Establishing a Reseller Operation – The Cost
Resellers must invest their start-up funds in specific products and services in order to establishing their operations. The typical minimum investment to start a Web host reselling operation is usually between $1,500 to $2,000. This money is used to establish the company, develop and promote a Web site, and purchase hosting services for resale. Usually resellers will spend at least $500 simply establishing their business.
There are many forms of legal structure that a reseller may choose for their business. The most common structures are sole proprietorships, general and limited partnerships and limited liability companies. Each legal structure offers organizational options that are appropriate for different personal situations and which affect tax and liability issues. It is suggested that resellers research each legal structure thoroughly and consult a tax accountant and an attorney prior to making a decision.
Most resellers will chose some form of incorporated or limited liability business. A corporation is a legal entity whose continuity is unaffected by death or transfer of stock shares by any or all of its owners. By incorporating, a reseller ensures that their operations' liability is limited to the corporation, and does not impinge upon personal assets. Usually incorporation can be achieved through an accountant or agent quickly and inexpensively.
Once a reseller has officially established a company, they will need to create a Web presence incorporating their new company name and brand. The site will serve to promote and advertise their products. For this reason, it is usually advised that resellers obtain a professionally designed template. Resellers must remember that their Web site must convey a sense of credibility in order to convert leads into clientele.
To convince consumers to purchase your services, your Web site must be professional in design and conception. It is possible to purchase a complete Web site template for approximately $500. The template should load quickly, have intelligible navigation and give the reseller the ability to add content through the use of a basic HTML editor. Once the site template is purchased, and the content inserted, a reseller should focus its attention on online promotion of the site. Resellers should allocate some proportion of their start-up dollars to advertising their site. Typically, resellers focus upon the most inexpensive methods of boost traffic to their new Web site. They mostly opt to spend $500 on search engine optimization for their Web site, or on text-based advertising. After the site is completed, and service packages are prominently displayed on the newly designed Web site, resellers select a higher-tier hosting service provider, which delivers value at a relatively low price.
Most first-time resellers will opt for a volume discount reseller, and will resell individual shared hosting packages for a substantial discount. As the reseller's customer base increases, so do the discount rate, and also the profit margin that the reseller makes. Most discounts average from 15 to 50 per cent. Since a quality shared hosting account averages approximately $25.95 per month, obtaining accounts is inexpensive. These accounts require less financial overhead, or there cost decreases, once the volume of your customer base increases.
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