Reselling web hosting to clients

By Rachel Andrew

With the rise in inexpensive virtual private server (VPS) packages, the web is full of hosting companies making web designers and developers the enticing sounding offer of “becoming their own web host”. This is one of those things that sounds a really great idea until you start to unpack it. After all, who wouldn’t want to make some nice monthly income by hosting sites for their clients? Isn’t this just money for nothing? I’ve responded to this on a couple of forums recently and thought it would make a useful post here.

At edgeofmyseat.com we have always avoided hosting for our clients, the following reasons are why I generally believe reselling hosting to be a bad idea for small agencies.

Supporting hosted clients

Supporting clients who see you as their host can use up a lot of time. Will the money you make from reselling cover the additional hours of support and assistance?

If you are taking money for a service – providing hosting – even as part of a package of services you offer to your clients, then you take on the responsibility of ensuring that service is up and running, and solving any problems that the client has. As a reseller though you have no control over how reliable the service you resell is. If it is frequently down the compensation you will get from the host will be little to none – and yet you will be spending your time responding to upset clients with nothing you can actually do to help other than put in a support request yourself. As your clients will expect their sites to be up 24/7 you need to be happy to deal with these support requests at any time of day or night.

By taking on hosting you potentially end up becoming the go to person for all kinds of issues unrelated to the website. If you are a Mac user will you be able to help out a client who is having trouble with Outlook on their PC? If you provide the hosting and it includes email, you will be their first port of call when they can’t get their settings right.

Chasing small invoices

For many projects, especially those where the client has some kind of Content Management System to do their own updates, the designer will deploy the site and then not need to do further work on this site for some months. If you are billing these clients monthly, you will be bound to have some who delay paying for as long as possible or will only pay when chased. The cost to your business of chasing small invoices can be huge.

Updating and securing servers

Unless you are confident that you can solve most issues yourself with your server, or have truly excellent support from your host, then reselling hosting may cause more trouble than it is worth to you financially.

If you are not a systems administrator then it is likely you will have taken on a dedicated or virtual private server with some management software installed – something like Web Host Manager. Your host will provide the server with WHM installed and then you use WHM to generate sites including email and other features as needed. This all works really well, except that with many hosts you will be expected to do updates and apply security patches yourself. If you run into any problems then – once again – you will need to put in a support request to your host and wait, while pacifying annoyed clients.

Terms of Service and Insurance

If you are reselling hosting you should take advice on the terms of service you offer to your clients and whether your business insurance will cover any claims arising from a client believing they have lost money due to the hosting you provide being unavailable. This is going to be different depending on where you and your clients live, however if you do or are considering becoming a reseller I strongly advise you check this out to make sure you are covered.

If you intend to “switch off” non-paying clients this should also be detailed in the terms and conditions that they agree to. You should ensure that in taking that action against a client they have no way to come back with a claim that you have damaged their business.

It is also worth having a policy in place in terms of what happens if the client wants to continue with you as a designer but move to new hosting, or stop using your design services but keep the hosting. Would you be happy giving access to a site on your server to another designer, for example?

What can you do instead?

If you are pitching for jobs where part of the requirement is hosting, this doesn’t mean you should feel you have to offer hosting yourself. When I put in proposals that require hosting, I detail the costs for the hosting at a preferred supplier of ours (we like to use Memset). I will spec out the type of server, and the monthly or annual costs, and include this in the proposal. As we tend to put clients onto Virtual Dedicated servers I will also indicate the extra options that the client may or may not decide to have – such as firewalls, fully managed support and so on. The client then can make the decision about what they feel they need. They can also decide to go with an equivalent host of their choice – as long as it meets the minimum requirements for the application we are developing. This puts responsibility for that decision in the hands of the client – and although most will go with our recommendations they get the chance to check out the host themselves.

We are always happy to become technical contact for the account on behalf of the client, so they don’t need to deal with setting up a VPS or getting their site configured or even liaising with the hosting technical support if the box is fully managed. Once the site is up and running if the client sees that the server is down they can directly contact the hosting company, and utilize the 24/7 support there, rather than having to wait to get hold of us during office hours.

If you like the idea of getting something for hosting, some hosts have a referral scheme that will enable you to make money from hosting without ever having to operate as a host yourself. It goes without saying that you should only recommend a company you are happy with, but if you find a great company and they are willing to offer you credit against your own hosting or cash for accounts you put their way – then everyone wins.

What about allowing clients to preview sites?

When I have discussed this issue in the past, one argument for hosting client work yourself is that you can allow them to preview the site, but as they don’t have access to the server they can’t take it and not pay the final invoice. Disregarding whether you should be working for such scoundrels, if you do have these concerns – or just want to be able to demo work before moving it over (for example they have an existing site in place) then taking out a staging server of your own is a sensible step.

We use a Miniserver box at Memset as a staging environment, so we set up a subdomain for a project on that server and allow it to be tested there. As this server matches the environment most of our projects are hosted on it is a good way for the client to test. Quite often they populate all their content into the CMS on staging and we just migrate the entire database and folders of assets over to their server once they are ready to go live.

Personally I like transparency in dealing with other services used by our clients. I feel that it saves us from ending up in potentially messy situations where we are seen as providing a service that then fails for reasons outside our control. Would love to know other experiences of reselling – perhaps it works really well for you? Let me know in the comments.

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