If you are searching for web hosting options, you may have compared reseller hosting vs shared hosting. Which one should you choose, if money is not an issue?

I decided to write this article because I recently helped a client to set up a script, and notice that he, as a newbie, is using a reseller hosting account. Puzzled, I asked him why. He said he had done some online research and most people said that reseller hosting is better.

Curious, I did some research too and realized that many bloggers are advocating reseller hosting. OMG.

Hence I decided to write this article, to shatter some of the myths that are going around… and to help you save some money.

I’m going to list down the arguments on why reseller hosting is better (based on what other bloggers wrote). Then I’ll share my own view point… and you’ll be the judge.

1) Reseller Hosting Saves You Money When You Have Several Domains

Most bloggers say this, “if you have ONE personal website, shared hosting will save you money. But if you run an online business with several sites, a reseller hosting will save you money, since it allows hosting of multiple domains.”

That’s not true.

Yes, some shared hosting services allow only 1 domain, and the cost is about $5/mth. But there are tons of hosting companies that offer shared hosting with unlimited domains and the cost is less than $10/mth. You can have 100 domains hosted on a shared server. No problem.

2) Reseller Hosting Makes You Money

“A reseller account allows you to sell hosting, helping you to offset the cost of your server.”

If your intention is to get into the highly competitive website hosting industry, then yes, by all means, get a reseller account. But if your intention is to offset your cost, it’s really a bad idea.

As a reseller, you have to provide your own customer support. If you are not server savvy, you will have problem serving your customers. Even if you are server savvy, your time will be better spent growing your key business, not to offset your cost.

3) Shared Hosting Is ‘Shared’

“With shared hosting, you are sharing the server with hundreds or even thousands of other users.”

That’s true, but what those bloggers didn’t say is reseller hosting is also shared!

The only difference is whether the server is shared among a few hundred people or a few people.

Other than reseller hosting and shared hosting, there are 2 more forms of hosting called virtually dedicated hosting and dedicated hosting. To put it very simply, only dedicated hosting is 1 server to 1 user. All other hosting plans are shared.

It doesn’t matter if you are sharing the server with 2 users or 200 users, you are still sharing, which means there is a limit to what you can do, and there is a risk of other users crashing the server.

Nowadays, hosting companies are giving unlimited disk space, unlimited domain and unlimited bandwidth for shared hosting (such as the baby plan in hostgator.com, which cost less than $10 a month). If you can burst their limit, it is their problem!

Even if you are on reseller hosting, all you need is one heavy user from another reseller to crash the server. Unless you are using a dedicated server, the risk of sharing is always there.

Conclusion

Unless you want to run your own hosting service, always go for shared hosting, until you hit some limits that force you to upgrade. Even so, you should upgrade to virtually dedicated or dedicated hosting. Don’t bother about reseller hosting.

Some Interesting Pointers

You may be curious why hosting companies can offer unlimited domain, unlimited bandwidth and unlimited disk space. If you are interested to know, here’s why:

- although they give you unlimited bandwidth, they limit the connection speed. It’s like giving you 1000 trillion dollars but you can just take out $1 a day (a little exaggerated but you get the idea).

- although they give you unlimited disk space and unlimited domain, they limit the Index Node, which is the number of files. For hostgator, the limit is 250000. Wordpress script itself has about 250 files. If you use some templates and plugins, you can easily hit 500 files. That means by the time you reach 500 domains, you would have hit the Index Node limit. (You can theoretically fail the server by uploading 250000 video files, each 1GB big. But remember, your connection speed is limited. It will be a pain to upload those files.)

Most reviews on web hosting plans are written by technical experts for technical experts. My discussion today is from the point of view of a marketer. I believe today’s discussion will provide a different angle to this topic.

Generally there are 4 types of web hosting plans to choose from, namely shared hosting, reseller hosting, VPS hosting and dedicated hosting. If you are new, you can see the pricing and detailed descriptions here.

If you are a server expert or you are planning to start your own webhosting service, this article is not for you. But if you are an internet marketer, looking for a web hosting plan that meets your needs, I’m sure my experience in web hosting will help you.

So, which web hosting plan should you choose?

Cheap is better

When it comes to hosting, paying more doesn’t mean you get more. In fact, it’s the reverse. Let me explain.

The cheapest plan is called shared hosting, which usually cost you less than 10 bucks a month. As the name suggests, shared hosting means you are sharing a server with probably hundreds of other users. Because of this, the hosting company has huge liability in these shared servers. It cannot afford to have these servers fail or it will affect hundreds of their clients. As a result, they do regular server updates, backups, maintenance and they provide 24/7 uptime monitoring.

But if you go for other more expensive hosting plans, the servers usually have lesser users and as a result, those servers receive lesser attention from the hosting company. (Most companies will deny this, but that is the truth.)

Take the most expensive plan, dedicated hosting, as an example. Most hosting companies will not monitor the uptime of such servers. Also, they will do lesser system maintenance and updates. Reason? Because you own the whole server and are responsible for the maintenance yourself!

