There are some key steps to establishing yourself in the Web Hosting realm. My experiences began more than ten years ago with a really good high school friend who I still keep in touch with regularly. Back then I expected very little to come from hosting a few of our friend’s websites. Getting our feet wet on our own dime, which was everything we had back then, was an exceptional way to learn the ins and outs of business development, technical sales, reseller website hosting, and vendor interaction. Here’s the standard growth line for Web Hosting companies that start by word-of-mouth
- Making a few websites for friends
- Hosting on popular sites like godadddy.com
- Eventually purchasing a reseller plan so you can host yourself
- Working up to a full featured web hosting service
- Integrating WHMCS
- Accepting Credit Cards with a Merchant
- Automating Everything
- Purchasing clients from other hosting companies to initialize growth
- Upgrading to a VPS or even a Dedicated Server, depending on your interests
- Offering advanced hosting services such as replication and fully managed backup solutions
- Finally making your first profitable dollar
It’s not easy. There’s a lot that has to come together. I’m beginning to ramble, so I’ll get down to the topic on hand. One of my big downfalls when I was younger was dealing with the CC Merchants. There are lots of options and things to think about, but it’s important to know some of the key differences between the offerings. As a standard web host, you’ll find the biggest difference to be the pricing. Outside of the pricing, the number one difference is defining your Merchant Gateways from Third Party Gateways. If you use WHMCS, this is very, very important.
Merchant Gateways and Why You Want Them
You’ll find the list of all Payment Gateways here: http://docs.whmcs.com/Payment_Gateways
Merchant Gateways are the Gateways Modules that you can integrate into WHMCS payment forms directly. When the potential customer reaches the part of the form where it’s time fork over some dough, they simply choose their method, fill out the fields, and continue on seamlessly. This is the standard expectation for the customer and you should make your choices from the list of Merchant Gateways with this in mind.
Why To Avoid Third Party Vendors
It’s not that the third party merchants don’t work. In fact, they function just as well as Merchant Gateways. The problem lies in the psyche of the potential customer. With friends and word of mouth sales, you can hold the hand of a customer through hell and back. They’ll blindly follow you though the complicated process of getting your website up and running. But you can’t be there every purchase when you get bigger. You want customers to have 0 issues when setting up their account, and the CC form is the part where your customer reaches the old bridge with a roaring river underneath it. They’ll be really, really weary before taking that next step. So,when you decide to go with a Third Party Merchant and all of a sudden your customer is leaving your site to go to a random site with an unfamiliar name it can be very tough for them to mentally commit to the trustworthiness of this new area they didn’t expect to be taken to.
Merchants are to blame, honestly. If they marketed themselves to the general consumer a bit more you wouldn’t have a fear of losing your customer at the CC Form stage. I’m certainly not concerned with my customers jumping out of my site and heading to PayPal. They know PayPal, they are comfortable with PayPal, and they’ll gladly enter their information and head right back to your site. The same cannot be said for companies like CC Avenue or CashU. And while these companies are held to the utmost of standards and require you to be fully compliant as well, it can sometimes be impossible to translate that sense of security to someone unfamiliar with how the hosting game is played.
Stick with Merchant Gatways. Avoid Third Party Merchants.