Both reseller hosting and affiliate hosting services have emerged as effective ways for individuals and businesses to generate additional profits by creating product variety. Both options enable your business to act as a middleman between a hosting provider and your clients, but their methods of providing web hosting services are very different. To determine which is the right fit for your business and its profit potential, it is important to first compare the two options’ benefits and disadvantages against each other.
Reseller vs. Affiliate
The first indicator of what the two business models are based on is in their names. A reseller is a person or business that sells something they have bought from a vendor to their own customers, whereas an affiliate is an arrangement where a person or business earns a commission for each sale they direct to or make for the vendor. Resellers tend to sell products and services at a markup, while an affiliate is rewarded for bringing customers to another company.
Pros and Cons of Reseller Hosting
Therefore, reseller web hosting involves a hosting provider renting hard drive space and bandwidth to your business, which is then able to rent that space to its own customers. Reseller hosting providers enable businesses to provide web hosting services to clients as though they were a web hosting company, expanding the services they can offer and building their brand. Typically, reseller hosting has a low startup cost and is easily scalable, serving to facilitate the growth of your brand.
That said, reseller hosting means that the product you sell is not as competitive as established web hosting providers, since it has to be marked up to earn a profit. Additionally, you do not have technical control over the web hosting service itself. This is often a benefit, taking the burden of server maintenance and management off of your business, but also means that the quality of your service depends entirely on the hosting provider.
Pros and Cons of Affiliate Hosting
Affiliate hosting, on the other hand, has three distinct programs that your business may get involved in. The unattached affiliate has no presence or authority in the product they promote, providing a pay-per-click affiliate link which they earn a commission from if a customer buys the product. The related affiliate has an online presence to promote the affiliate link of the related product but has not used it themselves. The involved affiliate is a user of the product and creates content that directly recommends it to their audience. These programs are easy to get started with when compared to a reseller hosting business. Once you have your unique link, you can promote it and start earning commissions. While sales may not be consistent, affiliate hosting requires far less commitment than reseller hosting.
Of course, sales are entirely dependent on the customer using your affiliate link and choosing to buy the product then and there. Even if they intend on purchasing hosting services at a later date, who is to say they will use your affiliate link? While more passive, commissions are far less scalable than a reseller program.
Evaluating Your Goals and Resources
When deciding between reseller and affiliate hosting, it’s essential to assess your business’s long-term goals and available resources. Reseller hosting requires a greater time commitment and upfront planning but offers recurring revenue opportunities. Affiliate hosting, by contrast, is ideal for businesses seeking minimal involvement, leveraging existing platforms for occasional, commission-based income.
Making the Decision
For the individual or business looking to scale, a reseller program is likely the right fit for you, enabling trust-building and growth potential. However, if you’re looking to make money on the side, an affiliate program can be a simple way to capitalize on an existing audience.