In addition to this, most shared hosting plan offers unlimited disk space and unlimited bandwidth. Yet, almost all other more expensive hosting plans have limits on disk space and bandwidth. If you are using one of those more expensive hosting plans, you have to worry about your disk and bandwidth usage.

Think about it this way. By paying more, you get limited disk space, limited bandwidth and lesser server maintenance. This is what’s happening when you pay more for your web host.

Of course, there are limitations to shared hosting. But that is when you become a heavy user.

As a rule of thumb, if you are simply running niche websites for Adsense or affiliate commissions, shared hosting should be your best choice…… until you max out your shared server.

How to max out your server?

So far, the message I’m trying to put across is get a cheap shared hosting plan because you get the best server support compared to all other hosting plans. But that is assuming you are just a small-time marketer (most people are).

If you are a big-time marketer or going to be a big-time marketer, things may be a little different.

Below are ways in which you can max out the capacity of a shared hosting server.

1) Mass Mailing

One of the most taxing activities in a server is mass mailing. If you are intending to build a list and send out mass email through your own server, chances are, you can’t live with a shared hosting plan, not even a reseller or VPS plan.

Most shared hosting has a limit of 500 emails per hour. This means if you were to mail to a list of say 5000 people, it will take you 10 hours.

If you are using hosted autoresponder services like Aweber, this will not be a concern since emails are sent through Aweber’s server, not yours.

2) Product Launch

If you are planning a big product launch, there is a high chance that you will max out the server bandwidth.

“Kenneth, I thought shared hosting has got unlimited bandwidth?”

Yes, that’s a lie.

Imagine bandwidth as a pail of water. When you are promised with unlimited bandwidth, what it means is you have an infinitely huge water pail, full of water of course. The catch here is water must flow out from a tap. For shared hosting, you’ve got a small water tap. So if there is a sudden surge of traffic to your server, this small water tap may not be enough to cater to that surge. The result is you get very sluggish web loading speed and occasional disconnectivity issues.

3) Video Hosting

If your server hosts a lot of videos and a lot of people are watching it, you will run into the same bandwidth issue, as explained in #2.

Basically, any activity that involves huge data transfer to and from the server will tax on the bandwidth and create potential bandwidth issue.

4) Hosting Too Many Domains

Did I mention that most shared hosting plans allow you to host unlimited domains? Well, that’s another lie.

Yes, theoretically you can host unlimited domains. But in reality, each domain has files in it and there is a limit to the number of files you can host on your cheap server.

In hostgator, it is termed ‘inode’. Your maximum allowable inode is 250,000. But if you have more than 100,000 inodes, hostgator will stop backing up your files. So to get the best, you should limit your usage to 100,000 inodes.

Now, how is inode calculated?

Very simply, it is the number of files in your server. This means regardless of how many domains you have, you should keep the number of uploaded files below 100,000.

That may sound a lot, but guess what, I maxed that out once! That’s why I know this limitation.

Let me show you how easy it is for an average marketer to max out the inode limit.

Do you know that Wordpress script itself contains more than 700 files? If you install Wordpress to every domain and you have 150 domains, that will make up 105,000 files (or inodes). And I haven’t considered other possible scripts that you may be adding to your domains.

The good news is if this is your only issue, the solution is simple. Just get another cheap and good shared hosting account and you can load another 100 or so domains.

5) Excessive Concurrent Server Usage

If you run online services that require a lot of concurrent script processes or database activities, such as an online forum, or social networking site, you are likely to max out the apache and mysql process limit during the peak hours.

Take hostgator for example, the limit is 25 at any one time. So technically if you have 30 people making a system enquiry at the same time, 5 of them will get an error message. The chance is extremely low, but if your website has a lot of users, it can be possible.

These limits can be raised if you are on dedicated or VPS hosting, not if you use shared hosting and reseller hosting.

Conclusion

Just get yourself a shared hosting account, unless you have no better use for your money or you foresee that you are going to run into one of the five issues above.

When it comes to low-cost hosting, all the hosting providers offer more or less the same thing. If anyone claims to offer more, say it claims that you can send unlimited emails with a shared hosting plan, it just shows that the webhost is an amateur and will run into problem in the future, potentially a server crash!

The key is to get one that is well established (i.e. it has gone through enough server nonsense and implemented the necessary steps to ensure system stability). It must also provide 24/7 chat and telephone support, so that you can get help at any instant.

This week, we are going to talk about how to choose web hosting service if you are a beginner who are starting out, wanting to make some money from the internet. Next week, we will talk about web hosting for advanced online marketers. If you are an advanced marketer, be sure to check out our blog next week.

So, what does it take to make money online? Is it know-how? Is it technical skill? Is it your connection or network?

Well, all of these play a part. But the main factor is Right Mindset + Right Action.

You may wonder what has it got to do with choosing web hosting service. Read on…

Another question. What makes a good web hosting service for beginners? Is it hosting features? Is it price? Is it customer support?

Again, all of them play a part. But the main factor is it should make you money.

When I say it should make you money, I’m not referring to those MLM web hosting systems. I’m talking about web hosting that has a workable system that practically guarantees your success.

