Where should the reseller wishing to enter this market focus their attentions first, in order to make the most margin? Is it web hosting, domain registrations or selling web based services outside of these two?
Quite simply, everyone uses web hosting these days. From the smallest SME to the largest corporation, all companies these days need an online presence. There is a strong market drive for companies to be online, and therefore to have their sites hosted. Companies generally start by simply having their corporate site hosted, and then as needs grow, add ecommerce functionality or other applications to the site, increasing bandwidth as traffic to the site rises. This is the great thing about web hosting – people’s hosting requirements are only going to grow, which means that the resellers revenue will increase by a corresponding amount.
With the margin on servers dropping and most companies looking to sell services with a monthly fee rather than a one-off charge, web hosting represents a way of getting into this market. Companies can gain a recurrent revenue stream from hosting, and add further streams to this as their customers needs grow. The best way to accomplish this is to partner with an existing hosting company.
Although there has been a lot of talk about web-based services, there is still a great deal of demand for standard web hosting and domain registrations. With new domain names such as .eu and .mobi available, there is still plenty of scope for developing basic online presence before branching out into more elaborate online services.
Where does Web 2.0 enter the resale equation, if at all?
The main impact of web 2.0 is on the bandwidth required by the customer. Resellers should be prepared for content rich websites, especially those hosting audio or video clips, to be bandwidth-intensive because many users will be downloading or streaming content. Businesses may find themselves going over their bandwidth limits, and resellers should be prepared to be flexible in the first instance in order to establish a good relationship, but firm in the second instance, in order to avoid being taken advantage of.
Is there really room in such a crowded market for newcomers to make money?
I do believe that there are still gaps in the market, and because technology evolves so quickly, vendors and resellers have to adapt quickly to avoid being left behind. In particular, .mobi is the first domain name to have style guidelines published, because content must be suitable for mobile handsets. In this instance, resellers can offer guidance and consultancy services to help companies develop content and services for their mobile-friendly website so that they in turn can gain good revenues selling to their customers.
For example, your average hosting vendor may sell to a digital marketing agency or web services consultancy, who will in turn resell this service along with .mobi web design services to companies who want to market their products via the mobile web, as well as the traditional PC-based web. Unless these services are effectively delivered, the end customer will not make revenues from the standard or premium services that they offer via a mobile platform. After all, what is the point of offering gambling from mobile phones if you can’t figure out how to roll the dice? In this respect, there is certainly room for new players who can grasp what companies really want and need.
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