As a reseller of internet services you need to be clear on the fundamentals before you start.

While there are many key components that comprise a successful internet business, the Top 10 factors that will cause you to be an UNsuccessful internet business are itemised below:

1. The internet is a fast-moving industry and changes can be upon you before you know it. Stay up to date with the latest news if you can.
2. Some of your users will lack even basic knowledge. This may lead them to make costly errors. You do not want to be paying for those errors.
3. Familiarise yourself with the basic procedures of your chosen ISP/hosting company so you can swiftly get things done.
4. When contacting your hosting company for support, always get the name of the support engineer you speak to. Explaining the problem more than once will get frustrating.
5. Make sure you have documentation that details the agreement between you and your user. A high percentage of acrimony in the internet industry is generated by misunderstanding.
6. Cheap usually means bad. However expensive doesn’t always mean good. Asking the right questions of any potential hosting company at the outset will save you time and heartache later on.
7. Any hosting company that you cannot call should be disregarded. If you can speak to a customer-facing technical person so much the better.
8. Saving money by paying £5 less a year to a cheaper hosting company will be a false economy if you then spend every day on the phone trying to resolve problems with them.
9. Decide how you wish to be perceived by your users. Are you looking to pile ‘em high and sell ‘em cheap, or provide a quality service at a premium? Pick a hosting company that matches your ethos.
10. Finally, keep accurate accounts. Profitability in the internet game can be a slippery fish and not understanding your cashflow and bottom line is a recipe for disaster.

Hosting & Connectivity Issues

The first step is making sure that you place webspace limits on your users, as your ISP will almost certainly place limits on you.

Failing to tell a user that they are entitled to a set amount of webspace and a set amount of bandwidth is a sure way to end up with a bill from your ISP that you can’t pass on.

Swallowing costs of this type can cripple you.

For example, your ISP may allow you to buy chunks of space in 100MB increments at £20 a year…

Once you’ve stumped up the £20 for the 100MB of webspace, you need to apportion this space to your users…

You could offer your users a 10MB, 25MB, 50MB or 100MB package for £10, £20, £30 or £40 respectively….

10 users paying £10 each for 10MB? £100 in your pocket for your £20 outlay on the space, a profit of £80 a year…

4 users with 25MB? £60 profit…
2 users with 50MB? £40 profit…
A single user paying £40 for the whole 100MB? £20 profit…

The worst you’ll do in this example is to double your money.

You could even build in some element of risk, once it becomes clearer what your users are like. Let’s say you take on 10 users all paying £10 for 10MB, but then after a few months you notice that despite having 10MB to play with the vast majority only use 2MB.

You could kick yourself for letting them have all that space they are not using, or you could take a small risk and sell a few more hostings.

After all, the ISP may only care if you exceed the 100MB total, not how many hostings you sell to make up that total.

Before you know it, you’ve sold 15 hostings at £10 apiece and each user has an allowance of 10MB. This would be a problem if they all used their allowance, as your ISP would start insisting you pay for the extra 50MB. Luckily, your users are only using 2MB apiece, so even though you’ve sold 15 hostings their combined efforts are only using 30MB, still well within your limit!

The top end of this type of thinking is to offer each user a huge amount of space, say 1GB. The risk element here is quite large, as if some of your users take advantage of this and use the full 1GB you’ll end up paying your ISP for the space but not being able to charge any more to the user, after all, you gave them that amount of space to play with and they’ve taken you at your word.

Risky, but profitable, as users are more likely to buy from you when you are offering them huge amounts of space for a small fee.

Let’s hope none of them actually use it.

Note - At this point most partners realise why all those ISPs used to sell Unlimited this, and Unlimited that.

You also realise why those same ISPs tend to have some small print regarding fair use policy that enable them to switch you off if you push that word Unlimited a bit too far…

Similar rules exist for bandwidth. If you have a 2GB transfer allowance on each domain, you need to ensure the allowance for your user is at most the same and preferably slightly less.

If you don’t advise your users that they have a transfer allowance at all then you run the risk of one day receiving a bill you can’t pass on or mark up.

All it would take is for a user to heedlessly upload a giant file (image, sound clip, video etc) or for a link to their site to be added on a forum somewhere and before you know it the transfer trebles and you have a bill to pay.

The goal as a reseller is to have costs that are exceeded by your revenue. If you have a cost and no revenue at all - that’s bad.

So set a transfer allowance for your users. Make sure that they are also aware that exceeding their allowance will result in overage bills.

This means you now have two separate possible revenue streams to work with, their allowance and any overages.