Let me share with you my story, one that some of you may be able to relate to……

Many years back, when I first decided to build a website, my first thought was, well, I’ll choose a cheap web host.

I found one that only cost me $35 a year, including domain name and 1 year hosting. So I got a domain, a hosting service and a step-by-step guide that claimed to teach me how to make money online. I can’t remember what I did with the website, but basically I made $0.00 from that venture.

Finally, I gave up on cheapskate solutions and invested in a “guided web hosting system” that claimed to hold my hands and lead me step-by-step to success. The system costs me $300 a year (I think).

But guess what, when your pocket hurts, you work!

I dedicated months to follow the system to a tee, and started making some money and eventually crossed my first $100 a month in less than a year. (As you can see, it was a slow start, but hey, I was a newbie, remember?)

So which hosting is cheaper, the first one that cost $35 a year, or the second one that cost $300 a year?

Remember in the beginning of this article, I said newbies’ success depends mainly on Right Mindset + Right Action?

The $35 a year hosting gave me a cheap alternative, and left me with a ’see-if-it-works’ mindset and a ’step-by-step-but-up-to-you-to-follow’ action plan.

The $300 a year hosting, on the other hand, gave me a ‘I-must-earn-back-that-money’ mindset and a superbly ‘annoying’ system that forced me to do everything exactly its way. And the result was… I was forced to do the right thing and made money!!

Let me share with you what I mean by ‘annoying’. Imagine when you try to submit a webpage, the system will always slap you with tons of error messages, asking you to correct this and correct that. It’s like your nagging parents who insist that you must do things their way. But over time, you mind is slowly trained to do things ‘its way’ and it becomes your second nature. And guess what, that’s how you learn to do things the right way!

Honestly, I might not have the discipline to learn and do things the right way without this system.

But interestingly, I ditched that system after 2 years.

Why?!

On the second year, I bought a cheap web hosting service with unlimited domain hosting, and started duplicating everything I learned from the “guided web hosting system” on several domains. I wanted to try and see if I could do it without the system. A little to my surprise, I quadrupled my earnings with my new sites. That was when I knew I had indeed internalized the process of building a successful website and I could do it without the help of that nagging and somewhat restrictive system.

So for those of you who are just starting out, I don’t mean you must spend $300 on web hosting, but you should not choose web hosting service simply based on price, support and/or hosting features. What is more important for you is the training. Of course, alternatively, you can learn things on your own or get some other good coaching program. If so, just make sure that you get a web hosting service that is low cost, with 24/7 chat support and more importantly with minimal technical restriction, so that you will not run into problem implementing some third party system in time to come. My favorite is Hostgator.

Lastly, if you want to know what is that “guided web hosting system” I was talking about, it is called SBI. It’s still a strong system until today.

Most free domain hosting services have some kinds of limitation. Some may not support certain scripting, some may not provide database and some may disable cron settings.

Recently, one of our members recommended a totally free domain hosting service. I helped him to set up our List Builder Script on the server and I’m truly impressed with this free domain hosting service.

Here’re what I like about this free domain hosting service:

1) It’s totally ads free.
2) It uses Cpanel website control panel (this is very important!)
3) It provides Awstat traffic stat (a useful tracking tool).
3) It provides unlimited mysql database, pop3 emails.
4) It supports most scripting, including php, cgi, perl etc.

In short, it has almost everything I need for domain hosting. If you are running a small site such as a simple squeeze page or content website, it should be good enough. Moreover, it’s totally free!

Pitfalls Of Using Free Domain Hosting

I recommend this free domain hosting service because of its excellent technical feature, but in general, I discourage beginners from using any free domain hosting because of 2 important reasons:

1) It will greatly reduce your chance of online success

If you ask me what is the most important factor in online success, I’ll tell you it’s your commitment.

Are you TRYING to make some money online or you MUST make money online?

Most beginners are not committed. If you are a newbie and you say you are 100% committed, you are lying. I’m quite sure about that!

Want to know how most beginners become committed? They become committed when their pockets hurt!

I wasn’t committed to personal success until I spent more than $30k attending all kinds of success seminars. I wasn’t committed to online success until I lost $50k in my offline business. I wasn’t committed to building Adsense websites until I subscribed to a monthly membership program.

Free domain hosting does not hurt your pocket at all, thus it will not add any pressure on you or increase your commitment to success in any way.

2) It will slow down your learning speed

Free domain hosting services can only afford to provide email support. This means whenever you have a server issue, you probably have to wait 1-2 hours (or even 12-24 hours) before you can get an answer.

Established hosting services provide instant chat support and/or telephone support. Imagine whenever you face a server issue, just launch a chat window or make a phone call and someone will be attending to your issue.

This is especially important for newbies with limited technical knowledge because they can get instant step by step guidance and ask more questions if they have doubts.

Nevertheless, if you know what you are doing and you’re looking for a totally free domain hosting, what I’ve recommended would be a good one in my opinion.

Update (28 Aug 2009): The site is down for more than 14 days. I tried to contact the admin. Initially they fixed problems and replied my emails. But now they seem to ignore my emails. I’ve given up hope. Another pitfall of using free domain hosting!