Reseller guides5 min read
How white-label infrastructure reselling works
What a reseller actually does, where the money moves, and what to check before you put your name on someone else's servers.
Most businesses that sell hosting do not own a data centre. They buy capacity from a company that does, put their own brand on it and sell it to customers they already know. That arrangement is called white-label reselling, and it is how a large share of the hosting market works.
Three parties, two contracts
There is an infrastructure provider, a reseller and an end customer. The provider owns or operates the racks, servers, power and network. The reseller buys from the provider at a wholesale price and sells to the customer at a retail price. The customer has a contract with the reseller only.
White-label means the provider stays in the background. The customer sees the reseller's name on the quote, the invoice and the support conversation.
Where the margin comes from
The reseller's income is the gap between the wholesale price and the price the customer pays. A good program lets the reseller set that price freely, because the reseller is the one who knows what the customer values: a managed service, local support, a single invoice, or simply someone who answers the phone.
This is worth saying plainly: resellers who only pass capacity along compete on price and earn little. Resellers who wrap it in a service their customer needs can charge for that service.
What the reseller is responsible for
- Understanding the customer's requirement and choosing a suitable plan.
- Quoting, invoicing and collecting payment.
- Being the first point of contact when something needs attention.
- Anything you promise on top, such as management, backups or migrations.
What the provider is responsible for
- The physical environment: power, cooling and security.
- The hardware and the network it connects to.
- Delivering what was ordered, and working with the reseller when there is a fault.
Questions to ask before you join a program
- Is the pricing wholesale with a free hand on resale price, or a fixed commission?
- What are the fixed costs of being a partner, and how are orders paid for?
- Is the service white-label end to end?
- Where is the infrastructure, and who runs the network?
- Who do you call when a customer has a problem, and when are they available?
The answers tell you whether you are being offered a business you can build on or a referral scheme with extra steps.