Voice and data companies can improve ARPU by supplying new products to loyal customers. Research shows that SMEs prefer to buy from existing suppliers, they trust. Until there is sufficient demand to justify investment in support, billing and marketing, the supplier will often partner with a specialist on an introduction and commission basis. Moving from a dealer to a reseller model provides better control and improved margins, however there are challenges along the way;
1. No Reseller Programme
If your supplier only has a dealer programme you will be forced to find a new supplier if you want to become a reseller. This introduces delay and risk and will ultimately put you in competition with your existing supplier. Before you take on a product as a dealer make sure potential partners offer reseller schemes too. Compare their reseller and dealer pricing.
2. Forecasts, targets and contract terms
Existing suppliers may offer reseller schemes but discourage dealers from becoming resellers through unrealistic targets or onerous contract terms. Read the reseller agreement as well as the dealer contract before you sign and ask to speak to one of their partners that has made the transition.
3. Billing
This can be especially problematic for IT companies that want to start reselling fixed, mobile and hosted telephony products. Alongside monthly service charges they will need to process monthly CDRs (Call Data Records), rating each call type and producing itemised bills and variable invoices. It is difficult and risky to try and adapt existing in-house billing systems and purchasing and managing specialist billing software is not always feasible.
There are some good third-party billing products available, however the set-up fees, monthly standing charge and billing percentages mean the reseller often has to take several orders before the margin covers the monthly cost of billing. Some of the more sophisticated suppliers offer white-label billing for their products and will even bill products and services the reseller buys from other suppliers. This can be a cheaper and less risky alternative.
4. Support
Until you reach a critical mass of customers it is not worth recruiting and training additional support staff. For business-critical products that have 24/7 SLAs, technical support is a particular challenge. There are some very good bureau services available however these come with set-up charges and minimum spends. Often they will also charge for calls by the minute and per email on tickets. Incidents happen with any technology and a major outage could cost thousands of pounds. If the supplier of the products offers a white label technical support service then this is the best solution until you can justify hiring your own team. Only the best suppliers will stand by their products by offering a white label technical support product on a fixed-cost basis. They will also help you to train your own support staff when the time is right.
5. Marketing
Launching a new product requires promotional material, proposal content and contracts. It can be very expensive and time consuming to create these. Look for a supplier that offers compelling marketing collateral that you can use.
Jola operates only through channel and we have over 200 partners – both dealers and resellers. We offer connectivity, hosted telephony and mobile products that are best-of-breed, cost effective and reliable. Partners have access to a full suite of marketing, sales and support collateral. Ask us about our white label billing and support options.
