As an IT reseller, adding voice communications to your portfolio can open up valuable new revenue streams, foster long-term customer relationships, and keep your offerings competitive in a rapidly evolving market. The demand for voice communication solutions has surged, with the global UCaaS (Unified Communications as a Service) market projected to grow at a CAGR of over 10% from 2023 to 2030. In fact, 74% of businesses report that voice communication remains a critical component of their digital transformation strategy, especially in today’s remote and hybrid work environments. This expansion is timely and profitable, positioning voice services as essential for business continuity and productivity.
One of the most important decisions in entering this space is selecting a vendor that aligns with your business goals. Opting for a vendor offering a wholesale or commission model can make a meaningful difference in profitability, customer relationships, and operational ease. Here’s a closer look at why these models are beneficial and how to determine the best approach based on experience in the communications market.
Why Wholesale and Commission Models Benefit IT Resellers
Wholesale Model
With a wholesale model, you buy voice services at a discounted rate and then set your own pricing for end customers. This model gives you complete control over margins, allowing you to optimise revenue based on customer needs and market conditions. It’s ideal if you’re ready to manage aspects like support and billing, giving you a high-profit margin potential.
Commission Model
If managing operations isn’t feasible or desirable, the commission model provides a steady, lower-risk revenue stream. You refer clients to the vendor, and they handle setup, support, and customer management. As a result, you receive a commission on each sale or subscription, making this a straightforward way to monetise voice solutions without major operational demands.
Low-Risk, High-Reward Entry Point
The wholesale and commission models remove the need for significant upfront investment, lowering the barriers to entry. With no need for large initial capital or stocking equipment, these models allow you to expand your service portfolio without stretching your resources thin. In particular, the commission model is ideal for resellers looking to test the waters before committing to extensive resource allocation.
Increased Customer Retention and Stickiness
By offering voice communications alongside your IT solutions, you can create a “one-stop shop” experience for clients. This bundled approach leads to increased customer lifetime value, as clients prefer to consolidate services with a single provider they trust. Both wholesale and commission models allow you to integrate voice solutions with existing IT services, boosting client stickiness and making it less likely they’ll turn to competitors.
Monthly Recurring Revenue (MRR) Potential
Monthly recurring revenue (MRR) is a huge advantage in the subscription economy. Both wholesale and commission models support an MRR framework, allowing for stable, predictable revenue. While the wholesale model typically offers higher MRR due to customisable pricing, the commission model still ensures steady income without the need for direct customer management.
Which Model is Best for Your Business?
When choosing between wholesale and commission models, consider the following factors to determine what fits your business best
Wholesale Model – Control and Profit Potential
Ideal for Established Operations
If your business already has a dedicated support team and the ability to handle billing, then the wholesale model can offer the highest profit margins. You have full control over pricing, branding, and customer support, making it easier to differentiate yourself from competitors.
Higher MRR and Customer Ownership
You manage the customer relationship, increasing the likelihood of upselling and creating loyalty. Customers view you as the service provider, giving you greater influence over their long-term experience.
Flexibility to Bundle Services
With full control over pricing and packaging, you can easily bundle voice communications with other IT services, creating customised offerings that align with customer needs.
Best for
Established resellers with resources to manage voice services independently and a desire to maximise revenue potential.
Commission Model – Low Risk, Easy Entry
Ideal for Quick Market Entry
The commission model is an excellent choice if you’re testing the voice communications market or want to add this service without expanding your support infrastructure. Simply refer customers to the vendor, who manages installation, billing, and support.
Predictable, Recurring Income with Minimal Overhead
While the commission rates might be lower than the margins available in a wholesale model, you’ll benefit from recurring revenue with almost no ongoing management. This can make it easier to enter the market and scale quickly.
Great for Lean Operations
For businesses with limited resources, the commission model is a practical way to enhance your service offerings without stretching your team.
Best for
New resellers, smaller businesses, or those looking to expand their services without taking on substantial operational demands.
Why Experience in the Comms Market Favors Both Models
Based on trends in the communications market, both models have unique advantages that align well with reseller goals:
Evolving Customer Needs
Customers increasingly seek flexible, integrated solutions. A wholesale model allows you to cater to these needs with custom packages, while the commission model lets you offer high-quality voice services without operational complexity.
Profit Margin Dynamics
The wholesale model can be highly profitable for resellers willing to manage the service directly. Commission models are effective if you’re prioritising customer acquisition over margin control, as they require minimal ongoing management.
Growth Opportunities with Minimal Risk
Both models offer resellers a way to tap into the high-demand voice market with relatively low risk, especially compared to traditional product sales.
Why NFON is the Ideal Partner for IT Resellers Entering the Voice Communications Market
An IT reseller should consider partnering with NFON for voice communications due to NFON’s flexible, cloud-based platform that supports both wholesale and commission models, making it adaptable to different business needs. NFON offers seamless integration with tools like Microsoft Teams, with direct routing an Operator Connect, allowing resellers to provide customers with a unified communication solution.
NFON’s support infrastructure is built to empower resellers, providing dedicated resources, training, and marketing support to help them succeed. Additionally, NFON’s focus on scalability and robust data security makes it a reliable choice for resellers aiming to deliver a modern, secure, and high-quality voice communication service to their customers, enhancing customer retention and driving recurring revenue.
Conclusion
Both the wholesale and commission models offer powerful ways to enter the voice communications market, each with its unique strengths. If you’re an IT reseller ready to handle full-service management, the wholesale model gives you control over customer relationships and revenue. Meanwhile, the commission model provides a low-risk, hands-off revenue stream, ideal for resellers seeking to expand without adding operational complexity.
By carefully assessing your business model, customer base, and growth objectives, you can choose the model that aligns best with your vision—and start building a successful voice communications offering that enhances customer loyalty and strengthens your bottom line.
