What is a Residential Proxy & How it Works?

What are dedicated residential proxies?

Another common type is dedicated residential proxies; these private proxies deserve their own separate explanation for how common they are, especially in the web scraping world. 

Dedicated residential proxies are gateways that you route your traffic through, just like other types of proxies. The difference is that these specific proxies provide you with IP addresses that are exclusively yours, with no one else accessing them. 

With that, dedicated residential proxies are the way to go if your priority is speed, privacy, and reliability. The only downsides are the price (they can get quite expensive) and the complexity of the setup process, requiring a certain level of technical expertise. In terms of web scraping, dedicated residential proxies are often used to work with complex targets, especially if you weren’t able to retrieve public data with other types of proxies and got blocked by a website. 

Residential vs. datacenter proxies

Another highly common proxy type is datacenter proxies, which are often compared to residential ones. Although they both have the same core functionality – changing your original IP address and routing your traffic through it – they’re quite different in terms of their source, pricing, and other factors. Let’s take a look at the main differences. 

• Sourcing. Unlike residential proxies that have the IP addresses of real people provided by their internet service provider, datacenter proxies come from data centers or cloud hosting services.  

• Pricing. Seeing as residential proxies use real people’s IP addresses, they are more difficult to acquire and upkeep, thus increasing their price. Datacenter proxies are more low-maintenance in that sense, so they’re not as pricey. For example, Oxylabs Residential Proxies Micro plan costs 99 USD/month, while our Datacenter Proxies start at 50 USD/month. Even so, our residential network offers the best in considerably cheap residential proxies, providing premium quality, robust features, and unparalleled stealthiness that datacenter proxies lack when it comes to scraping challenging websites.

• Likelihood of blocks. Residential proxies allow you to simulate organic behavior, so it’s more difficult for websites to detect and block you.

On the other hand, datacenter proxies are artificial, making it easier for websites to determine if someone’s connected to one. However, if they come from legitimate premium providers, blocks from the majority of websites shouldn’t be an issue.

For a more extensive comparison between these two proxies, check out our blog post:

Datacenter Proxies vs. Residential Proxies 

Residential proxies use cases

Residential proxies can be used for the majority of web scraping-related use cases. However, there are specific ones that work better with residential proxies, so let’s take a look at them. 

• Price monitoring – the process of collecting, processing, and analyzing competitors' prices. Businesses monitor pricing data to keep track of the ever-changing market and stay ahead of the competition. With residential proxy networks, you can imitate real-life scraping and gather public data from any e-commerce marketplace while avoiding blocks.

• Ad verification – the process of ensuring that online ads are displayed as intended and in compliance with industry standards. This way, advertisers can gauge if their ads are seen by the right audiences at the right time. Ad verification can be performed on different targets; therefore, it’s often split into such types as Facebook ad verification,  Amazon ad verification, Google ad verification, and so on. Residential proxies are a perfect digital ad verification solution because they provide unique, organic, and diversely geo-located IP addresses for accessing content overseas.  

• Review monitoring – the process of checking what customers talk about the brand all over the internet. It involves monitoring brand mentions, negative reviews, or clients' feedback on multiple review sites. Residential proxies allow you to collect reviews from any location in the world without blocks.

• Anti-phishing – this use case involves identifying and analyzing potentially malicious websites that mimic legitimate sites to steal sensitive information. With their global coverage, almost 100% uptime, and superior performance, residential proxies help to imitate real user behavior and protect businesses around the clock.

• Real-time product monitoring – the foundation of competitive intelligence for large and small e-commerce businesses. Residential proxies help in this use case by ensuring a continuous, uninterrupted flow of real-time product data, even on websites with sophisticated anti-scraping mechanisms.

• MAP (Minimum Advertised Price) monitoring – the process of tracking product prices worldwide and ensuring MAP policy compliance. Residential proxy services allow you to access various e-commerce platforms from multiple geographic locations to detect MAP violations and protect brand integrity.

Are residential proxies legal? 

When it comes to residential proxies, the question that comes up all the time is, “Are they legal?” Given the fact that residential proxies use real people’s IP addresses, it’s only natural that the legality of it is questioned. 

Truthfully, there isn’t a single straightforward way to answer this question. First of all – this goes without saying – you shouldn’t be using a residential proxy server for any illegal activities (e.g., scraping copyrighted data). We always advise you to seek out legal advice from a professional about your specific case. This way, you’ll be certain you aren’t breaching any laws. 

Secondly, it’s important to choose a legitimate residential proxy provider that is transparent about how they source their IPs – you have to be sure they come from legitimate sources. 

For example, scrapers often use residential proxies to make it harder for websites to block them. It’s legal to use a residential proxy to scrape websites that are publicly available but illegal to scrape content from private websites.

For more details, head over to our blog post “Is Web Scraping Legal?” where we have this topic covered. 

Choosing an ethical provider is crucial 

Another crucial factor to take into consideration is how the residential proxies are sourced and whether the provider is transparent about it. At the very least, it’s essential that the proxy provider acquires documented and explicit consent granted by fully aware users and, if possible, rewards proxy network participants.

Oxylabs has ethical and transparency standards regarding residential proxy acquisition. We have a dedicated blog post on this very topic:

Oxylabs Sets Clear Standards for Residential Proxy Acquisition

The proxy market is missing clarity and standards when it comes to the residential proxy procurement process. Oxylabs, as a strong advocate of ethical business practices, operating strictly within the capacities of established legitimate proxy pools, accepts the responsibility to bring order to the chaotic industry.

Final word 

Although expensive, coming from legitimate, premium providers, residential proxies make perfect tools for acquiring public data from difficult targets and avoiding blocks. 

However, it doesn’t necessarily mean that you can only use this specific type if you scrape public data from complex websites. If you’re unsure which proxy type to choose, feel free to reach out at support@oxylabs.io or check our article on ISP proxies vs. Residential Proxies.

You can also easily get proxy server on our dashboard or request a free trial - here’s more information on it. There is also an option to try out our 5 free proxies!