Internet bandwidth is getting cheaper and faster and as a result, revenues from business cloud products are growing quicker than ever before.
Most voice resellers and IT support companies that were not already selling connectivity, cloud voice and mobile SIMs are now actively looking into it, either to protect their customer bases or to add valuable recurring revenues and margins.
Unless you intend to build your own network and switches you will probably need to select a supply partner. This subject has been well covered in previous blogs so we need make no further comment here.
This article is about how you engage with your chosen supplier(s).
Dealer or reseller?
The most common question we get as we recruit new partners is if they should become a dealer or a reseller. This is not as straightforward to answer as it may seem. In general terms a reseller has the contract with the end customer and they bill and support them directly. A dealer often sells the solution to their customer but the billing and support will be done by the supplier who will often then pay the dealer a commission. The decision to go dealer or reseller can differ between products and contract terms so the first thing to say is make sure you pick a supplier that offers both schemes with options to transition between them. Here are a few more things to consider;
Support
How easy is the product to support with your existing capability and what level of support is required? If you are already selling phone systems, the technical staff you have may be easily re-trained to support hosted voice - if you have spare capacity. If your staff are providing desktop and LAN support this may be more difficult and you may choose to start on a dealer basis until you have a critical mass of customers sufficient to justify hiring more staff. SLAs on leased lines are usually 24/7 so even if your customers operate mainly in working hours you may be leaving yourself vulnerable if you operate business hours and support them yourself. Some suppliers proactively monitor connections and will bring circuits back-up out of hours without you even needing to get involved. Whatever your decision on support, remember that you don’t own the infrastructure and so the quality of 2nd and 3rd line support offered by your supplier is critical.
Contract term
Most telephone lines and broadband are sold on monthly or annual contracts and this is usually the limit of your liability to a supplier if your customer cannot or will not pay. Leased lines have higher monthly rentals and are usually on 36-month terms. These pose more of a credit risk to your business and you may choose to put them on dealer contracts. At Jola it is common for partners to be dealers for some products and resellers for others.
Billing
Products with only a fixed monthly service charge are relatively easy to bill even if you don’t use your own billing system or a third-party service. Those products that have variable charges like calls, overages or bolt-ons can be harder to bill without a system specifically designed for the purpose. Call Data Records (CDRs) can run to many thousands of lines and trying to bill these with a markup on a spreadsheet can be a real headache especially when you take into account part-months and previous period charges. If you are intent on selling these products on a reseller basis and you don’t have a billing system you should probably budget around 2.5% of the monthly revenue to have a third-party do it for you.
Trust
This is not just about if your supplier has a direct salesforce or a reputation for flip-flopping between channel and direct. When you first start with a product you will need considerable support from them; on the phone, email and often directly involved with you and your customers. How good is your supplier at presenting their own products and can you imagine them sat with you (or even on their own) in front of your customers? Remember that your choice of supplier reflects upon you. If you opt for a dealer scheme your customers will definitely be exposed to your supplier’s capabilities. The worst case scenario is that they don’t only damage your ability to upsell new products but that they also diminish your standing with customers and put your core business at risk.
Jola sells only through our UK network of channel partners and we offer both dealer and reseller schemes. Quoting, proposals and ordering are completely automated and we provide office and field-based sales and technical support. To find out more…
