Reselling web and application hosting provides a great opportunity for web designers and developers to add value to their core services and generate a regular, recurring revenue stream. When doing so, however, it is vital that you understand the cost base associated with providing these value-adding services and have a clear model of how you charge this to the client to ensure that you turn a profit.

The last things you need are hidden extras that you may not be able to pass on to the client. Worse still, having to go back and re-quote on a job is not only potentially damaging to your cash flow, but could damage your reputation and ultimately your livelihood.

In the UK, web designers and developers are fortunate enough to have a plethora of hosting providers to partner with, offering every conceivable hosting feature at price points that suit every pocket. However, shopping around for web hosting can be confusing and it’s very difficult to compare apples with apples. Hosting companies are also increasingly offering special ‘one time, never to be repeated’ offers, extra features, seasonal discounts and all manner of free gifts to entice new users.

The hosting industry has now become so commodified that providers are pouring millions of pounds into advertising their services, just to be able to compete in an overcrowded market. The pressure to compete is forcing providers to constantly add more features and reduce the price.

You should also be aware of the fact that none of the UK’s business hosting providers operate as non-profit organisations – money has to be made somewhere. This needs to be carefully considered when choosing a provider for your business, especially given that they will provide a critical service to your customers. Thus you run the risk of selecting the wrong partner, which could have a negative impact on your relationship with them.

Even when you think you have found the best hosting deal for your needs, there will be a seemingly better one. To ensure that your business doesn’t make the wrong choice of provider, it is vital that before you make a decision, you consider which features actually have real value for you. What represents more value for your business? Having enormous amounts of storage space at your disposal or having a more realistic amount of space that includes a full data backup? Another key consideration is the security of data – particularly client data – or in terms of hosting, a firewall to prevent intrusion and backup to recover data in case of failure. The costs for this should be factored in when comparing deals. Is it included in the price or is it extra? You will need it, so factoring these costs up front will give you a more realistic starting point before you come to comparing the various components and features that comprise the server itself.

In addition to hidden charges, for what are actually essential features you also need to look more closely at the special offers. Sometimes they are underpinned by minimum contract terms, minimum spends and inflated setup fees. What looks like a good deal on a first glance may be less than competitive once the small print has been read in detail.

Let’s look at a practical example of how this might work. You are shopping for a dedicated server to host your clients’ websites and decide upon a great deal, which has a super-fast processor, huge storage capacity and absolutely tons of RAM, all for a bargain price. Subsequently, you have an outage on the server and need to recover data to restore your clients’ sites. After calling your provider, you are told, “You don’t appear to have purchased our backup service”. This leaves you with a great big, empty hard drive and no client data. While saving £100 per month initially sounded like a great deal, in the long-term it might not prove to be such a wise saving.

Bandwidth, or data transfer, is the other common offender when it comes to surprise additions to hosting bills. A common way of billing for data transfer is to include a fixed allowance in gigabytes, which can be transferred every month. Extra data transfer is charged per megabyte or gigabyte. The risk in this scenario is that should you have an increase in traffic, perhaps caused by an advertising campaign, popular viral or a malicious attack on your server, you can very quickly use up your included allowance and start accumulating huge charges for excess transfer.

Usually, these charges will go unnoticed until they are automatically billed to you at the end of the month. In extreme cases this can mean hosting costs can, and do, run into thousands of pounds. Some providers offer a fixed connection to the internet, which runs at a designated speed in Mbps. This prevents this problem from happening, however, the included connection generally doesn’t offer sufficient capacity for larger sites and might need upgrading at an additional cost, as site traffic increases or the website develops and becomes more complex.

In short, fierce competition has meant that web designers and developers in the UK are served by many highly competent, reputable and established providers offering solutions at great prices. To ensure you get the best deal and no nasty surprises, make your shopping list of features first and always read the small print.