The Final Chapter: Making Money With Web Hosting

makemoneyThis article is meant to serve as a conclusion to the Ultimate We Hosting Guide. Hosting is one of the most lucrative online industries. Web hosting related keywords are among the ten most expensive ones on Google AdWords. This means, on the one hand, that making a good amount of cash from Web hosting is pretty simple, even for a complete beginner. On the other hand, the competition is fierce. I’ve been publishing articles and tutorials about Web hosting for almost two months now. That’s a pretty long time. My site is about earning money with Web sites and not hosting providers. Sure, a good Web host is a must have, to make a money earning Web site work the way it should. A slow, unresponsive host will scare away potential leads and buyers. But beyond that, can we profit from Web hosting by creating themed money earning sites? Before answering this question, let me point out that I will only be discussing the Web hosting industry from one point of view here, and that is the one of an affiliate partner. It’s possible to profit from Web hosting also as a reseller and, of course, setting up your own Web hosting company. The latter is obviously the most laborious task to try and achieve. I touched upon it in chapter one of this guide and I won’t go into it any further.

A hosting reseller is one who purchases a large hosting package and, as the name implies, then resells it to several customers. For instance, resellers can get a dedicated server from Site5 and then sell shared hosting to some hundred or so people. If they get their package for $100 and resell shared hosting for $1.50 per month to each customer, they’re already making a huge profit of $50 per month. Rinse and repeat, and there you have a very profitable business. There is a certain amount of risk, however, so to say. That is because we need to purchase the dedicated hosting package beforehand and, typically, we won’t know if we’ll manage to find enough customers to cover the initial investment and make a profit! Rather than purchasing a dedicated server, we may start with a smaller option such as reseller shared hosting, also offered by Site5. With such an arrangement, we will not manage to accommodate more than four or five customers, but it’s a great way to start. We can then move to a VPS and finally to dedicated hosting, as the business grows. Like I said, however, I am only going to focus on affiliate marketing. This is the risk free way to profit from Web hosting. We don’t pay anything to become affiliates; we don’t risk a cent of our money and we can sign up as partners, without even having a Web site, in a few cases!

affiliate Affiliate Marketing and Hosting

Signing up as an affiliate with a hosting company is straight forward and simple. For some hosts, you may need an EIN (employer identification number), if you live outside the US. Getting one is simplicity itself. You do have to phone in the US, but if you use the method I show you here, you can get your EIN in fifteen minutes and be filling your affiliate application forms in twenty. If you live in the US, you may need to provide your tax payer identification number, instead, which you likely already have. All hosts I have applied with have accepted my application as an affiliate. I did use this little trick I came up with, when applying with the stricter companies, though. I would suggest you to do the same.

You can make as much as $150 per sale, when selling a shared hosting package. Some companies will pay you more than what the customer paid them, as a commission! As unbelievable as this may sound, it’s true. A new customer is worth a lot to a Web host, way more than the monthly renewal fee that the customer pays initially. Once average Internet users choose a host, they stay with that host forever. It doesn’t matter whether the new customer we bring in is a newbie, who will never get any visitors to his site, or an expert marketer who will create a great site that’s bookmarked by thousands. Every new customer brings endless possibilities to a Web host. These range from renewing the same shared hosting plan we sold them initially, to upgrading to powerful dedicated servers that will put hundreds of dollars in the pockets of the host. So, don’t be surprised if many hosts pay more than what you would expect for a customer.

