If you have any experience with reselling mobility to end-customers or are curious about what it takes, this is for you. You understand the frustration and pain when competing against the Verizon and AT&Ts of the world. You know you have better support and customer service, but you still find yourself losing business to the big guys. It’s the nature of being in this reseller space, and as a company that has found success as a Value-Added Reseller (VAR), mobility is an especially tricky area to work in, but not impossible.
At Altaworx, we’ve worked through the ins-and-outs to make our mobility offering profitable while still competing on price with the major carriers. We want more resellers to enter this space, so we’ll share how we were able to make this happen below.
What an Unlimited Plan is…and What it is Not
As a reseller, you understand that competing in the ‘unlimited data plan’ business is not a sustainable and scalable business model because truly unlimited plans do not exist. If you look at the fine print, speeds can slow or be throttled after a certain data allocation is used and if you reach the max end of your ‘unlimited’ plan you end up losing money. But what if I told you that most people will never reach the amount of data needed to utilize a truly unlimited plan? Tier 1 Carriers understand this and use this to their advantage. They sell an $80 unlimited plan to a consumer which throttles after 50Gbs, but research shows that the average consumer utilizes 15-20Gbs of cellular data per billing cycle.
The same argument can be said for business phones. As a reseller, this opens the door for you. Educate your customers and sell them a set data plan based on their needs, you can hedge and choose not to charge for overages or have a set overage amount listed. On the backend, you can get more competitive with your pricing by utilizing pooled plans from the carrier/service provider. Essentially you have a set amount of data across all your lines and as long as total usage does not go over your data allotment, you will make money, and in fact, your costs could be driven down.
Driving Your Costs Down
If you decide to move towards the path of reselling mobility, you need to figure out how to continue to drive your prices down. One way of doing this is by manually running on a spreadsheet and manually changing your rate plans in your carrier portal to get you the best rate every month. Can it be tiresome and somewhat error-prone? Of course, but the alternative would be throwing money down the drain, so the pain of doing it is well worth it.
Another option would be to take on large commits from multiple tier 1 carriers and bet on yourself. This will give you a better starting point but also can put unnecessary pressure on your new venture, you could be upside down before you know it and fail before you get started.
Finally, you could work with someone like Altaworx, who has agreements with all the major carriers and wants to see you grow. (Shameless plug, I know). Will our prices be a little higher? Well that really all depends on volume, number of sims, and scalability. If you want to learn more about this path, click here.
Portals, Portals, and More Portals
One thing about mobility, especially if you work with multiple carriers, is the amount of portals you have to manage. With some carriers you are having to use 3 separate portals to manage one sim. On top of that, each portal has different rules or engagement. For instance, deactivated’ in one portal could equal ‘suspended’ in another. If you want to truly compete, this is the reality you will be walking into.
Billing Your Customers
Another huge time suck is billing your end customers accurately and timely. The method Altaworx utilized when we started out was a good old spreadsheet, going line by line and matching data used to data purchased by an end customer, and charging overage where needed. Then we would upload this into our billing system (Rev.io) and push all these charges at once. Again, opening another opportunity for human error. But that was what we had available to us at the time, we’ve since streamlined this exponentially which I will talk about later.
Tax and Compliance
For newly minted resellers, there is a real liability in how you tax your end customer and staying compliant with the FCC. Getting started with a tax engine and a trusted billing system are a need, but are extremely expensive on the front-end, ranging from $50K on the low end to $200k on the high end. If you truly want to be the carrier of record and grow this must be done. Of course, the states you choose to sell in and the risk you want to take will also affect this price, but it’s not a risk I would advise you to take.
Now What?
I’ve thrown a lot of problems and pain your way, but did you think I would leave you hanging? Of course not, what kind of VAR would we be if I did that?! The simple answer…work with someone like Altaworx, we have an incubator reseller program that lowers the barrier to entry. We work with and maintain all the tier 1 carrier relationships, so you don’t have to. And the biggest incentive, we created and utilize AMOP, our platform that combines all other mobility and IoT portals into one. With revenue assurance, reporting, billing, alerts, notifications it is the hub that will make your spoke role.
If you already have your relationship with carriers but are still swiveling chairing between portals, you can still get AMOP. Altaworx didn’t want to gatekeep this secret, so buy from us, or don’t, we still want to see you grow.
If you want to learn more go ahead a schedule a meeting with one of our resident experts. Believe it or not, this article is just scratching the surface.