You have a few choices to make:

Include an allowance that is the same as their actual allowance and then bill them for overages at the same rate as you are billed – The Nice Way

Include an allowance that is less than their actual allowance, so you can bill for overages earlier – The Cautious Way

Include an allowance that is the same as their actual allowance but charge slightly more for overages - The Businesslike Way

Or ruthlessly do both, allocating them a smaller allowance to allow you to bill them earlier AND then charge them more for overages – The Entrepreneurial Way

Once again, you can run a small risk here. Giving each of your users a transfer allowance that matches exactly the allowance from the service provider means that when a user eats up the whole thing, there’s no profit to be made.

Most users will use less than their allowance but a few will use it all or more. Charging a slightly higher fee for those users who want a higher allowance (so they don’t get overage bills) and then hoping that those who exceed their actual allowances and cost you money are more than supported by the extra fees you charged those who stay within their actual allowance.

And then you have the big risks. Giving users huge allowances in the certain knowledge that almost all will come nowhere near it. The heavy users will be attracted to you and you will always take overage hits as the odd user goes 20GB over their actual allowance. However the plan is that the extra users that have bought from you cover the cost of the odd one that uses loads of transfer.

It’s always worth having a note in your terms and conditions to the effect that heavy users will be capped or otherwise penalised “because they are negatively affecting other users” – a favourite clause of some ISPs.

The same philosophies also hold true for broadband. If your ISP has a limit on transfer, you need to make your users aware of it, and any charges that might be made if they exceed their allowance.

Finally, most ISPs will give you an email quota which can relate either to the number of mailboxes or the size of each mailbox or both.

Make sure your user understands how many mailboxes they are entitled to and how many aliases on each. If these terms are unfamiliar to you, you need to get an understanding before you start offering email services.

Then get a firm grip on any email quotas. Find out what they are and give each of your users either the same allowance or slightly less.

Bear in mind that some users will want more mailboxes or a bigger mailbox quota than your standard offering. You must have a pricing structure ready to enable billing for these extra services.Bear in mind that some users will want more mailboxes or a bigger mailbox quota than your standard offering. You must have a pricing structure ready to enable billing for these extra services.Bear in mind that some users will want more mailboxes or a bigger mailbox quota than your standard offering. You must have a pricing structure ready to enable billing for these extra services.

In addition, some users will accidentally or deliberately leave copies of their mail on the mail server. This will slowly clog their mailbox and before you know it they’ll be on the phone complaining their mailbox is full and they can’t receive email. Make sure you know whether a user legitimately needs to do this and if not then make sure they are not inadvertently doing so.

You must have a contract, even if it quite rudimentary. You will need to make clear in it what the user can expect from you once a price is agreed and what you expect from them.

20% of web design projects go off-course or end in acrimony. Don’t let yours go this way.

The suggested main elements of a contract are covered below:

The Domain.

If you are registering a domain for the user you need to specify who will own it. Will the user own it right from the beginning, or will you be the owner at the start and then will hand it over once you have been paid? Bear in mind some domains have charges associated with changing the owner (officially called the registrant)

Making yourself the owner of a user’s domain is slightly sneaky, but partners use it as a way of making sure they get paid. Bear in mind any costs associated with changing the ownership to the user once they are all paid up.

Also consider the implications on the search engines. A .com domain name will typically fare less well on a uk search engine. Does your user trade globally or just in the UK? Make sure you advise him which type of domain is most suitable for his business. If you can, advise him to purchase the co.uk AND the .com, as these cover both angles should the user's business focus change at a later stage.

The Copyright

Who owns the design? Typically the copyright remains with the designer until all fees have been paid, but if you fail to specify in the contract it can come back to haunt you.

Make sure the user is aware who owns the copyright at the various stages of the project.

Retaining the copyright until you get paid is a pretty standard stance for a designer to take. Making sure the user understands the reasons and the consequences can be a delicate process.

If a dispute arises and the user has a copy of the site he can upload it and then you'll have to pursue him for your fee. Having a watertight agreement over the copyright of the site could end up being the ONLY thing that ensures you get paid.

The Support

Is the user entitled to call you at home? Out of hours? When you’re on holiday?

It’s important to make clear your hours of business at the outset, as users have an inconvenient habit of calling you at extremely awkward times and demanding support.

Ever tried to help someone set up an email account while in the bath?

The best way to control your support functions is to get an 0870 or premium rate number and use that. Some telcos can enable Day Parting and Route Plans that allow you to specify where the calls are routed, at what time. You should be able to set the number up to match your business hours and therefore have control over how much your users impact your private life. If you become a successful reseller let us assure you that this last factor will soon be the single biggest issue of your business.

