients.

Are the Best Features of Conventional Shared Hosting Retained With Reseller Hosting?

Conventional Shared Hosting provides great advantages of cost-effectiveness, ample resources and professional IT maintenance staff. All of these features are retained with Reseller Hosting. Under Shared Hosting contracts, the business has a limited access to the server through a control panel. With Reseller Hosting, there is a higher level of access granted through the control panel.

Why Do Businesses Turn to Reseller Hosting?

As businesses grow they place a greater burden on Shared Hosting resources. They might purchase upgraded plans or multiple websites. Eventually, they realize that Reseller Hosting offers more resources, control and the potential for supplemental income at a lower cost (when purchasing multiple accounts) than Shared Hosting.

Reseller Hosting is a natural migration for growing businesses. It provides larger amounts of disk space, bandwidth, e-mail and database services. Domain name customization is easier with Reseller Hosting.

2. How Does Reseller Hosting Compare to VPS Hosting?

Reseller Hosting Advantages

Reseller Hosting is a step up from Shared Hosting; when multiple accounts are purchased or supplemental income is factored in, then Reseller Hosting could be more cost-effective than Shared Hosting. The control panel is standard for Reseller Hosting as opposed to VPS Hosting. VPS Hosting requires a higher level of Web administrator expertise than Reseller Hosting. Scalability is a key benefit for both Reseller Hosting and VPS Hosting.

Why shouldn't a business simply go to the highest level possible - Dedicated Hosting?

In the ideal world, all businesses would have their own dedicated servers devoted solely to their websites. Unfortunately, dedicated servers are very expensive and only large corporations have the financial resources to afford this option. While it is the most secure option, it also requires hiring a large IT staff.

VPS Hosting is in-between Reseller Hosting and Dedicated Hosting in terms of resources, control, cost and isolation. VPS hosting requires more experienced professionals who can write their own coding script because the control panel is not standard.

VPS Hosting Benefits

According to Varun Pandula, VPS Hosting has the key benefit of having its own operating systems, which can be configured for specialized purposes. The isolated environment and ability to create firewalls provide a higher level of security. Varun Pandula believes that if Web developers are purchasing multiple websites, then VPS is more cost-efficient per unit.

VPS owners can better manage data, bandwidth and disk space resources because they are granted more access to a private Web server. Experienced system administrators must manage "Guaranteed RAM" and "Burstable RAM."

When is VPS Hosting the Best Option?

VPS Hosting is best for websites that require powerful resources, specialized features and higher levels of security. A website running videos requires large amounts of storage and fast data transfer speeds. Some niche forum or blog sites could benefit from the greater freedom with program installation. According to Web Hosting Top, VPS is great for e-commerce websites needing powerful resources for security, financial information checks, product catalogs and shopping carts.

3. When is Reseller Hosting the Best Option?

The Reseller Hosting Plan is best for business entrepreneurs who have their own websites, but want to enter the Web hosting business. Scalability is a key benefit of Reseller Hosting as extra disk space and bandwidth can be used to improve websites.

Reseller Hosting Branding

Individuals or firms can create, manage and promote their own Web Hosting brand through reselling. There is the potential for supplementary income by reselling Web hosting packages. A reseller is like a landlord who lives on his property. He enjoys his property while receiving extra income.

Surplus resources can be resold to clients or held in reserve for scalability. Resource re-allocation is enabled with Reselling Hosting. Reseller Hosting is also good for those who want to consolidate website domains located around the world.

Techie Park suggests that Reseller Hosting Services are the best option for Web Design companies that run their own growing websites and sell excess capacity to clients. It concludes - "... if you manage to sell enough web hosting space, the money you can make from this could be substantial."

Selecting a Good Reseller Host

*Caveat Emptor - Buyer Beware!*

Many firms might offer "unlimited bandwidth, disk space or e-mail boxes." Beware because in the economic market, "unlimited" does not mean "unlimited."

Web Hosting is a service industry, like airline travel, hotels and cell phone service. As such, it has difficulty in properly calculating what percentage of its resources will be used at any moment. Thus, it "oversells" its services by offering "unlimited" features because it figures that not everyone will max-out their resource allocation.

While initially the promise of "unlimited" might be acceptable, be prepared to "pay" for mandatory plan upgrades if your usage spikes. There is no unlimited resource allocation in reality. Eventually, a new reseller will attract more customers who will use up the extra resources.

Keep this in the back of your mind when selecting a Reseller Host. Look for a Reseller Hosting Company with a good reputation, features, price and customer service that match your business model.

David Murton has been helping companies build and maintain their online relationships with customers since 2006. He is also a professional writer and blogger, with a particular interest in the open source Drupal platform.


  1. I wish all managerial personnel would understand the points put forward in this article. What happens in reality is that often e-commerce businesses will not buy that VPN hosting because someone doesn't understand why they need to pay more money. So they downgrade. After that they either start losing customers because their site isn't fast enough or go into some major problem like their security being breached by hackers. Wouldn't it be nice if companies would stop being reactive and start being proactive when it comes to technology?


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