Why Marking Up Phone Bills is a Bad Business Model

TET
The Enfonica Team
25 January 2024
2 min read

It looks like easy money, but "reselling" minutes is actually costing you clients.

The "Free Money" Trap.

It's tempting, isn't it? Buy a phone number for $2. Sell it for $10. Buy minutes for 5c. Sell them for 10c. Multiply by 50 clients. Free money!

Wrong. Reselling telco usage is one of the lowest-leverage ways to make money as an agency. Here is why.

1. It creates friction.

When you send a bill that varies every month, you invite scrutiny. "Why was the bill $120 last month and $145 this month?" Now you are spending an hour explaining "call minutes" to a plumber. Is that the best use of your hourly rate?

2. It creates distrust.

Clients aren't stupid. They know VOIP is cheap. When they realize you are marking up a commodity by 200%, they start to wonder what else you are marking up. Your media spend? Your management fee? Trust takes years to build and seconds to break.

3. It anchors you as a utility.

You want to be a Strategic Partner. You want to be valued for your brain, your creativity, and your ability to drive growth. When you bill for minutes, you anchor yourself as a Utility Vendor. People switch utility vendors to save 5%. People never switch strategic partners who are making them rich.

The Alternative

Charge for your value.

  • Charge a setup fee for the integration.
  • Charge a management fee for the reporting.
  • Charge for the Outcome, not the minutes.

Let the client pay the raw telco bill directly (via Enfonica's Client-Direct model). You keep your hands clean, your admin low, and your trust high.