Guest Post: The Beginner's Guide to Breaking into Wholesale VoIP

Posted by Jason Tapolci on March 19, 2013 at 7:30 AM
Jason Tapolci

*Our Guest Post this week comes from Rachel Greenberg who writes about residential and business VoIP solutions for VoIP Review.

So you’re interested in wholesale VoIP, but you still have a few questions before you buy?

VoIP Review LogoWholesale VoIP is an investment, and a good one. Wholesale is a great way to break into the tech industry to provide phone service to small businesses, VoIP distributors, and individuals. But in case you are teetering on the fence about the decision, you might want to ask these questions before you buy.

1. What are all of the components I will need to have a successful wholesale VoIP service?

In order to act as a successful VoIP wholesale agent, you will need to be sure that you are capable of offering:

  • Origination and termination services
  • Colocation and PBX (Public Branch Exchange) hosting
  • International A-Z
  • E911 and 411 access
  • IP faxing capabilities
  • Control panels for easy customer management

Origination and termination refer to your ability to interact with the PSTN. Without origination and termination services, your wholesale operation would be unable to interact with traffic from analog telephone service providers, which would prevent you from delivering or receiving phone calls from all of those customers who still use copper wireline service. This would be detrimental to your business as you would not be able to meet many of your customer’s calling needs.

Colocation refers to your ability to house and maintain the proper hardware associated with a VoIP wholesale operation. As a colocated wholesale system, you can offer customers hosted service. Likewise, if you offer PBX functionality, you can support and operate PBX services for your business customer base.

International A-Z is termination and origination for international calls, another necessity for any telecom operation.

Legally, you are required to support E911 access and 411 access to ensure that your customers are connected during emergencies, and that they can reach information services.

Control panels ensure that customers have an easy means of programming, controlling, and accessing their own phone service, so that they can easily reconfigure extensions, change voicemail settings, etc. And IP faxing support is another necessity for any wholesaler who supports businesses. Customers will need to be able to send and receive faxes, so you will need to be able to support those with the correct IP connectivity.

2. Where will I find my customer base?

The most important step in finding your customer base is in figuring out where your services are most needed. You may be interested in becoming a wholesaler because you have noticed an area where phone connectivity is lacking, and you are hoping to fill in the gaps, but if you are unsure of where to start, there are lots of ways you can find out where your services would be most valuable.

As a wholesaler, you will likely sell VoIP connectivity to a wide variety of customers. Mostly, you will probably sell and buy connectivity with other telecom providers. You may end up filling a very important niche in your area’s telecom structure if you can find out where lots of providers would like to get better rates or more services.

You may also find that you would benefit from offering phone service for business, residential, and enterprise customers. For some, this can be a great source of business, and for others, it may be a good way to supplement your business.

3. How should I market my wholesale VoIP services?

That all depends on who you’re marketing to. However, once you’ve determined who your customer base will be, you can figure out how to market your services. For example, if you are selling mostly to other providers, you should take a more technical take on your advertising.

However, if you are more interested in providing for business, residential, or enterprise customers, you may be able to figure out that there is an untapped market in your area. For example, maybe you have noticed that the local school system is using an outdated intercom and phone system. If you can convert that school into a VoIP system, you may figure out an excellent approach to helping local schools, daycares, and other community centers improve their telecom services.

For more information, check out this great blog on the subject of choosing your market.

4. Which VoIP services should I sell?

Again, that all depends on who you are trying to sell to. There are a few basics that are generally universal. For example, most wholesalers will probably want to support IP faxing and hosted PBX service because those services represent a large portion of customer demand. However, the amount you focus on each sales item should be proportional to local demand.

For example, if you end up supporting lots of other providers, you will want a very high amount of available origination and termination services. If you end up supporting lots of residential VoIP customers, you might not want to focus as heavily on PBX support. Check out part two of the aforementioned blog on how to choose your services to sell.

5. How do I decide what rates to charge?

Your rates should be set appropriately for your market area such that you can charge a low enough rate to be competitive as a service provider, but still make a profit. Become well-versed in the rates of local providers, as well as the rates of national providers to best determine what will make you stand out against the other providers in your area. This may be the particular features that you offer, or the low monthly rates you advertise, or the right blend of local and and national advertising.

According to Bran Sugars in Entrepreneur magazine, to figure out your rates, you should line up your expenses, your overhead, next to your sources of income, and see how much you can reasonably charge to make up expenses. According to Sugars, a high profit margin would be in the 75 to 85% range.

Sugars makes the innovative suggestion that business owners observe other businesses and try and learn from the ways other types of companies charge for their services. And maybe even more interesting and counterintuitive was his suggestion that new business owners should not be tempted to offer large discounts to gain clients. Instead, he says, you should focus on making sure your business stands out of the crowd.

Tags: Guest Post, Entrepreneurship

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