WEB HOSTINGModule 10: Selling Web Hosting

INTRODUCTIONPassive income refers to money you earn from services that do not require you to actively do anything. Reselling hosting to other clients is referred to as passive income because once the site is launched you do not generally have to do anything extra.

When you purchase a hosting account and resell this service to clients for an additional sum, you can end up earning quite good recurring, passive income on a monthly or annual basis.

Participating in an affiliate program with a hosting company can also help you earn passive income without needing to setup or manage hosting directly for clients.

MODULE OBJECTIVESUpon completion of this module, you should be able to:

• Define passive income• Recognize the importance of

choosing an audience• List the main features of WHM &

WHMCS• Apply your knowledge to set up a

web hosting project

PASSIVE INCOME

There are several different ways you can start your own web hosting business, but they all begin with one thing: the server. Think of the server as a mega hard drive that’s going to store and file away all the websites you support (and collect money from each month).

If you’d rather start small and work your way up to actual server ownership, you can rent your server from website hosting companies including HostGator and GoDaddy. This is much cheaper than buying a server outright and also takes care of the storage question.

PASSIVE INCOME

There are two server renting options, namely getting a reseller or dedicated server. With a reseller account, the management team at the “landlord” hosting company takes care of your server, including software and control panel installation and regular backups. This is a good option if you don’t have a lot of money to spend and/or feel a bit overwhelmed by all the possible issues that a server might encounter. Most hosting companies allow you to upgrade to a dedicated server from a reseller account at any time.

Web hosting does cost some money to start, but if you like working with technology and computers, it is a great way to make a passive income. Also, if you own any websites of your own (and you should, at least least for your web hosting business), having access to your own server means free hosting for you.

It’s doubtful that, as a small-time web host, you’ll win on price. So, consider what other advantages you might offer your clients. Perhaps your server has a killer processor (e.g., Xeon) that offers load speeds

far superior to those noted on the shared servers at X hosting company. Or maybe you can offer round-the-clock technical support

because your IT person lives halfway around the globe.Local advertising might work to your advantage if you live in a smaller town and local business owners are already aware of you. You could go

door-to-door and offer your hosting services- and better yet, upsell domain names and website creation if that business is not even

online.

CHOOSING YOUR AUDIENCE

Let’s see..PAYING ATTENTION?

Select one of the options. Then move on to the next slide to check your answer.

True or False:You can obtain passive income fast and without an initial investment.

TrueFalse

Let’s see..PAYING ATTENTION?

Select one of the options. Then move on to the next slide to check your answer.

True or False:You can obtain passive income fast and without an initial investment.

TrueFalse

Web hosting does cost some money to start and the incomes

may be low at the beginning

PRICING

Set customer pricing can be tricky. You are competing with companies who offer $1.00 pricing online and others who can charge hundreds of dollars. Research pricing and then break down your resources. Divide up server cost, operational costs and other factors. Websites needing secure certificates for e-commerce will be charged a higher rate as will companies demanding more space and bandwidth.

EXAMPLEIf your target is to generate monthly profit of $1,000 then it's essential that you generate sales of at least $5,000, assuming a healthy 20% profit margin. Note that it’s totally up to you to decide the profit margin, but It’s highly recommend 15-20% profit margins, because anything over 20% margin will make your hosting packages way too costly, and this may turn off many of your potential customers.

On the other hand, if you decide to work with 5% profit margin, then you’ll have to resell hosting packages worth $20,000 to generate monthly profits of $1,000, and it probably won’t be worth your time and effort.

Let’s see..PAYING ATTENTION?

Select one or more of the options. Then move on to the next slide to check your answer.

It’s totally up to you to decide the profit margin

It’s highly recommend 5-10% profit

Websites needing secure certificates for e-commerce will be charged a higher rate

Which of the following statements are true about pricing?

Let’s see..PAYING ATTENTION?

Select one or more of the options. Then move on to the next slide to check your answer.

It’s totally up to you to decide the profit margin

It’s highly recommend 5-10% profit

Websites needing secure certificates for e-commerce will be charged a higher rate

Which of the following statements are true about pricing?

A 5-10% profit it’s very low and probably won’t worth the effort.

LEGAL CONSIDERATIONS

Before you start, make sure to create and post a Terms of Service statement and an Acceptable Usage policy; customized documents can be created through sites like HostLegal.net.

Keep in mind that most countries do not allow persons under the age of 18 to enter into legal contracts. This is also good to know if you yourself are under 18 and thinking of starting a web hosting business.

You may still contact (and maybe even retain) an attorney prior to accepting any paying clients. Remember that hosted websites, especially if they are business-related, will incur monetary losses anytime your server crashes due to some issue at the landlord hosting company, a wet basement, etc. Your clients could sue you for those monetary losses unless you have some kind of legal knowledge and documents in place to protect you.

WHM & WHMCS

Web Host Manager, or WHM, is a powerful program that allows administrative access to the back end of cPanel. WHM gives you a lot more control and flexibility when managing either a few very popular and resource intensive sites, or large number of sites. On top of giving you the ability to sell hosting services to other people, WHM also gives you the option to create and manage multiple cPanels. There are lots of really good reasons, if you have business oriented or popular sites, to place them on separate cPanels.

WHAT IS WHM?

WHM & WHMCS

WHM gives you a suite of tools to easily do the following things:

• Create, delete, and suspend your cPanel accounts.• Manage and monitor your sites (password resets).• Access to check and change all of your domains' DNS zones.• The ability to configure your own customers' support requests

through cPanel.• Permission to check the server information and status.• Ability to create your own default page when you create a new

account.• Access to customize your hosting and control panel with extensive

branding.• Ability to change your client domain names and user names.• Hop between every cPanel on your account and access/change

anything that does not require SQL access.

WHAT WHM DOES

WHM & WHMCS

WHMCS is an all-in-one client management, billing & support solution for online businesses. Handling everything from signup to termination, WHMCS is a powerful automation & support tool.

There is a fully functional online demo that you can use to quickly and easily try WHMCS @ www.whmcs.com/demo. Be aware however that users can make changes to the demo at the same time as you are logged in, which can lead to oddities occurring.

WHMCS is available as either a leased product that you pay for each month, or owned where you pay a one off fee with optional yearly support & updates renewals. Prices start from $15.95/month.

WHAT IS WHMCS?

WHM & WHMCS

WHMCS is a very powerful billing solution, offering features and functionality that should cover most needs. • Billing Functionality• Many Integrated Payment Gateways• Automatic Setup & Management• Domain Management• Integrated Support Tools• Reporting & Statistics

FEATURES OF WHMCS

Let’s see..PAYING ATTENTION?

Select one of the options. Then move on to the next slide to check your answer.

True or False:WHM allows you to automatize billing and domain management.

TrueFalse

Let’s see..PAYING ATTENTION?

Select one of the options. Then move on to the next slide to check your answer.

True or False:WHM allows you to automatize billing and domain management.

TrueFalse

False! WHMCS allows you to automatize billing and domain management.

PRACTICE TASK

Take some time to research and complete this task.

1. Write out a plan for what types of web hosting you may be able to offer and to who

2. Look at how 10 different hosting companies approach their terms of service

ASSESMENT

Fill out this 1 Page Business Plan for how you go about offering web hosting to others http://100startup.com/resources/business-plan.pdf

CONGRATULATIONS!You should now be able to:

• Define passive income• Recognize the importance of

choosing an audience• List the main features of WHM &

WHMCS• Apply your knowledge to set up a

web hosting project