What is a reseller?
The definition of a reseller is a company or individual that buys merchandise or services with the intent to resell them to a third party. Sometimes there is more than one level of resale before the product reaches the final consumer.
The two most common types of resellers as it relates to the Internet are in the domain name selling and web site hosting businesses. Every registrar that sells domain names is a reseller for ICANN. In the area of web site hosting, resellers make a bulk purchase of space and bandwidth and then resell it to others.
In both of the examples above there may be several layers between the source of the goods and the final consumer. For this article we are going to talk about web hosting resellers.
A reseller account is ideal for someone who would like to enter the hosting business with little or no start-up costs. A decent quality reseller account can be purchased for less than $20 per month so you can create a web hosting company without owning or leasing any equipment at no initial investment and a cost of less than $20 per month. You don't need any equipment! You don't even need a broadband connection to the Internet. Many reseller providers supply you with everything you need to be successful in the online hosting market. Some offer ready-made templates and billing software. There are a few that do everything and send you a check once each month. All you have to do is bring in the sales.
Some reseller providers offer what is known as Private Labeling. That simply means that the reseller offers the services without accidentally or intentionally divulging the name of the actual supplier. The customer does not know and can easily determine who is supplying the actual product. This can be extended to include private name servers and branded control panels. This makes it much more difficult for those few clients who are always determined "go to the source for a better price" to succeed at finding the source.
Why in the world would you want a reseller account if you do not plan to resell the hosting to others? There actually several really good reasons why you might want a reseller account even if you do not plan to resell hosting.
Perhaps you have a number of your own domains to host and would like a little more control than you would get with a shared hosting account. With a reseller account each site can have its own control panel and the databases are not controlled via the main domain as they are when you utilize addon domains. Should you desire to sell a site you able to offer the purchaser cPanel access to backup, download and transfer the site contents without being concerned about what else they might copy or download.
Perhaps you want to legally host your friends or social group. The TOS on most hosting accounts only allows you to host domains that you own in a shared hosting account utilizing addon domains. Anything else is a violation of the TOS.
Another example is a web designer that would like to offer hosting to clients as a part of a complete package of services. This can be an extra source of income and a value added service that keeps them loyal to you. It also makes updating the sites far easier when you need to do so as you control all the necessary login information.
Article modified 11-18-2008.