How to Price Your Reseller Hosting Plans for Maximum Profit 

Reseller hosting can be an incredibly profitable business model, offering agencies, freelancers and entrepreneurs the opportunity to sell web hosting services without the need to manage the infrastructure themselves. From attracting new customers to retaining existing ones, there’s huge revenue potential. 

Setting the right prices for your hosting plans is crucial for maximising profits while ensuring customer satisfaction.  

If your prices are too high, you risk losing clients to more affordable competitors. If your prices are too low, you could be cutting into your own margins. 

Here’s our guide for getting the pricing balance right to ensure maximum profit.

Understanding Overhead Costs 

Before setting your prices, you must have a clear understanding of your overhead costs. These costs are the foundation of your pricing structure and will directly impact your profit margins.  

By understanding these costs, you can develop a pricing strategy that ensures sustainability and profitability, while still providing value to your customers. Consider the following: 

• Server Costs: Consider the cost of purchasing server space from your hosting provider. 

• Bandwidth & Storage Space: The amount of bandwidth and storage used by your clients will directly affect your overall costs, so it’s important to factor in these variables when pricing your plans. With 20i, your bandwidth and storage space is unlimited at every level.  

• Licensing Fees: Additional costs may apply depending on your chosen hosting provider. With 20i however, licensing fees are included at no extra cost. For those seeking a free, open-source solution, Blesta is a great option for billing and client management. 

• Technical Support: Consider any additional costs associated with providing customer support. 

• Operational Costs: This includes everything from marketing to billing systems and administrative tasks, all of which contribute to the overall cost of running your business. With 20i, resellers get access to free web hosting billing and automation through Hostshop. 

• Profit Margins: Determine what your desired profit margins are. 

Know Your Audience 

Understanding your customer base and their needs is crucial. Your pricing should align with their expectations and budgets to maximise value and profit. 

Types of customers:  

💰 Budget-conscious customers (Personal users & small businesses): They look for affordability and basic, but essential, features. They often prioritise customer support. Keep entry-level plans affordable to attract them. 

💰💰 Mid-range customers (growing businesses, prosumers & e-commerce stores): They are willing to pay more for reliability, security, and performance. They want a host that supports high traffic, fast load times, and secure payment processing.  

💰💰💰 High-end customers (agencies & developers): They value premium features such as Website Turbo; with high-frequency hosting boosted by CDN pre-caching. Offering plans with premium pricing and features can cater to their needs. 

Competitor Research 

Conducting competitor research helps you set competitive, yet profitable prices, for your plans. 

Understanding what others are offering and how they price their services allows you to position yourself more effectively in the market 

Try to identify trends in pricing, features, and service quality to ensure your pricing remains attractive and competitive. 

Analyse how competitors structure their plans. Are they offering budget-friendly/ entry-level packages, mid-tier plans with added features, and high-end options for premium customers? Understanding these different tiers can help you develop a pricing model that appeals to different customer segments. 

Finally, determine what sets your hosting services apart. Whether it’s 24/7 customer support, enhanced security, or exclusive add-ons, highlighting these differences justifies your pricing and will attract customers. 

Competitor research checklist:  

Features

✔️ What key features do they offer? (Free SSL, backups, staging environments, white-label hosting) 

✔️ Do they provide any unique selling points (USPs) that set them apart? 

✔️ Do they offer unlimited bandwidth and storage, or do they impose limits? 

Pricing structure 

✔️ How do they price their plans? Flat rates, tiered pricing or pay as you go? 

✔️ What’s included in each tier?  

✔️ Are there hidden costs such as renewal fees or setup fees? 

✔️ Do they offer discounts? 

✔️ How do their prices compare to yours? 

Customer support  

✔️ What types of support do they offer? Such as live chat, phone, email, tickets, support articles.

✔️ Do they provide 24/7 customer support? 

✔️ How quickly do they respond to support tickets?  

✔️ Do they have an FAQs section or video tutorials? 

Scalable Plans  

Offer scalable pricing plans by creating tiered packages that cater to your different types of target customer. 

You can also increase revenue opportunities through add-ons and upselling. Offer add-ons such as SSL certificates, Website Turbo, automated backups, priority support or enhanced security as optional upgrades. This allows customers to customise their plans without forcing them into the higher tiers. 

For customers with more needs (such as large agencies managing multiple websites), consider offering them customised plans with flexible pricing based on their specific requirements and needs.  

Below is an example from our website from just some of our different Managed Cloud Hosting plans.  

We highlight the different pricing tiers for different customers looking for more, or less, features. 

Monitor and Adjust  

Setting the right price for your plans doesn’t have to be a one-time task, it can benefit from ongoing monitoring and adjustments.  

Follow the data 

There are a lot of expensive CRM and web analytics tools out there, but you don’t have to break the bank to gather the information you need. 

Use FOSS tools like SuiteCRM and Matomo analytics to track sales and customer purchasing patterns.  

This allows you to identify top selling plans and assess underperforming ones, helping you determine whether price adjustments are needed. 

Review competitors  

You should regularly review competitor pricing, ensuring you remain competitive in the market.  

Try signing up to your competitors newsletters and emails and follow their social accounts so you stay regularly stay updated on what others are doing. 

Customer feedback 

Collecting customer feedback is essential for understanding how your pricing is perceived and identifying potential pain points. 

Conduct surveys to gain direct insights into their thoughts and concerns. Additionally, analyse support inquiries to identify reoccurring themes and pricing-related issues, allowing you to refine your strategy accordingly. 

Stay informed  

Finally, stay informed about market trends, such as emerging technologies or a growing demand for specific features, and adjust your pricing accordingly.  

Follow industry news, through blogs, newsletters, reports and more, so you stay updated on emerging technologies and features as well as shifting consumer trends.  

Join reseller forums to gain relevant insights from industry peers.  

Mistakes to Avoid  

Under-pricing 

One common mistake is under-pricing. While this strategy may attract customers initially and can lead to an initial surge in sales, it often results in unsustainable profits. Businesses may find themselves struggling to cover operational costs, such as staffing and marketing, which can hinder long-term growth. 

Additionally, under-pricing can make your brand and products appear less valuable, potentially undermining the perceived quality. Ultimately, this can undermine your brands image, especially if you’re trying to position yourself as a premium provider.  

Low prices can also send the message that your product isn’t as valuable as competitors’ offerings, even if the actual quality is on par or better.  

Over-pricing 

On the other hand, overpricing can be just as detrimental.  

While it’s important to charge what your service and features are worth, setting prices too high without offering clear differentiation can alienate customers. 

Over-pricing without unique selling points, such as innovative features, superior performance, or exceptional 24/7 customer service, can cause you to lose potential customers to competitors that offer better value for the price.  

Summary 

Pricing your plans effectively requires a balance between profitability and customer satisfaction.  

By understanding your costs, researching competitors, and aligning your pricing with your target audience’s needs, you can create a competitive pricing strategy.  

However, pricing is not a one-time decision, it requires continuous monitoring, customer feedback, and adjustments to stay ahead in the market.  

Remain strategic and adaptable to maximise profitability and achieve long-term success in your Hosting business.