If you are thinking of joining the reseller hosting business or have already been in the business after purchasing web hosting reseller plans, and feel like there is no growth, chances are that you may have contemplated quitting or moving to another business to earn more. This is natural and there are many reasons why any enterprising person in the field of web hosting would think of quitting as a reseller. One of the reasons is that there are too many resellers now and the space is getting saturated since it becomes difficult for people who have started their business as a reseller to stand out. And that is either because they don’t know how to stand out or because they don’t have enough knowledge, resources, or people to sustain the business.
Like most businesses, the reseller hosting business too needs you to be passionate, consistent, and focused on profits and return on investment. However, if the key components that drive the business are not in place, then chances are that you may struggle to find a firm footing for sustainability.
With this article, we seek to focus on the reasons enterprising people and web hosting enthusiasts quit the reseller web hosting business. We will also talk about what can be done before you make the final call so that you can give your business a chance to recover and do well as a reseller.
1. Reducing profitability
Some resellers think that there aren’t many profit margins in the reseller hosting business. To some extent, there is truth to this, which is why choosing the right provider for reseller web hosting makes a lot of sense. Another reason for stagnant margins and profits is the mass acquisition of customers without understanding the customer in the first place and going into the market without a reseller hosting business plan. This leads to acquiring customers that end up buying services and hosting they don’t need at the price they can’t afford or they can’t repurchase hosting from you. Hence, acquiring as many customers as possible is not the right method going ahead.
What can be done to make amends is to focus on customer needs and choose the right channels for these customers to acquire them and maintain a lifetime value of these customers. This can help you save acquisition costs and maintain your current customers to keep them satisfied.
2. Costly infrastructure
Like we said earlier, if the choice of the hosting brand is not right for you in terms of pricing and infrastructure, chances are that it will hurt your business. Hosting infrastructure is costly and it takes investments and upkeep to maintain the performance. Most importantly, the uptime of the servers is very important because as a reseller, your client’s survival depends on that. Many resellers face a downtime issue which leads to their customers getting the short end of the stick.
The best way to counter this is to ensure that the hosting provider you choose should have some basic plan in place for the kind of infrastructure they provide that can be resold by you at a margin and that ideally has a price that can be affordable. Buying from a brand that only has a name in the market but takes a chip off your margin only to add to costs should be totally avoided.
3. Unable to offer 24/7 support
Most web hosting providers claim to offer 24/7 support but fall short during crucial stages. A web hosting business is a business where the support has to be available 24/7 because of its technical nature. Any kind of a problem can come up at any point in time. So, if a provider fails to do so, chances are that your customers are gonna bid farewell to you. Not just that but they will let other customers know this on review sites, forums, etc., and create a problem for your brand.
If you need to tackle this kind of problem, then the best way out is to select a provider based on reputation. A good and reputed brand known for customer support never fails to deliver and most of all understand that it’s not just reputation but also their reseller’s reputation on the line when they fail to provide timely support. Hence, better to find a provider that understands your needs and demands and puts them ahead, and considers them important.
4. Not having enough technical knowledge
If you’re looking to resell web hosting, you’ll need to be familiar with the web hosting industry and how it works – or you’ll need someone with some technical knowledge. This is a must as it is your business and having a fair idea of trends, and technical know-how is least expected. However, many resellers turn a deaf ear to these basics and feel that changing some components on the website or totally depending on the hosting provider will be enough. Unfortunately, that is a misconception.
Failure to understand websites and their web hosting requirements can create unnecessary conflicts with your customers. Assessing the needs of your customers will help you retain them and even those whose businesses need adjustments. These positive experiences and habits will definitely make your services stand out in the web hosting reseller business markets. Moreover, someone who stands out with technical expertise is bound to understand customer grievances better and work jointly with the hosting provider to resolve customer problems quickly.
5. Team building and overall management
It is very hard getting a team and building one at a low cost. Especially when it comes to specialists who can market the products and services that you are reselling. Getting people on board and then keeping them happy knowing that it is an uphill task could be a problem for many when there are so many players in the market. This is also one of the major reasons people quit the web hosting and reseller hosting business. Also, getting talent at lower costs is not the right way to go. At some point, they will leave for a better opportunity or quit citing other reasons.
One of the ways of countering this is to keep goals when it comes to operational costs, marketing budgets, and customer acquisition. Your funnel of customer acquisition, retention and sends will tell you how much time and effort you will need and what you can do about adding people to your team if need be. But most importantly, put pen to paper and start the work by setting goals.
Bad promo tactics, or even choosing the wrong marketing channels can cost you dear in this business. Another reason could be a lack of understanding of marketing channels and how digital marketing works because most of the decisions are taken through digital research. If one can focus on these aspects, the chances of quitting the website hosting reseller business can decrease drastically.
On the whole, there is no easy way out if you choose to become a reseller. It is like any business worth its salt which requires full-time dedication, commitment, and moreover an understanding and interest in the field of web hosting. A decent way to keep this going is to learn about different products and help your hosting provider to make them better so create a good relationship with your provider. Hosting providers value feedback from reseller hosting providers and take their inputs seriously.
With this, we come to the end of this article. It looks like we have covered all the factors behind resellers quitting the web hosting business. If you think there are more such reasons, please feel free to share them with us and help us understand more if possible. Till then, take care, and keep reading!
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