Top 5 Reasons Why People Quit Web Hosting Business
Starting an online web hosting business has become quite easy. The best part of web hosting business is that you don’t have to fulfill any criteria to qualify to become a web hosting provider. All you need is a website, hosting space and a phone number to kick start a web hosting company. Many people find this very easy and start the web hosting business.
Below are few reasons why people give up their web hosting business:-
1. Profit Margin – Making profit is the most challenging part of any business. In web hosting business people offer crazy discounts without thinking much about profits. The tendency of people is to focus on mass and attract as many customers as possible. There is a cost involved behind offering service to every customer and on top of that profit has to be made from every customer. This is the area where many hosting owners fail; they manage to attract customers but fail to make profit out of it.
2. Infrastructure Cost – To start any business some sort of investment is required. In web hosting business, infrastructure is utmost important to keep the customers website up 24/7. A single downtime may affect your business and spoil your company’s reputation. In order to setup a quality infrastructure a decent investment is required. If a good infrastructure is used and cheap hosting plans are offered on it then it starts getting difficult to justify the cost of the server hardware.
3. 24/7 Support – Most web hosting companies hate to offer 24/7 support. The nature of web hosting business demands round the clock support and service. A web hosting company has to offer 24/7 live chat, email and phone support. The hosting companies fulfill the requirement during business hours but when it comes to offering support and service during off peak hours, festivals and weekends the problem starts.
4. Building A Team – An individual can handle few customers for a certain period but when the customer base starts growing more people are required to run the day to day operations. Getting talented people at a lower cost is not easy and if you are not making good profit then you cannot afford to hire good people. Inexperienced people are hired and trained and there is no guarantee whether the inexperienced staff would continue or quit the job after few months.
5. Poor Promotion – As mentioned in the start of the article, starting a web hosting business is easy but promoting the business, getting customers and surviving in this saturated market is not that easy. You have all the basic things required to run a successful web hosting company; good website, contact modes, payment options, hosting space etc. To get customers you have to promote the business on the web. There are free and paid options to promote the business but it doesn’t guarantee whether you will get the customers or not. Even if you don’t have a single customer you have to pay a monthly recurring fees to run the business. This recurring cost starts to become a burden when you have fewer customers or more customers with low profit margins.
Easy Way Out
If you have failed as a web host or confused whether you should start a web hosting business then there’s an alternative that can save you from any mishaps.
By becoming a reseller web hosting provider, you save a lot of your efforts from the above which reduces the chances of any failure. You don’t need to invest a lot for the infrastructure, neither you need to hire a team. Simply buying a web hosting plan is sufficient.
As a reseller, you buy a hosting plan from the web hosting provider and can resell it at your own price. Here, as you are buying server space from a web hosting provider in bulk, you get it at a cheaper cost. Additionally, you don’t have to spend a lot buying the datacenter and worry about routers, switches, firewalls, storage systems, servers, etc. Neither there is any server maintenance task involved. Also, the cost of setting up a team will be cut down. In case any technical issue arises at your client end, you can contact your web hosting provider and get help from them.
So, if you are planning to start a web hosting business, you can consider becoming a reseller instead.
It’s always the right time to start a business. The future of web hosting business is very bright. There are 47 million SMB’s in India, out of which 30 million are running micro businesses and 16 million are running small businesses. Only 1.1 million SMB’s have registered the domain and most of them are not having an active website. It would take time to educate the people, the hosting company’s who will survive in a long run would own good share of customers from this 47 million SMB’s. The web hosting companies would be in the league of billion dollar company if the profit margin is maintained between 30% – 35%.