This is a very discussed questions as I see time and time again so I decided to create a complete thread explaining both sides.
of course i may always miss something so if I did post below and I will to thread with your name. other than state your opinion below.
I will make this as short as possible so lets get started.
Why choose Re-seller:
> Reseller is alot cheaper than Dedicated or VPS which could massively effect how you start off your hosting company. Starting a hosting company requires advertisement for a real good boost which is where those $ that you saved up come in to play.
> Reseller means you are not required to have any past experience as its all managed by your reseller provider and they will take care of all maintenance/upkeep.
> Resellers usually include many other features and services which come with the plan such as 24/7 support for questions that you do not know how to answer to your customers, very powerful servers which are not affordable for a startup, Daily backup and you can usually get help for questions you may have during set up.
> can be paid for even with no customers for a good amount of time before getting customers.
Why choose VPS/Dedicated:
> sell your own VPS.
> dont be dictated on what your customers can host and what they can not host (still a bit limited by VPS/Dedicated provider)
> provide your customers with features you want them to have.
> Gain more experience
> set your own limits on emails sending.
> Offer first month for free. (not allowed by Reseller)
Licenses
With Reseller you do not have to pay for Cpanel/WHM or any other admin panel except WHMCS, While you are required to pay for all of this with a VPS/Dedicated. In addition if you went down the VPS/Dedicated route you will have other Licenses or services such as daily backup, firewalls, DDOS protection to pay for which could cost a considerable amount every month.
Over all in regards to licenses the clear winner is Reseller as its cheaper.
Upkeep costs
Keeping a VPS/Dedicated up for enough time before getting enough customers to pay for the upkeep could be very expensive which is why low budget starters are not recommended to go down the VPS/Dedicated path.
Up keep of Reseller is very cheap and can be afforded by almost anyone as there are not may lincenses to pay for and in general is a lot cheaper.
Selling VPS
Selling VPS is one of the main factors which puts of reseller customers. Selling VPS can make a lot of profit however also getting VPS customers could be a difficult thing for startups.
with VPS/dedicated you can sell your own VPS and take all of the profit from it while with Reseller you sell your reseller provider's VPS for any price you want and they give you x amount of discount.
is selling VPS profitable? yes
will be worth paying for VPS/Dedicated? yes and no. yes if you have the money, no if you dont have the money. you can alwasy start your own VPS selling later when you started to make profit from your reseller and have gain some reputation.
Skills/ Experience
Very little skills/ Experience is required with a reseller which means almost anyone can start off their own hosting company using reseller and if they cant answer any questions most hosting providers including us provide help so that they can answer their customer's questions.
however if you do not have enough experience/skills , going down the VPS/Dedicated path is the wrong thing to do as it could cause massive issues, bugs, loss of data and down time.
@VirtuBox helped with this section.
Profit
profit is the main factor on everyones mind when choosing. Well this all comes down to how many customers you can reach and how long you would be able to pay the monthly costs with no customers.
if you can reach a good conversion rate with hundreds of customers then VPS/Dedicated will have very little loss for you (also depends on your prices.).
However due to the competitiveness of the market you may not be able to reach enough customers in less than x amount of months (depends on server cost) before starting to make profit.
So to break this down:
> Reseller makes profit in much shorter time
> VPS/dedicated makes profit in longer time however makes more profit from VPS sales.
Source: Reseller VS VPS/Dedicated (Explained)
