The VoIP Reseller : Searching for Successful Channel Business Models

One of the challenges of the emerging VoIP telephony market is building channel business models that are profitable in an industry where the market perception for VoIP is "free" services. For instance, the primary original draw to Skype was the non-existent tolls associated with long distance calls, especially overseas calls. Yet, as VoIP solutions migrate into the business environment, business managers are seeking "full business solutions" from what has become perceived as a "low cost" business space. This is providing significant challenges to VoIP resellers as they attempt to build a traditional VAR business when the market only allows very limited margins that cannot necessarily be made up in volume.

Andy Abramson at VoIP Watch threw up the gauntlet with his weekend post The Myth of VoIP Resellers:

There’s one problem though. Lack of buyers.

I don’t mean there isn’t a ready made market. What I’m saying is these resellers for the most part still are marketing with a 1.0 mindset.

Garrett Smith, a VoIP reseller channel veteran at VoIP Supply, responds today in his blog, Smith on VoIP, with The Truth About VoIP Resellers:

While I applaud Andy for shedding light on the current state of the VoIP reseller marketplace, I do not agree with everything he mentions, and feel that, although many of his points/suggestions work from an ideological perspective, when it comes to the reality of being a VoIP reseller and growing a business in this marketplace, they just do not hold-up.

Garrett then goes on to provide point-by-point responses to Andy’s observations. Check out both these posts for their respective perspectives on VAR opportunities in the VoIP market space.

Skype is looking for Value Added Resellers in Europe. One of the challenges I see is Skype’s vendor partners’ pricing of their products at a sufficiently high level that appropriately allows for support of the distribution channel. You can readily cut pricing to a level that may meet the market perception but where VAR’s have no incentive to sell solutions. On the other hand web-based education and marketing can bring some of these solutions to smaller enterprises in a cost-efficient manner. Skype’s participation in the distribution channel is going to require new business models not only for Skype but also for their partners such that both parties have successful and profitable businesses while delivering communications cost efficiencies to their end user business customers.

Tags: VoIP Resellers, VoIP Watch, Andy Abramson, Garret Smith, Smith on VoIP, Skype, Skype Resellers

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About Jim Courtney

Bringing over thirty years' experience in the sales, marketing and management of cutting edge technology businesses.
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