A little about reseller web hosting
Many web hosting providers offer particular web hosting plans call "reseller web hosting". These plans are offered to individuals who want to try to do just that, re-sell their company's web hosting services.
What do web hosting providers offer reseller hosting?
A reseller relationship between the web host and the re-seller works like this:
the re-seller saves a lot of time and energy by not having to run their own web hosting servers. They can draw on the technical expertise of those operating the hosting servers in keeping the servers up and running on the web, installing and upgrading software, and often times taking responsibility for making regular backups of data.
The web hosting provider benefits from this relationship by outsourcing their advertising, billing and customer support to the reseller. These items can be particularly costly, and distributing the costs among a network of re-sellers can be tremendously advantageous.
How is a reseller account different from normal web hosting accounts?
Reseller web hosting accounts typically come with some extra tools that typical hosting accounts don't have. With these tools, you can manage customer hosting accounts and allocate resources between your different customer accounts.
How does billing work for a reseller hosting account?
Typically, the web hosting provider sends a single bill to their re-seller. The re-seller then bills their customers and uses their own system to keep track of invoicing. Web hosting providers generally let their re-sellers determine how much they will charge for their accounts.
Let's say you get a reseller account with 10 gigabytes of bandwidth and 1 gigabyte of storage space for $30. You can then split this into 5 different accounts, each with 2 gigabytes of bandwidth and 200 megs of space. To break even, you would need to charge at least $6 for each customer account. A markup of 100% is typical for reselling, so you would then charge $12 per account, making an additional $6 per month, per customer, or $30 total a month.
But $30 doesn't seem like a lot of money!
True. If you're running an entire business re-selling web hosting, then you're going to need a significant number of customers to get a decent monthly income. Web hosting providers improve their margins by automating as much of the billing and customer support as they can. In order to become a competitive, affordable force in the marketplace, you will need to take a similar approach.
Consider also using reseller hosting as an add-on for your other business can be a great upsell, and you wouldn't have to focus too much energy on advertising and promotion.