There was a thread about reselling domains and hosting on Website Babble.
In that thread I explained that I earn roughly 30% per sale as a reseller with my store Website Palace.
That doesn’t sound like a lot of money if you consider web hosting and domains are pretty cheap, right? So a $10 hosting package is only going to earn about $3.
Someone asked why resell when I could earn much healthier commissions as a hosting affiliate.
While it is true, hosting affiliate programs can be very generous (I’ve seen commissions as high as $150 per sale.) However, the benefits to reselling outweigh regular hosting affiliate programs by far, and here’s why…
1) Many hosting affiliate programs pay a flat rate commission. No matter how much a person orders, your commission remains the same.
And once the cookie expires, you won’t earn anything else if that person comes back to buy additional products.
When you resell, that customer becomes yours for life because they are purchasing from your branded reseller store.
As they continue to renew their domains/hosting and buy additional products from your store, you continually earn with every purchase for every product.
As your customer base grows (mine has been growing since 2002), your earnings will continually snowball — even though you are only earning a small percentage per sale.
2) Many reseller programs allow you to customize portions of your store (header, receipt, etc.) This allows me to offer incentives (freebies) that help drive more business to my store.
3) More control. Set your own prices so you have full control of your profit margin.
Reselling has been the lifeblood of my business since 2002, and it’s all because of the residual/passive income. It was the main reason I was comfortable quitting my 9 to 5 back in 2006.
A lot of you probably assume my business is based on AdSense or SiteSell (Site Build It!). Not even close. The residuals from reselling domains and hosting make up a substantial part of my earnings.
Why GoDaddy?
I chose Wild West Domains (GoDaddy) because they were one of the only reputable reseller programs back in 2002, but there are many others to choose from today. Hostgator also has a very popular reseller program, so you should check them out too.
I’ve been pretty happy with GoDaddy. They handle all my customer support and the perks for top resellers are nice too. In January, I was invited to an all-expense-paid trip to the FireSky Resort in Arizona for a reseller conference.
Quick Note: As I’ve said in other posts about reselling, I don’t want you running over to sign up as a reseller just because you’ve been wowed by this blog post. The main reason I have been able to do well is I have an audience that fits the hosting reseller business.
If your site is about fashion, it’s obviously not going to convert the way mine does. However, if your site targets Webmasters/Bloggers/Internet Marketers, this is something you may want to consider.
Downsides to Reselling
Just like any program, there are upsides and downsides…
1) As a reseller, you cannot charge anything lower than the parent company. So of course, you may lose business to more popular, well known companies because your prices are higher.
This has never been much of an issue for me because I offer incentives (free templates, a getting started guide, etc.) and I try to provide value to make up for the markup. It’s important that my customers get value for their money.
2) You won’t have the brand awareness of many of the larger companies so people may be skeptical of purchasing from you. This is where building up your own credibility and integrity through teaching and informing comes into play. When people trust and like you, they don’t mind supporting your business.
3) You have more control, but not total control. Even though reselling provides you more control than being an affiliate, you never have total control if you don’t completely own the company/business.
In Conclusion…
In spite of the downsides, I have no regrets about becoming a reseller. In my opinion, the positives outweigh the negatives.
So while those $100 hosting affiliate commissions may sound tempting, if you are looking for long-term/passive/residual income, you might want to consider reselling.
I’m all about portfolio diversification and building multiple streams of income. This is just another way to add a component of passive income to your monetization mix!
This seems like an interesting idea im gonna have to look into this a little deeper
I have never made any commissions being a reseller because of the fact that I have not much traffic in my blog and all my main traffics may not be interested in hosting and all but as far as I know,these pays lot.
You have good results with reselling because your site is about creating websites. I’ve thought of reselling lots of times, but I never managed to get enough interested customers.
