Sometimes there are companies out there that offer to host and manage your site for you, but they don’t actually own their own servers. Instead, they rent servers from an established web hosting company and sell packages to you. This is known as reseller web hosting, and depending on your needs, it can be good or bad.
Just like every other commodity, web hosting can be resold. Many web hosting companies offer reseller plans for this specific purpose. In general, I don’t recommend end users going with reseller hosting unless the reseller is offering some additional, value added service that nobody else is offering.
When is Reseller Hosting Good?
Perhaps you’ve hired a web design firm, and they have a service where they manage your site for you. They already have the expertise needed to keep your site up and running, so they can take much of the pain out of working your site. The company also has a good understanding of how to get your content working quickly on the servers they rent, so there are fewer surprises when it comes to getting the site to actually run.
When is Reseller Hosting Bad?
Usually though, you should try to avoid reseller hosting. You are paying for a simple service with a middleman fee attached. Worse yet, you are one step removed from technical support. Avoid reseller hosting unless they are providing a service like website design or management. Because of the level of competition in web hosting, the margins are too small to offer a significant bulk discount. So reseller hosting will tend to be more expensive than traditional hosting.
Becoming a Reseller
On the other hand, becoming a reseller can be a great additional source of income. It allows you to make money as a web host, without the overhead of purchasing your own servers.
If you are interested, there are hundreds of companies that offer reselling plans. HostGator, for example, offers robust reseller hosting plans. Once the server is yours, you can either run the virtualization software of your choice or rent the entire server to a client. You can then manage everything from a control panel that you either get from your host or you install yourself.
Keep in mind that reseller hosting will always be more expensive than direct hosting. So it is typically very difficult to make a reseller hosting business work without providing additional value like design or management services.