Overselling

[maritimer]

I`m tempted to go with a Hostgator reseller packages, however the overselling issue is holding me back.

Now appreciate the reasons for them not allowing overselling in WHM, that`s not what I`m questioning.

I am wondering from the seasoned HG resellers, how do you manage to offer attractive hosting packages with such a limitation?

I`ve seen resellers offering 30, 40 or even 60 gb traffic, but with overselling disabled it doesn`t take many of these whm packages before you hit the quota limit.

[slapshotw]

It's impossible to compete with even HostGator themselves on resources alone with a reseller plan (though possible with a dedicated server). Many people here offer value-added services; tech support, some kind of design or coding, IT consulting, backups, that kind of thing.

[Sam]

Originally Posted by maritimer

I am wondering from the seasoned HG resellers, how do you manage to offer attractive hosting packages with such a limitation?

Well if there like me then they go dedicated like i did last week

[gtgeorge]

And with their current offer you would have some time to get it going generating income before all the bills come rolling in

[Serra]

Originally Posted by maritimer

I`ve seen resellers offering 30, 40 or even 60 gb traffic, but with overselling disabled it doesn`t take many of these whm packages before you hit the quota limit.

Reselling, as done through Hostgator's reseller hosting, are not offering packages like that. Its simply impossible. Just remember that users don't normally use that much bandwidth, so selling them something smaller is very easy.

[ldearing]

value-add is the only way to compete. all of my clients hosted through HG are fully managed my me. They have no cpanel access, and they know they have "enough" disk space and bandwidth. we are not going to attract the buyers that want 200gig for 9.99 month.

[Serra]

Originally Posted by ldearing

value-add is the only way to compete. all of my clients hosted through HG are fully managed my me. They have no cpanel access, and they know they have "enough" disk space and bandwidth. we are not going to attract the buyers that want 200gig for 9.99 month.

Value added is not the ONLY way to compete in reselling. The alternative is affiliate reselling where your customers use packages from the hosting company and you get a cut. Several hosting companies have very attractive plans like this.

Affiliate reselling is only profitable if the affiliate agreement pays a small residual instead of a large payout. HG's affiliate plan currently pays a lump sum, this is not overall profitable because you need to keep generating new business to stay in business. Affiliate plans where the host pays $1-3 per month, per account is far more profitable in the long run. This also allows better value added reselling because you stay in touch with customers as they provide residual income, as opposed to HG's plan where value adding gets you nothing.

[Goddess Dix]

Originally Posted by maritimer

I am wondering from the seasoned HG resellers, how do you manage to offer attractive hosting packages with such a limitation?

well, i might not be the best person to respond, since i haven't actively been marketing hosting and am only moving to that now that i have a dedicated server. it's a process. but i have had a web design business for several years and have enjoyed a high degree of loyalty from my clients. and that's how i got into the hosting biz to begin with.

NONE of my services are ever sold on price. if that's what they want, they can go to godaddy and get three billion meg of storage for $3.95 or whatever the current thing is. i don't want to be the cheapest around, and based on my experience with clients, the less they pay, the more they expect, pretty much without exception. while it makes no sense, there it is.

it's always essentially been "me" i'm selling, in the sense of value-added services. when they have a problem with their services or site, then i consider it my problem until it's figured out. they've stayed with me through many ugly hosting issues and server moves, before i got to hg, including unacceptable downtimes, email blacklisting every other day, overloaded servers and every other headache in the book from substandard hosts. this is because i communicate with them, i apoloigze for problems, and i look for ways to fix the problems.

my whole thing for all my business services is that i will NOT be the cheapest, and if price is your main consideration, i'm not a good fit. i'm not willing to compromise on the service i offer by undercharging for it. however, i do make every effort for my clients to feel like they get good value for the money they spend. and that has worked very well for me. i've found most people don't mind paying a little more for solid customer service. and the ones that don't? they can go somewhere else.

your milage may vary.

[ldearing]

Originally Posted by Goddess Dix

...my whole thing for all my business services is that i will NOT be the cheapest, and if price is your main consideration, i'm not a good fit...

exactly... there is an old sales saying.... something about "its better to apologize once for price than time and time again for quality and service"

Originally Posted by Serra

... The alternative is affiliate reselling where your customers use packages from the hosting company and you get a cut... only profitable if the affiliate agreement pays a small residual instead of a large payout [like HG]... where the host pays $1-3 per month, per account is far more profitable in the long run.

yes, that is a totally different model to the HG model. value add is the only way to make it with this (HG model. now the model referrenced here is sort of a pay as you go model where you "buy" a wholesale account and resell that account for more money. as many here know i use this model with a godaddy reseller account to augment my offerings here at HG.

Serra is right (as usual ) ... affiliate payouts like HG's are generous, but they are one time. profitable hosting must be residual in nature. at HG, you must offer a value add to be profitable. with the GD model, you have a small profit margin, but don't really have to offer value add. if you do... you are even ahead of the game.

[kmaw]

Yes... value added...

90% of my clients are going to use me anyways, they're not shopping around for $3 domain names... that's why they pay me $25... but I also don't abuse that relationship either...

[Serra]

Originally Posted by kmaw

Yes... value added...

90% of my clients are going to use me anyways, they're not shopping around for $3 domain names... that's why they pay me $25... but I also don't abuse that relationship either...

I only charge $12.00 for domain names. For me, this is so that I'm just expensive enough that they will allow me to control their domains and not think about moving. This allows me to make changes to their nameservers as needed.

[Goddess Dix]

Originally Posted by ldearing

exactly... there is an old sales saying.... something about "its better to apologize once for price than time and time again for quality and service"

Well, I don't exactly apologize for my prices. They're within a reasonable range for the industry, but never rock-bottom, no. The services I offer are far from rock-bottom, so the prices won't be, either.

My little rule of thumb is that if nobody ever complains about price, it's too low. If most people do, it's too high. Simple, but it works for me.

[charlesgan]

Originally Posted by maritimer

I`m tempted to go with a Hostgator reseller packages, however the overselling issue is holding me back.

Now appreciate the reasons for them not allowing overselling in WHM, that`s not what I`m questioning.

I am wondering from the seasoned HG resellers, how do you manage to offer attractive hosting packages with such a limitation?

I`ve seen resellers offering 30, 40 or even 60 gb traffic, but with overselling disabled it doesn`t take many of these whm packages before you hit the quota limit.

overselling is biggest concern for small reseller.
when you grow bigger, you definately need to look at having your own dedicated server and run your own hosting biz.