Hey Lisa, I have a question for you about reselling websites. I have a Hostgator reseller plan and I know that they do not offer unlimited bandwidth so that is not something I can offer customers. I can’t go int WHM and set a plan to unlimited bandwidth. Does GoDaddy offer unlimited bandwidth on its reseller plans?
Yes, there is an unlimited plan. See this page http://www.securepaynet.net/hosting/web-hosting2.aspx?ci=1783&prog_id=2create
I think you are more than right about the flat rates and cookies, if my first purchase was $50 and that was all you are getting credit for, what about purchases that come later when people develop their business and start buying $200 or $500 packages at once.
Hi Lisa,
Long time reader first time commenter.
I’ve enjoyed reading and learning from your knowledge base over the years.
This article was a real eye opener and I really gleaned quite a bit about the Reseller’s business model.
If you wouldn’t mind, I do have a question or two for you.
1. How do you go about setting your client expectations for things they may go array, like website outages? Do they expect you to assist them if their site goes out or down or some other unexpected website problems that prevents them from accessing their website?
2. What type of language do you include in your hosting contracts that outlines the terms of your website hosting provider responsibilities?
Again many thanks and continued success,
Sunshine
Nice work Lisa!!!
I have seen people registering domain and sell them at higher prices to people require those domain names…. Interesting article…. planning to more google on same topic….
Hi Lisa,
Good post!
Talking of which, how do you see Hostgator’s reseller package compared to Godaddy’s?
Also, if i want to have my hosting company with full control, do I have to buy a Dedicated Server?
Hi Lisa,
I am really blown away by how you write your articles. It is giving me a lot of information and it makes me talk to myself and say ,Yeah you are right! that is the more I read your article. I honestly can’t find any interesting topic as what you are coming up in my point of view which is why I am able to read the whole article. I agree much on what you have said I too would prefer and long lasting income rather that hit big time and find out later there is nothing left for me.
my opinion is if are good in marketing reseller programs can really be profitable for you but again that requires marketing skills
I’m interested in reseller after I viewed your article.Like you said it’s snowball.Thanks for sharing.
I have had a similar reseller account for years. The challenge was how people get to your site. I find the majority of traffic comes driven through successful promotional efforts and sites rather than organic? What have you found?
Bill
Hi Bill,
I’ve actually had the opposite experience. Most of my business has grown organically.
I am working on web hosting affiliates now a days, and this article gave me some useful information about the affiliate networking..
Thanks for the informative post. Most people (including myself) focus far too much on ad revenue I fear and totally overlook over income streams.
Hi There Lisa!
I found your post on Ana Hofman’s blog. I will definitely keep you bookmarked. Great post. I can honestly tell you as an affiliate marketer. I have made more money with hosting plans then any Clickbank product or JV launch to hit the market. Cheers!
Chad
That’s really interesting. I know you rave about SiteSell so I assumed that was the big moneymaker and what really led you to quit your “regular” job. Great share!
GoDaddy is a no-no now 😉
Hello,
i took your advice about this and have succeeded in having a full automated webhosting and domain reseller website. I find it a good source of passive income, i just need to advertise it and handle customer support efficiently. With my providers, i was even able to bring down my hosting fee at 2.95$ per month. and i sell dot com domain as from 11.99$. U could check out the website “yiyamedia.com”.
thanks for the wisdom
Providing additional value is a great way to encourage sales, people will gladly pay more for a (real or perceived) add-on.
Information regarding passive is pretty good. You have discussed about Godaddy and their reseller program. You also described how we can do more busies from existing customer. This is really a resourceful article.
currently my passive income is from adsense and amazon affiliate, but your experience seems like gold 🙂
scanner reviews
That’s really interesting. I know you rave about SiteSell so I assumed that was the big moneymaker and what really led you to quit your “regular” job. Great share!
Thanks!
Lisa,
Thanks for this post, I’ve been intrigued by the difference between affiliate sales and reselling for a long time. And this post did more than clear it up! I appreciate it very much and can’t wait to look around your blog some more.