If appropriate, put in place a good branded support solution. Your hosting company may be able to handle your support calls for you. This solution would typically involve you either paying a fee or pointing your support number at a premium rate number of their choosing.

This solution can be used when you need time off or go on holiday, but some partners are happy to switch the support burden to the hosting company permanently and pay for the privilege.

Weigh carefully the pros and cons of doing this. The branded support solution may be costly but the benefit to your business reputation can be enormous (if the hosting company have a good support team). However if the number of support calls you get is low, why pay what may be a standing fee for a solution that is rarely deployed?

The Payment

When should you get paid? Typically a designer will ask for 50% of the fee to be paid in advance and then the remaining 50% upon completion. Whether you decide to do it this way or another, it MUST be specified in the contract to prevent confusion or irritation developing.

Some of the other decisions made earlier in the process may affect how you approach this subject. Do you own their domain at the outset? Is the copyright ownership clearly stated?

You may be content to start work without any payment at all if so, as the user may be dependant on the domain name for their business email at this point…

Very few users will be content to pay the entire fee in advance and you must expect a snag list to develop. Being reasonable about a few small extras without charging is a good way to keep the user happy, but may develop into unreasonable requests. You must use your judgement to work out when to be flexible and when to be firm.

The phrase "ball park fee" is a curse. If you give a user a rough estimate it will turn to concrete in their mind. Never give rough estimates without knowing at least the basics of the project.

Search Engine Optimisation

If you can design a site to be search engine-friendly then that’s a significant advantage to the user. Make sure your fee reflects this and that you advise them you are doing this for them.

If you don’t have the necessary skills or knowledge, work hard to acquire them. 80% of internet users utilise a search engine and over half use Google at the time of writing (August 2006).

If you don’t know what RSS and CSS stand for, find out.

Some hosting companies will have in-house optimisation skills and some will not. Find out which is which at the outset. Designing a site that is extremely search engine unfriendly is shortsighted and you will be doing your user no favours.

A good organic listing is still the best way to get your user business.

Steer clear of sneaky moves. The search engines take the integrity of their organic listings very seriously and so spamming the engine or allowing your hosting company/SEO adviser to spam them with hidden content/ set up link farms/gateway pages is a seriously bad move. You might get away with it for a while but the long-term harm can be considerable.

Balance is the key here. Visitors to a website want it to look nice and be easy to use. A search engine spider will want it to have loads of keyword-rich content, inbound links and regularly changing content. It will care very little about the visual appearance.

So building an ugly site with loads of densely packed text might get a good ranking but the average duration of a visit will drop off the end of the earth. Conversely, building a beautiful site with some nice animation and minimal content might get the visitors clicking around, but they’ll never get to see the site in the first place as it will be ranked on page 138.

Try to strike a balance as best you can, bearing in mind the primary focus of your customer. If he is going to spend lots of money advertising in national newspapers then maybe the search engines are not a key consideration?

Pay Per Click Campaigns

Does your customer want an instant presence on the search engines? Pay per Click is the quickest way to get it.

Google run a PPC system called Adwords which you can investigate in their Advertising Programmes section. It remains the best and fastest way to get visitors to a website, but the costs can be enormous, depending on your customer’s industry.

As with most internet services, this reveals a potential revenue stream for you, as few users will want to manage it themselves. If you want to keep things simple just charge them a management fee for doing it. If you are willing to do a bit more work, tying your fee to the cost per click is a way of monetising your efforts in a more proportional fashion. The rewards can be considerable.

Google also runs Adsense, which is a way for websites to carry Google Adwords and earn revenue from their visitors. When beginning an Adwords campaign, it's always a good idea to disable this option, as it is believed the majority of click-fraud comes this route with unscrupulous website owners click on their own ads to increase their revenue.

You may also want to examine whether weekend clicks get your customer any business and if not, disable that too.

Cost Per Call

Cost Per Call is a relatively new online advertising model but is potentially very powerful. If your customer would prefer calls to clicks, this may be a useful tool.

It's important to understand the statistics, as calls will almost certainly be more costly to buy in than clicks. Find out if your customer would rather pay £15 for a phone call or £10 for 100 clicks. The conversion rates are key factors.

If your customer intends taking payments online then clicks are a winner. If not, calls are surely preferable?

Once you’ve been in business for a while you’ll find yourself being asked to supply some of the complimentary services, which is how search engine optimisation started out.

The experience of our existing reseller network has enabled us to put together some information on what you will likely be asked for, so you can proactively offer it rather than waiting to be asked.

Telephone Numbers

If you are building a website for a customer, the chances are they are either a new business or in a transitional phase. Either way, now’s a good time for them to sort out their telecommunications and if you can save them money then a cut of the saving can be yours.

