Wholesale Billing – the benefits of customer ownership

By Rob Foster

Over the last 4 to 5 years, we’ve seen some significant shifts in the mobile arena. An increasing number of mobile dealers are moving to a wholesale model, and increasing numbers of fixed, data and IT partners are integrating mobile into their portfolio when previously they would have never considered it.

But, despite these positive changes, there are still large amounts of reseller partners who are concerned about taking that step into a complete wholesale offering. But they really shouldn’t be.

Most partners are happy to offer fixed, data, M2M and hosted telephony solutions on a wholesale model as there’s a perception that it costs them very little to supply these products to customers. There is some truth in that perception, but it’s really driven by the customers’ expectation of those products. For example, customers don’t think twice about entering into a lease agreement for fixed line equipment, or they set aside budgets to pay for PBX/hosted upgrades which covers the cost of equipment/installation charges. But in mobile, however, there’s still an expectation that mobile hardware comes free of charge as part of the contract which is perceived to come at a cost to the reseller.

But in reality, that’s simply not the case. We all know that hardware isn’t free of charge – it’s just a matter of learning how the cost can be built into the tariff. Or the customer could benefit from a lower bill if they take a SIM only plan with no new hardware.

With this in mind, wholesale partners are beginning to re-educate customers and look how they can structure deals differently so it doesn’t impact their cashflow. And the good news is it’s working! Whether they’re offering a quarterly/monthly rebate against a customer’s spend which can be used as a tech fund, or they’re selling the benefits of leasing to a customer to get a better overall deal, they’re winning business. And the margins are still the same – the magic is in the way the deal is constructed and explained to the customer.

But the biggest factor that a partner should consider when thinking about wholesale is Value. Billing your own customers increases your multiples by at least 3-fold, and the more products you bill on a wholesale basis, the more value you add to your business.

If you’re interested in wholesale billing but are still unsure about taking the leap, give the Zest4 team a call. We’ll be happy to share best practice and provide you with all the training, support and products you need to succeed. Call us on 0161 956 3355.