Reseller Hosting and Whether You Want It

What it actually is

A reseller account is a hosting plan divided into separate accounts, which you allocate to clients and bill for yourself.

You buy capacity wholesale, sell it in pieces, and keep the difference.

For anybody building sites for other people it appears obvious: the clients need hosting, you are already doing the work, and the margin is recurring.

The reason to think about it carefully is not the economics, which are usually fine. It is what you are agreeing to be responsible for.

What you are taking on

• The first call when any client site is down.
• Being the support layer, not the host.
• Backups for other people's businesses.
• Certificates, renewals, and expiries.
• Somebody else's compromised site on your account.
• Billing, chasing, and cancellations.

The fifth is the one people underestimate. A compromised client site can affect the whole reseller account, which means one client's neglect becomes every client's outage.

The three in the morning question

The decision rests on this and not on the margin.

When a client's site goes down at an unsociable hour, they telephone you rather than a host, because you are their supplier and their invoice has your name on it.

If you are willing to answer that, and to have somebody available when you are not, then reselling is a reasonable business.

If your honest answer is that you would see it in the morning, then you are selling something you are not resourcing, and the first serious outage will damage a client relationship more than the hosting margin was worth.

That is a question about how you want to work rather than about hosting.

The economics are real but small

Worth sizing honestly before deciding.

A reseller plan divided among a modest number of client sites produces a margin per site that is meaningful in aggregate and small individually.

Ten sites at a modest monthly figure is real recurring revenue for a one-person business and is also less than one decent project.

Set against that: your time on support, the cost of any monitoring, and the occasional bad night.

The arithmetic works when the sites are simple and similar. It works poorly when one client has an unusual setup that consumes hours nobody billed for.

A worked example

A designer moved fourteen client sites onto a reseller account, and the margin covered a useful share of his monthly overheads.

For two years it was largely uneventful.

Then one client's site was compromised through an outdated plugin they had insisted on keeping, and the resulting activity got the whole reseller account suspended by the upstream host.

Fourteen sites were down for most of a day, including two shops, and he spent it explaining to thirteen businesses that the problem belonged to a fourteenth.

He kept reselling and changed two things: updates became mandatory rather than optional, and clients who declined were moved to their own separate accounts.

His assessment was that the margin had been fine and the shared fate had been the thing he had not priced.

Never hold their domain

The single rule worth adopting regardless of everything else.

Client domains should be registered in the client's name, on an account they control, with you given access rather than ownership.

That is better for them, obviously, and it is also better for you: it removes you from any dispute about who owns what, and it means a client leaving is a transfer rather than a negotiation.

The same applies to anything else where ownership matters: their analytics, their listing, and their advertising accounts.

Suppliers who hold client assets acquire a reputation for it, and the short-term retention it produces costs more in referrals than it gains in renewals.

Price it as a service, not a resale

The framing that makes this work commercially.

Competing on the raw price of hosting against a large provider is a losing position, since they are cheaper and always will be.

What you are actually selling is that somebody who knows their site handles the hosting, applies updates, takes backups, and answers when something breaks.

Price and describe it that way: a monthly care arrangement that includes hosting, rather than hosting with some help attached.

That also sets the expectation correctly, since a client who believes they are buying cheap hosting will resent the price and one who is buying peace of mind will not.

The alternative worth considering

Not reselling, and still being involved.

The client holds their own hosting account, in their name, billed to them, and you have access to work on it.

You lose the margin and the responsibility together, the client can leave without a transfer, and an outage is between them and their host.

Many established suppliers prefer this arrangement precisely because it keeps the relationship about the work rather than about infrastructure.

It also removes the shared-account risk entirely, since one client's problem cannot affect another's site.

Where you want recurring revenue, a maintenance arrangement produces it without the uptime liability.

Say what happens if you stop

The part of the arrangement worth writing down before it is needed.

Suppliers close, retire, and change direction, and a client whose hosting sits inside your account has no independent route to their own site.

Agree in advance what a transfer looks like: that they receive a full export of files and database on request, that you will assist with a move for a stated period, and that the domain is already theirs.

Put it in the same document as the price, in three sentences, and it removes the question that makes clients nervous about the arrangement.

It is also a genuine sales point, since most suppliers offering this cannot answer the question at all.

The counter-case

Reselling suits plenty of people and this should not read as a warning against it.

For a supplier who is technically confident, who standardises their builds, and who wants a predictable monthly base, it is a good business with genuine advantages: consistent environments, easier maintenance, and problems you can actually fix rather than escalate.

Clients frequently prefer it too, since one supplier and one invoice is simpler than being sold to by a hosting company.

The argument is only that it should be a decision about responsibility rather than about margin, and that the domain rule is not negotiable either way.

Deciding

1. Ask whether you will answer at three in the morning.
2. Arrange cover for when you cannot.
3. Register client domains in their names.
4. Make updates mandatory, in writing.
5. Separate anybody who declines.
6. Price it as care, not as hosting.
7. Consider not reselling and charging for maintenance instead.

Step three costs nothing and prevents the situation that damages these relationships most reliably.

What an ongoing arrangement should specify is covered in what a retainer should include.

Frequently asked questions

West Coast Media Solutions Inc. provides web design, web development, hosting, digital marketing, and business consulting to organisations across Canada, drawing on more than twenty-five years in the field.