An 0845 or 0800 number will significantly increase the odds of a potential customer calling them. A premium rate number will earn them money.

Looking into which of these types of numbers are most applicable to their business should enable you to make a recommendation that saves them money or gets them more calls. In addition, you can charge a fee to organise it for them or take a small cut of the revenue generated by the calls. If your customer gets lots of calls this can be a considerable sum of money.

The flexibility of non-geographic numbers (NGNs) means they are easy to deploy and manage. If you are dealing with the supplying telco on your customers' behalf, then loading the setup fee and/or taking a cut of the revenue is a simple matter, and the telco should be able to help you with the billing.

Most telcos have partner schemes that will allow you to obtain large discounts by paying a joining fee. While this may not be appropriate at the beginning, doing the maths can increase your profits once you are selling a few numbers.

Ecommerce

Integrating an ecommerce solution into a customers’ site requires specialist knowledge but if their business can cope with it and they are willing to invest the time and funds required it can change their business for ever.

There are three basic routes to an ecommerce solution and they are detailed below:

1. A bureau service like Paypal or Worldpay
2. A PDQ solution
3. A full –blown ecommerce package

Bureau Services

The quick and dirty route. They’ll be easy to integrate and quick to set up, but will be costly and the commission rate will be sky high. They may also hang onto the funds for up to a month!

Bureau services are the loan sharks of the ecommerce world.

Don't use them if you can avoid it.

Seriously, don't use them unless there is no other alternative.

A PDQ Solution.

This will involve the integration of a secure form onto the users’ site. This form allows a visitor to securely enter their credit card details which are then encrypted and sent by email to your customer.

The details are decrypted by their computer (pgp encryption at both ends) and they then enter those details into a conventional terminal, whereby their bank takes the money from the card and deposits it in their account.

A good half-way solution, but one that has 80% of the work of the full measures but only 40% of the convenience.

Worth recommending if your customer is nervous about online payments and is willing to do some work for their money. If they are in an industry where card fraud is common (computer hardware for instance) then you would not risk this solution as the security checks are less stringent.

The only way to find a revenue stream here is to charge a setup fee, as the actual transactions will be handled by the user and the bank.

A Full-blown ecommerce package

More hassle to set up, but cheaper in the long run, more secure and more professional in every way.

You’ll need the following:

1. A secure certificate (third party secure space is too messy to consider)
2. A shopping cart (there’s a few good ones and some are even free!)
3. An Internet merchant account (a special type of bank account)
4. A payment gateway

This is how you get them:

First, apply to the bank for the internet merchant account. A decision should be given in principle within a week or so. You can then proceed to decide upon and integrate a shopping cart (which will probably need a database to run off). The secure certificate can be bought and installed within 48 hours and a payment gateway can be deployed within hours.

Once these components are all working, you have an ecommerce solution ready to take payments online.

Don’t even start the ball rolling until you know what will be needed. A secure certificate will involve your user proving their business identity with some paperwork and you’ll need to decide which payment gateway to use before you start, as the process may need to evolve a certain way depending on the provider.

The internet merchant account is the cornerstone of the whole thing. If your user can’t get one then you need to look at the other two solutions mentioned.

Your chosen payment gateway should be able to provide you with a commission structure based on the transaction costs, so this solution gives you a second revenue stream to consider.

When advising your user how to get the internet merchant account you need to make clear three things:

1. Encourage them to contact a few banks, not just the one they currently bank with. Having a business banking service with one provider does not necessarily mean that bank will offer the best deal. Internet merchant facilities are completely separate from any other banking facilities, so advise your user to shop around.
   
2. Tell them to haggle. A better rate can be obtained in some cases just by asking. Bear in mind that contrary to most services, inflating the likely transaction numbers will not help as the bank will just see it as a bigger risk if the amounts involved are larger. Better to downplay the likely transaction volume and values.
   
3. Find the phone number of the ecommerce divisions for them. Just phoning their local bank and asking to speak to someone about an internet merchant account is a sure way for them to spend an hour explaining what they mean to a 17 year old work experience trainee.

Shopping carts can be researched online – OSCommerce and Actinic are good ones to start with.

Your hosting company should be able to advise you about payment gateways and secure certificates. If they can’t, hosting a secure site with them is probably not a good idea.

If you can find a hosting company that can do all the above then use them for all of it. Much better to have a single port of call for such a critical issue, as if an ecommerce site goes down and your user starts yelling that he's losing money, you really don't want to either be sitting on hold or discussing the problem with someone who has no idea what you're talking about.