Should I keep my reseller hosting business?

As a web designer, I’m always looking for ways to help my clients (I know this somewhat contradicts my previous post where I’m trying to remove extraneous services…). About 3 1/2 years ago I started NOCO Hosting and became a reseller for XO, eventually moving all my customer accounts over to HostGator.

For the most part it’s been a profitable and nearly hands-off experience. I’ve been quite happy with HostGator’s tech support and services. My clients like it because they have someone who can talk to them in plain English when there’s a problem, and they don’t have to deal with setting up a hosting account with one of the big-box providers.

I like it because it’s so much easier for me to hop into WHMCS, create a new account, set up the account and upload the site than it is for me to jump through all the hoops required to get access, get FTP info, and deal with weird server configurations at the huge hosting shops, or, even worse, on someone’s basement server.

When something goes wrong, though… then I sometimes just want to run away.

A few months ago I had a rash of phishing hacks run through a few accounts on my server. As it stopped as quickly as it started, I strongly suspect it was a server security issue.  Dealing with that occupied most of my time for a week, and when the rare problem does crop up it tends to be very time-consuming. This happens on average about 1-2 times per year (not phishing necessarily, but some issue or another that has to be resolved right away and affects all or most customers).

So I have a few options.

  1. Keep everything as is. NOCO Hosting runs as a separate website from Red Kite Creative, my web design business site, and anyone can sign up for an account there. This is good monetarily, but I don’t have enough non-client hosting customers to really make it necessary. It’s never taken off the way I hoped it would, even though I’m one of the only green hosting companies in my region; when I started I was sure that it would be very lucrative, but not so much.
  2. Create a new reseller account under Red Kite’s aegis and gradually move my hosting clients over. I’d stop operating as NOCO Hosting and only offer to host Red Kite clients, mostly for convenience sake for me and my design clients. I’d get rid of the NOCO website altogether.
  3. Totally drop hosting services as part of narrowing my overall business focus and charge more for the time it takes to assist clients with other hosts.

Any other web designers that offer reseller hosting services – what do you think? Is it profitable enough for you to stick with it? How often do you have large-scale problems pop up that make you think twice?

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