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Telecommunications Reselling: What You Need to Know to Get Started

Telecommunications Reselling:  What You Need to Know to Get Started
14
Sep

Maybe you’ve seen the advertisements to be a telecommunications reseller.

Or maybe you want to start your own business in tech but don’t want the hassle of building back office and client support.  Not to mention having to produce and handle inventory and product.

There is no industry like the mobile industry where you can be your own boss and build a brand and business without having to manage people or inventory.

Terminology

There is a number of different types of resellers and reselling. It’s important to understand the differences. So, let’s start with some basic terms.

Mobile Network Operator (MNO) – The Network Operator is the service provider who maintains infrastructure for telecommunications, such as towers, devices, and services. These companies own or control the licenses issued from a regulatory or governmental entity.

Distributor – A Distributor has a direct relationship with the manufacturer of devices and service providers. They contract with the manufacturer to maintain inventory where retailers and resellers can purchase without having contract requirements.

Retailer – A Retailer is a business designed to sell directly to the end-consumer. Retailers may or may not have a relationship with the Operator.  They typically get inventory from distributors so do not carry heavy loads of inventory.

Reseller – Unlike a Retailer, a Reseller is further up the supply chain. The reseller earns commissions while selling either for a Master Agent or an Operator. While a distributor holds the inventory, a reseller holds the client relationships. Resellers are particularly important in Business-to-Business (B2B) relationships.

Master Agent – A Master Agent is a company who is contracted directly with the service provider and resellers. Master Agents provide back office support, training, and deployment services that would not be provided by an Operator. Similarly, Master Agents easily make the quota required by service operators while a sole reseller may have difficulties making the minimum.

White Label Business – White Label businesses are marketed and branded as the reseller though the services are still provided by the Master Agent and Operator. A client interacting with a White Label business will only see their brand, despite services being provided by others upstream in telecommunications.

Different types of resellers

So that is the basic terminology when discussing supply chain of telecommunications. However, you need to consider additional breakdowns if you are interested in being a reseller.

A Pass-through Reseller is the first type. These individuals are agents for either a Master Agent or Operator.  Agents cannot mark up or add anything to the service, equipment, or device they are reselling. The money made as a Pass-through Reseller is on commissions.

A Value-added Reseller is the second type of reseller. These individuals cannot mark up the product or services received from the Operator. However, unlike the Pass-through Reseller, these agents offer an additional product combined with the Operators product. Most consumers are familiar with the “bundle deals” these represent. An Operator may contract with a company or individual to sell their services, and the individual can add their own products in a discount deal. Markup cannot occur on the Operator’s product, and any taxes or fees can only be assessed on the company’s own portion they are bringing to the bundle.

A Value-added Distributor is the third type of reseller. The difference between the Value-added Reseller and Distributor comes down to commitments of volume sold for commission.

All three types of resellers can be White Label businesses.

Being a telecommunications reseller

There is a huge benefit to being a reseller. Namely, you don’t have to maintain any overhead in your business. Also, you get to earn money without having to invest in inventory. But despite the positives of being a reseller, there are some things you need to decide.

What type of reseller should I be?

Given there are three types, you need to focus on what you bring to the table. Value-added reselling requires product. Similarly, value-added distributing requires quotas.

Should I start my own White Label business?

There are pros and cons to marketing and branding reselling under your own business. Since a reseller is the direct client contact, having your own brand gives more credence to your clients. This allows you to be part of whatever future decisions your client makes, rather than handing them off to another company to manage.

The downside of a White Label business is you don’t have complete control. If any of the upstream providers run into difficulties, it’s your company’s reputation that will suffer.

Should I work with a Master Agent?

While some question why a reseller wouldn’t go directly to the source for their clients, Master Agents offer support and consistency where large operators do not. Master Agents will order, track, train, and deploy the services to your clients. Also, Master Agents track commission and ensure accurate payment from the Operators.

As the industry consolidates, more Operators are requiring Master Agents as the intermediary. Partnering with a Master Agent allows a Reseller to focus on the client relationship rather than back office technicalities.

Which Operator should I represent?

While some Resellers and Master Agents work for one Operator, there is the ability to contract to multiple Operators. Doing your research on Master Agents can assist with this decision.  Choosing a Master Agent who works with multiple Operators allows you to do what’s in the best interest of your clients.

Getting Started

Finally, you have decided you want to give telecommunications a try, and reselling is the best option for you. After all, no inventory to carry and no overhead. And if you are great at relationship building, you can focus entirely on your strength and not worry about the logistics of telecommunications.

Once you answer the questions above, getting started comes down to just doing it. There is unlimited potential for those who are ready and willing to be part of the telecommunications supply chain.