Custom/Private DNS Servers and their Importance to a Reseller
The term “custom DNS server” or "private DNS server" refers to the DNS servers that a reseller is using to provide DNS services to his customers. The customer has to have his domain registration point to the DNS servers of a web host where his website is hosted so that visitors can find it. As a reseller a web host does not have his own infrastructure. He is leasing the infrastructure from the actual web host. It looks bad from a business standpoint to a customer if he signs up with (Reseller) web host X-Hosting.com, but the DNS servers he would have to use belong to Super-host.com.
As a hosting reseller you do not want your customers to know that you are reselling them web hosting from a somebody else. The concern is that the clients would bypass you and buy web hosting directly from the source to save money. In order to keep your actual infrastructure anonymous you need to remove any connections between you and the real hosting company you are using to provide your services. Custom DNS servers are used so that a customer uses ns1.YourDomainName.com and ns2.YourDomainName.com for the DNS setting of their domain and not the names of the DNS servers that your host provided you with. This step will make it very difficult for a client to identify you as a reseller.
Custom DNS servers are also an important piece when it comes to moving off a reseller account to your own server hardware. Instead of forcing all your customers to change their domain DNS servers you can instead just change the IP addresses used with your custom DNS servers to point to the new IP addresses on your server. Do not do this to move your customers websites secretly – which you technically could. A move should always be communicated. If you plan a move by changing your DNS Server IP addresses, communicate this to the customers. The nice thing then is, that you can pretty much a large number of user accounts and website very fast, very quick.
Resellers should use custom DNS servers as an additional step to brand their services and to hide the fact that they are buying hosting from a larger company. If a reseller web host (a host selling hosting to resellers) does not offer custom DNS servers, a reseller should look somewhere else to buy his hosting from. Nowadays there is no reason why a reseller should not get his own custom DNS servers assigned.