A domain name is like an address for your website (similar to the address for a house). It tells people where to go to find your website. The web hosting is more like the land that the house sits on, it’s the ‘physical’ part, the part where the actual data that makes up your website is stored.
There are several types of web hosting plans you can get and many different companies you can buy a web hosting plan from. Most of them are very inexpensive.
For example, you can get unlimited domain name hosting for as little as $10 a month. You may even be able to find other places that are even cheaper and you can also get discounts if you buy long term hosting.
For most people a shared hosting account will handle their needs. This is when thousands of people share one server, each person gets a little bit for their websites.
Think of it like this: there is a big storage facility where you can rent one unit to store all your stuff in. Some of the bigger facilities have hundreds of units but you are only using one small portion, your unit. It’s a similar concept with a shared hosting plan.
You can also get a dedicated hosting plan, this is a better option for bigger sites that get a lot of traffic. A dedicated host means just that, you are the only one using a server, it’s dedicated to you and your sites. This is only needed if you have a huge website that gets a lot of traffic. This option is a lot more expensive than shared hosting, usually costing hundreds of dollars a month.
A hybrid of both dedicated and shared hosting is the VPS hosting. This is a virtual dedicated server where more than one person uses the server. Confusing I know, but think of it as a more expensive (with more options) version of shared hosting and a cheaper (but still with more options than a shared plan) version of dedicated hosting.
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The last form of web hosting is the reseller hosting plan. This is simply a plan where you can sign up for a reseller account and get a dedicated server but instead of using the server all by yourself you can resell space on the servers and you will be the one who gets paid.
With so many options it may get overwhelming to decide which type of domain web hosting will be the best choice for your business. For the most part, starting small with the shared hosting will handle most of the needs for the small to mid size internet business. As you grow and get more traffic (and have more money) a dedicated or VPS site may make more sense. But for now, shared is probably your best option.