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!
I am also a godaddy reseller but don’t know how to promote this business because there is huge competition in the market and , it is very difficult to get higher ranking in search engines … can you help me by providing ways to get success in this field ? how to promote business ? i want to know your experience , how it’s all started for you & how you get traffic to websitepalace . thanks in advance . MAY GOD BLESS YOU!
Great information. I just started my business with the Godaddy reseller program. Since I am also a Web developer, I eventually would like to develop Web sites and apps for my customers but found the reseller program a great way to start. I appreciate the information you have provided in your posts. It makes me feel good about joining the reseller program.
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 Premedia sevices sites?
I think it will work with any niche where people need websites. The key is having access to that audience or it won’t work.
have you tried Google AdSense and affiliate programs? I can honestly tell you as an affiliate marketer. Thanks a lot 4 sharing! Lisa, thanks for sharing.
Yes I have been using affiliate marketing and AdSense since the beginning.
me too, Lisa. No one can ever go wrong with Google AdSense and affiliate marketing 🙂
Lisa, thanks for sharing. Indeed is grate to be your boss (even when hosting comes). Good post here!
Sounds like a pretty good plan. On a related note, I actually think viral marketing will start to supplant a certain portion of search traffic, as search engines can only fit 10 spots in the top 10 (obviously), so creating a website that gets loyal customers is probably a good alternative to creating a search-based site or post. Sort of tangentially related, though in the same vein as trying to get recurring customers instead of high turnover customers.
I love your blog Lisa!
This is my first time here, and I found some great inspirational tips for making a little more money. Thanks a lot 4 sharing!
I love your articles. Thanks for breaking down your 1# passisve income source. Always good information. Thanks for making me smile.
Mr. MakingUsmile
This is a good business but also a difficult one. You must be prepared about what you will do when something will go wrong (and will be in time). You don’t need to count just on the support of the mother-hosting company, in time you must learn yourself to deal with this problems. I run a hosting business between 2000 to 2006 when i sell this business (this can be a good idea), and I plan to restart now.
Thanks for the post.
Cosmo
I’ve learned that you can make more money being an affiliate of a web hosting program versus being a reseller. That’s just my personal opinion…