Webhosts as a Source of "Paper"?

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Posted by ahlexis on April 22, 2004 at 22:15:34:

Hi there! I've got a question for you. This is a what-if that just popped up in my mind.

To explain it better, let me provide some background info:

From time to time I watch eBay's web hosting section. I see a lot of people selling reseller accounts that allow those who buy them to be set up to have a master login account with many domains under them. You can either use it all yourself or sell off each account under you. Basically selling one account per domain under each reseller account.

One day I noticed someone selling off master accounts that had anywhere from 35 to 150 customers whose sites the seller had built and was now hosting them through his reseller accounts. He decided the billing of so many clients was a nightmare, so whoever won the auction would get the master account login ID and control of the 35 (or more, depending on which auction) accounts under that reseller and would also receive the income from those accounts. Each customer was paying $9.95 per month for their web hosting. Each customer had been paying for at least a year prior to this decision. I think the auctions closed at around $300 to $750, depending on the number of accounts. This guy had more than one reseller/master account, and one by one he put them up for bid.

Where I'm going with this is:

Is it possible (feasible) to create a note secured by the customers paying the $9.95 per month? Or maybe secured by the master reseller account? Or hypothecate, with the understanding that if a customer cancels then that account would be replaced with another account to make up for the one that's gone?

The concept as I see it is this:

I contact web hosts and let them know that if they decide to get out of their hosting/billing of their clients that instead of selling the whole account, maybe they might just sell off X number of payments for CASH NOW. Or maybe I let them know that I buy the accounts on a regular basis.

Of course there would be limitations and restrictions, but this was just something that just "popped up" into my head. Definitely a niche business not for everyone (but then again, that's probably where the high yields are).

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