Virtual ISP (VISP)

Searching the web you will find dozens of Virtual ISPs (VISPs) who would like you to resell their service. The most common scenario is that, for a monthly fee, you get a certain number of accounts that you can sell along with some disk space to divide among your clients. Another method is that the ISP gives you a discount on their fees, then you charge your customers a higher rate.

At first this seems like a pretty good idea. Virtual ISPs will try to convince you that this is the best way to go. They will probably paint an overly dramatic picture of the headaches you will have without their help. However, you will realize that using a Virtual ISP has drawbacks that will severely limit your growth and will not result in anywhere near the profits of owning your own ISP. If you think about it, they are asking you to become their sales agent without pay, office, benefits, nor management - a free employee.

It seems like you are getting free use of their equipment to build a customer base, but what happens if you ever have a “falling out” with the VISP? Perhaps the VISP raises their rates too high, or decides to stop providing service in your area. What would happen to your customers?

Perhaps you are considering starting as a Virtual ISP and then purchasing your own equipment later. The same situation exists if you ever decide to change to another VISP. Your customers have their computers programmed to access the Virtual ISP, so how do you make such a change? If you have a thousand customers and it takes an average of twenty minutes per customer to guide them through changing their settings to a new VISP, that is 332 man-hours of work. Perhaps it will take 30 or 40 minutes per customer. And in any major change in business, you are certain to lose some percentage of your customers in the process.

Operating your ISP through a VISP means that a significant number of factors which directly influence the success of your ISP business will be completely out of your control. You will be depending on the Virtual ISP to respond to your needs and problems as your customers make requests of you. If a subscriber calls and says, “I can't log in” or “I am having trouble getting my mail” (two of the most common problems), what do you do?

• If the servers are under your control, you can determine the source of the problem quickly, often times in less than a minute.
• If you have to call a Virtual ISP, you will probably spend 30 minutes or more on the phone trying to accomplish what could have been done in under a minute.

The situation is similar for domain hosting, account changes, and numerous other day-to-day tasks.

Virtual ISPs obviously make a profit on the services they wish to sell you. Owning your equipment puts that profit in your bank account instead of theirs.

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