Reseller Hosting – Why I Avoid It

I’ve never chosen the reseller route for my own web hosting business, and I want to explain why. In my experience, many people — even those who should know better — confuse reseller hosting with shared hosting. While both involve hosting multiple sites on a single server, the structure, pricing model, and client relationship are completely different.

Because of this confusion, I recommend you avoid using the term “reseller hosting” when describing your own hosting services. It can create misunderstandings with clients, making them think you’re offering something far less valuable than what you actually provide.

How Reseller Hosting Works

In a reseller hosting setup, you’re essentially a middleman between the client and the actual hosting provider. You purchase hosting capacity or services from a larger company, then resell them to your customers — often under your branding.

For example, GoDaddy offers a reseller program through its entity WildWestDomains.com. Under their program:

• You earn a commission on every product your client buys.
• You gain access to their account so you can help manage their products.
• They provide:
  • White-label eCommerce storefront
  • Credit card processing
  • Sales and commission reporting
  • Standard buy rates (up to 20% off retail pricing)

Similarly, WPMUDev offers a legitimate reseller program where you can sell domains, hosting, and email in a “one-stop shop” model. This can be a quick way to get up and running, because they provide much of the infrastructure and branding support you need.

The Downsides of Reseller Hosting

While these programs can be convenient, they come with significant drawbacks:

1. Layered Markups Mean Higher Costs for Clients
   In most reseller arrangements, the provider (GoDaddy, WPMUDev, etc.) marks up their prices to cover their costs and profits. You then have to add your markup to make it worthwhile for your business. By the time the client sees the final bill, the price can be significantly higher than if they bought hosting directly — and that can make you look expensive compared to competitors.
2. Limited Flexibility in Client Relationships
   Reseller programs work best for a narrow client profile — typically, those who want you to handle absolutely everything. But in reality, I see two common types of clients:
   • Those who want you to fully manage everything — domains, hosting, email, updates, etc.
   • Those who just want you to manage their existing setup with their current host or registrar.
   Reseller hosting doesn’t fit as smoothly for the second group, and can complicate arrangements with clients who prefer to keep their accounts independent.
3. Excludes Some Popular Website Platforms
   Many businesses today use platform-specific hosting like Shopify, Squarespace, or Wix. These don’t integrate into reseller hosting models. If your company is built entirely around a reseller program, you’ll miss out on a large segment of potential clients who use those platforms but still need ongoing webmaster support.

My Recommendation

Suppose your long-term goal is to build a web hosting business as part of your webmaster services. In that case, I suggest using your hosting plan (or managed hosting service) and selling that as part of your package — without positioning it as a reseller account. You’ll avoid pricing confusion, maintain flexibility for different client types, and ensure your business model can adapt to the diverse platforms your clients may use.