Hey guys,

I recently bought a reseller account at Hostgator with the intention of acting as the host for the clients that I design for. However, I was told that it's a bad idea because I have no control over the servers, and as such I am very liable to be sued by my clients if their site goes down even though it wouldn't be my fault.

Are any of you resellers? How do you deal with this potential problem?

You can't be sued if their site goes down and your hosting them. The clients can try and get a refund but I don't think there is anything else they can do. I own a master reseller account but I don't run a hosting company(yet). To prevent this problem I recommend that you look into purchasing a VPS(Virtual Private Server) or a DED(Dedicated Server) from a trusted hosting company.

I assume reseller account is what you need. Actually you do not need to have any control over the server. I assume web hosting service provider will care of it and you will be definitely will be notified once it is needed.
Just do not worry about that

Cheers

Originally Posted by thomasfrank09

I was told that it's a bad idea because I have no control over the servers, and as such I am very liable to be sued by my clients if their site goes down even though it wouldn't be my fault.

It is quite common for resellers to work on a shared server before jumping into a VPS or dedicated box, and the liabilities are no different. The best course of action is to have a clear and concise Terms of Service (TOS) document that users must agree to before obtaining their account.

To prevent this problem I recommend that you look into purchasing a VPS(Virtual Private Server) or a DED(Dedicated Server) from a trusted hosting company.

That's not a surefire solution either. A VPS or a dedicated server can go down as well, not to mention that we don't know if the OP has the skills necessary to manage a server. If he doesn't, he would still rely on a third party for the job, or, worse, try to learn on the go and risk getting hacked etc.

uberhost is right. A well written TOS is how hosts protect themselves. You may ask your provider to use their TOS as a starting point. Most will probably agree.

Is that enough? I was told that since I am the entity that bills the client, I am the one that the client will come after for damages if their site goes down. After learning this, I decided that I would only host sites that are strictly informational. I don't want to get into anything like ecommerce, or anything that could lose significant revenue if their server went down.

Reseller accounts are designed for the reselling. You are selling shared web host and that does not requrie control over the server. That simply is not needed at all

What is simply not needed?

probably

Probably... what? Was he referring to ecommerce sites on shared hosting?

That is comonplace for all resellers. As for HG I think you shouldn't worry about that at all. They are good enough and have a lot happy customers.

You know, that'd be a good question to get on the phone with tech-support about, and ask them.

Originally Posted by thomasfrank09

What is simply not needed?

I assume he is referring to control over the server. There is no need to be panic to resell the hosting. Only thing you need a TOS to protect you. And there are so many designers using their reseller account to host heir clients.

I've been considering Startlogic/IPower as my reseller service or hosting and was on the phone with them for hours trying to figure all of this out.

As far as reselling goes, it appears that many hosting companies offer their products for resale (Startlogic is $2.95/month). We as resellers can then charge our clients whatever we want for the same hosting plan the company offers. Since we can put our own custom logos on the control panel and appear to have our own hosting company, which can really make a small business seem more professional, reselling could boost your business.

The downside seems to be the fact that we are then responsible for handling client relations and customer support, which could end up being more trouble than it's worth. Depending on the size of your client base, it may be a bad idea. It is safe, as far as getting the same hosting plans the reseller offers. It doesn't seem safe if you don't want to manage the servers or any support issues that may arise.

It's safe, it just might be more work for you. You can still call the reseller to handle difficult customer service issues, which could be faster in some cases.

If you're looking to make more money, then just get into an affiliate program where you can make $100 per referral instead of paying $2.95 per month, then charging $5.95 and only making a $36 profit. Just take into account that many affiliate programs don't pay our for a month or two, where the profit is immediate if you're reselling.

......seems like Startlogic/IPower gets horrible reviews these days.....

Just make sure you are taking care of emails, support issues and refund issues. If there are any issues, keep your client updated. In the end, you want your own dedicated server that you can manage on your own.

I don't think customers can sue you if their site goes down.. what they can ask back is refund.
All you could do is take care of their emails and take them into confidence that your host will be back asap

I think the main plus of going for a shared account to resell is that your clients will be supported by the your upstream provider.
While getting VPS or dedicated leaves the whole issue of support to you.

On the other hand, getting a cheap shared plan you have some time to get established before moving to serious expenses that any dedicated plan implies (the cost of the plan itself, support, panel and billing software).