choicesChoosing the Right Host to Promote

You may promote one host or multiple hosts. Some marketers will tell you that focusing on one provider is the way to go. Others will insist that listing options will give the impression that you’re unbiased and hence your leads will be more likely to buy from your links. Whichever way you choose to promote Web hosting, you will want to be able to do both, depending on the method you use to sell the service. And even when offering options, you will want to focus your readers’ attention on one host that you can profit from. Most hosts pay substantial premiums in addition to their regular commission, depending on the number of customers who sign up through your links in one month. For example, if I have five people sign up for Site5 in one month, I am paid $25 for each of the four, but if I get twenty customers in a month, I am paid $100 per customer. Arvixe, Siteground and Hostgator offer similar incentives. Let’s assume, for the sake of the argument, that all these companies pay the same rates as Site5. This isn’t true because, in fact, they all pay a lot more. Now, suppose I manage to sell twenty hosting packages. If I sell five on behalf of each of the four hosts, I will be paid $25 for each sign-up for a grand total of $500. But if I sell all twenty packages on behalf of one host only, then I will be paid $2000! Web hosting providers offer these premiums as an incentive to their affiliates, to have them concentrate their marketing efforts on one company only. Therefore, having a ‘favorite host‘ to promote, even when you want to offer options, is unquestionably a smart move. So which hosting company should you focus on? In my own business, I concentrate on two companies only, choosing the one best suited to the methods I am using depending on the context. Here are my criteria for picking a host to promote, in order of importance:

lightsIs it a good product? This is only important if your business model relies on inbound marketing. If you’re promoting hosting to your leads or the folks on your list, you will want to make sure that it’s the best service it can be. You don’t want to recommend a mediocre host to these people, as that will likely damage your reputation and possibly your chance to do further business with them. The host that provides the best performance is Site5, in my opinion. Conversely, the quality of the host is irrelevant if you’re promoting on a forum using an anonymous name, a hosting review site or pay per click ads. As far as any ethical considerations go, I leave those to you!

lightsThe final conversion rate: quite simply whether I am paid or not. Don’t confuse this with sign ups. Even if you sell a hosting package, that doesn’t guarantee that you’ll get paid for it. Some hosts will just not pay you, giving a myriad of excuses why they aren’t. Hostgator is well known to do this. How do you know if the host you’re promoting will be fair with you? Search for their reputation, as affiliates, on Google. A good indication that the host is a good payer is when they are mentioned often on the fake review sites. That’s enough proof that they have been honest with whoever is running the site. To save you the trouble of doing your own research, Bluehost is the company that converts the best of them all.

lights Does the host track conversions? Seeing where your conversions come from is crucial to increasing sales. That’s because focusing more on what works and less on tactics that don’t convert is an essential part of the job of an affiliate marketer. On what link did that customer click on before signing up for the hosting plan? Was it your site, a forum, Facebook, YouTube, Yahoo Answers? And which article/post/page/video/answer was that? Many hosts, such as Bluehost, will provide the exact link that the customer clicked on, the time at which he clicked on it, his location and IP address and even the domain which he or she registered! Site5, sadly, will not give me any of this information. There are techniques and software programs that can help with this, if the hosts don’t provide this service themselves. I am not going to into that today, though, since it can become quite complicated. To start with, I would look for a host that does provide this data through their affiliate console.

lights How popular is the host? Or, I should rather say, how unpopular. The more popular the host the harder will be for you to get conversions. The main reason for that is that, by the time a potential client clicks on your link, he’ll likely already have clicked on someone else’s link, while researching for a host that might suit him. Before a buyer arrives to your site, he’ll likely have visited Google, a few fake review sites, forums, Yahoo Answers and an infinite number of other venues. Your chances of having your cookie placed in his browser are very slim. The first merchant that refers the buyer to the company is the one who gets a credited for the purchase. Companies like Bluehost that pay very high commission rates and provide a near perfect conversions tend to be preferred by review sites, as well as Internet marketers, and hence are extremely popular, in every sense, good or bad, of the word. Going for a lesser known company that pays much smaller fees, such as Site5, sometimes can increase your chances to be credited as a referrer.

I haven’t included the actual dollar amount of commission offered in this list. While the commission should be decent, performance premiums should also be taken into consideration. But final conversion rate is a much more important factor. If a host offers $200 per sign-up and then pays me only once every ten sign-ups, I may as well opt to promote a provider that pays me $30, but does so every time I make sale. To summarize, choose a host from which you can profit the most. Profit can be both monetary gain and/or earning a good reputation. If you decide to promote a host that sucks but that pays a lot, you may make money in the short term but, remember, that promoting poor quality products and services will damage your brand and make you lose leads, which are one of your greatest assets.

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