Reseller Markup

[Lisa 2]

Hello Everyone ... I am a bit troubled and would like your advice, input, etc.

I am a reseller and charge my clients $20.00 a month more than the hosting company charges me (though it can vary depending on the package, sometimes more). Of course I provide complete support in regard to their account. I am also a web developer so I'm able to bring all of the parts together for them, while helping them understand and take advantage of the technology.

Usually my clients come to me not knowing a lot in regard to web site ownership, so there is a lot of hand-holding, which I don't mind doing. I never offer the fact that I am reselling (and charging them more than I pay) but if a client asks, I do tell them.

First question ... am I somehow being unethical by not offering this information to them ... that I am a reseller?

Second question ... the hosting company charges me approximately $20.00 per month for their basic account and it is this one that I charge $40.00 for ... a 50% markup. Is this excessive?

I had a client that I did not tell I was a reseller. She found out on her own that I was charging her 50% more than it cost me. Of course this was months after we'd started doing business and all she could see is that it only cost me $20.00 and I charged her $40.00. She did not consider all of the personalized support she'd received from me.

Needless to say, it has me bothered, questioning the integrity of my business.

I've considered posting to my web site the established partnership I have with the hosting company. I've also considered charging them the hosting company's rates and requiring them to pay for a year's worth of service in advance (rather than quarterly). If I did this, then they'd have to pay an hourly rate for all support I provided.

If I do the above, it really makes no sense for me to be involved with who they get to host their site. Which in turn means that I'd be opening the door for them to go with any hosting company. As a web site developer, it would be more work for me if every client had a different host, as I'd have to spend some amount of time familiarizing myself with their system. Which means more work for me and more cost for them.

Okay, to sum things up ...

Should I let a client know up front that I am a reseller?
What is the average markup for hosting services that includes fantastic support?

Any and all comments will be appreciated.

Thanks,

Lisa

[jamesglewisf]

I do not think you need to let your customers know that you are a reseller. Most resellers do not. It is not really a moral or ethical question.

I do not think you need to worry about how much your markup is. You are entitled to make however much profit the market will bear. If you can charge that amount and still get customers, then you should continue to charge that amount.

[Lisa 2]

Thank you so much for your response!
I posted this message to a couple of other forums
and it seems the advice/suggestions are the same.

Thank You Thank You Thank You

:)