I would have to agree with Dave Lucas with his above comment, But it’s always worth looking into
That was a good passive income source for me too.
I owned a web hosting company for 2 years. Started with a reseller account and saw the point you mentioned back then (that you can’t undersell the parent company). Eventually moved over to another server.
Also tried enom for domain reseller but never got too far. Sold company before launching it.
That was a good passive income source for me. Couldn’t hold on to it due to schedule 🙁
This is very interesting, but unfortunately all of my time is going to my website and developing videos. I may have to come back to this though!
I would love to have a passive source of income and thanks for providing me the tips for doing it. Also I want to retire at a age of 45 for that i need to have sources which give me income without my involvement at that time.
This is really nice for making money form reselling domain.
but is that good for long term income.
and lisa thank you for sharing this kind of post.
and godaddy.com is one of best domain seller site.
Hi Mellisa,
As far as long-term it’s one of the oldest programs I’ve been apart of — 9 years. And I’m glad I chose a reputable, successful company like GoDaddy.
woaa That’s really fantastic.
Lisa thank you for replying.
I wanted to learn all about affiliate marketing, can you help me out as a noob on this field? Btw, good to know that you quit your 9-5 job. And your commentluv doesn’t seem to be working, any ideas?
Hey Lisa,
I’m Ben, I live in Australia and I’m 14 years old. I’ve been doing affiliate marketing for about 2 months and I’ve made in total $342. I was using “cashle” a website you wouldn’t know about, I brought 6,000 people to their website and in return I got about $270. I just started using ClickBank and I’ve made $81 in sales in 1/2 month. I’m just wondering, It’s now been 2 months and they have not sent me a check for $81, would you know any possible reasons for this?
Thank you so much for taking the time to read this,
Ben
Thanks for the informative post. Most people (including myself) focus far too much on ad revenue I fear and totally overlook over income streams.
This is definitely something I will look in to in the future. Right after I find some things of my own that can sweeten the deal for potential customers.
I have never looked at the benefits of this method. What I have considered is opportunity and sleeeper sites. For example when Quatar was awareded the world cup bid, buying such a related domain, having informative articles and then promoting that site to subsequently sell the domain in a few years time is another way to generate money in this downturn.
Thanks for the great share Lisa!
I’m rather new to this and still learning but is it possible to earn enough using one method (like the one you posted) to quit a 9 to 5 job or should i mix it up with other things?
Yes it’s possible, but you should always diversify with other income. Never rely on one or even two sources online.
thx for sharing this reselling hosting is good idea will try it in future
It is very nice to know about the various sources you work on for your passive income and how efficinetly you do it with minimum of fuss. I am also a believer that you should have a huge source of passive income to lead a safe life in future. Great post, you are a inspiration to all of us.
Really interested in this. Will have to look into it another time
though, as my website takes up all my time.
Interesting, i’m thinking of doing re-selling one day but at the moment sticking with clickbank.
thank you for sharing this. I have tried to earn money through speakasiaonline, but its down now. Hope to find another legitimate earning source from your aforesaid ways.
have you tried Google AdSense and affiliate programs? There’s online marketing companies such as commission Junction, link share, performics, Digital River, Golden can, share a sale, pay dot com, clickbank, as well as many more. If you need a short list of companies, just give a holler, as I am happy to be of service in passing along useful information to empower others! 🙂
Reselling domains seems like a good way to make some extra cash. Do you think this would work only in blog / seo niche sites or also in an english learning blog?
Many are the sources of passive income but we all have to find what will work for us. Whatever will work for us is what we will have to follow as our passive income.
I really want to know is reselling domains a big time opportunity to earn more than blogger
Anything can be a big time opportunity if you have the right audience and product to sell to them. So if you target new bloggers, webmasters, etc. then yes of course it can.
Dale,
whether it’s domain reselling, making money from affiliate programs, or selling products online directly… There is opportunity for everyone who “stays the course”. It won’t be an overnight success, but as you keep at it over course of time, you’ll notice how the sales will start coming in daily. Persistence is the key 🙂
well, reseller works when you have a product to tie in like lisa with information, or some who does web design, logo, or stuff like that. the guy who has megacheapdomains ties that into his non-profit suicide.org. what i’m saying is, it is bad as a stand alone store.
What are the main servers to do this partnership?
That’s really interesting. I know you rave about SiteSell so I assumed that was the big moneymaker and what really led you to quit your “regular” job. Great share!
I use your reselling option and I am more than satisfied with it. I keep buying from WPalace any time I need something and I will continue doing it. The support is great as well.
I think you are more than right about the flat rates and cookies, if my first purchase was $50 and that was all you are getting credit for, what about purchases that come later when people develop their business and start buying $200 or $500 packages at once.
Thank you for being a customer, Brankica! You rock!!
Don’t you have to handle support or are all customer support emails and phone calls handled by the company when you are a reseller?
Do they answer the phone using your branded name or GoDaddy? I assume the later so doesn’t that cause confusion?
Nope, all support is handled by GoDaddy. I would never have time to be able to handle that.
Interesting. So how do you promote website palace and do you mention you’re a reseller to people when you do? If you do mention you’re a reseller how can you add value if (like you said before) you’re not able to offer prices below what the main site is offering?
Do GoDaddy promo codes work for your site I wonder?
Very interested in this as I’m one of the people doing hosting referrals via one time fees so the more you can clarify that’d be great.
Thanks again
You can create your own promo codes and I offer them in in my free book ThePerfectSiteGuide.com. There aren’t as many as GoDaddy, though.
The support staff is trained to stick with our brand. They even do phone upsells for our account if someone calls.
I disclose that I am a reseller in several places on 2CreateAWebSite.com. I offer value by providing a free getting started guide, video help and I offer my easystartertemplats.com ($37) for free when they order. You can customize the receipt page so I provide all those offers on that page that is available for download after a person orders.
Ahhh ok so that’s the value add. That makes a lot of sense then.
Very cool. I’m going to consider checking that out in more detail then.
You could use shared hsitong, VPS or dedicated any one of these types of hsitong would work. However, be sure that the type of hsitong you choose can cover the disk usage you need as well as the bandwidth.Something else to keep in mind is how fast the servers are for the host you choose. If the servers are connected on a slow or overloaded connection your users will have a hard time downloading or viewing your video content. Similarly, if your host uses poor quality servers, this could also drastically effect the ability of your users to download video content.Be sure to look at what your host offers before you commit. Hosts that offer unlimited disk space and/or unlimited bandwidth are usually not providing hsitong capable of handling high amounts of bandwidth or large disk capacities.
I have just recently expanded this market. As I do SEO for a number of local offline businesses, it made sense to recommend Hostgator to them and I can get referral commissions. One thing anyone venturing into this is to consider aftersales service. Hostgator in my opinion has the best aftersales service going. They go above and beyond their scope to help clients and that says everything. Plus it helps recommendations where I can get even more referrals.
Great post,
Kind regards
Brenda
Excellent post Lisa and one that resonates with ME very well. The key is passive and residual / recurring / recursive (everyone calls it something different). Reselling is also a great option for a web developer. Each time you procure a client, you also procure a small stream of residual income. It all adds up – example: newsletters (aweber), domains, hosting….
Multiple streams of passive and residual income is the name of the game. That is what my blog stands for!
I think we are all in the same game. So Sunil, how do you go about this recurring income thingy?
Although I’ve written articles advising bloggers against joining affiliate programs, I know some of them are actually GOOD. Thanks for bringing attention to this one – and of course you and your readers are welcome to share comments on my blog as well.
Blog On!
affiliate marketing and blogging will surely help to bring in the $ gUaP $
=)