The global SMS market is expected to reach over $100 billion by 2024 as businesses increasingly use text messaging to engage customers. This presents a huge opportunity for aspiring entrepreneurs to become SMS resellers and start their lucrative SMS business.
An SMS reseller partners with SMS providers to buy SMS credits in bulk at wholesale rates. They then resell these SMS credits at a markup to other businesses that need to send high volumes of texts for marketing, notifications, alerts, and other uses. The reseller essentially acts as a middleman, profiting from the difference between wholesale and retail SMS prices.
So how can you break into this potentially profitable industry and start your own SMS reselling business? This comprehensive guide covers everything you need to know, from finding the best SMS providers to marketing your services and managing your new business.
Choosing an SMS Provider
The first step to becoming an SMS reseller is finding one or more SMS providers to partner with. The SMS provider supplies the actual SMS infrastructure and platform required to send and receive text messages. As a reseller, you need to find a provider that offers:
- Competitive wholesale SMS rates and pricing models. Look for deals on bulk SMS credits so you can maximize your profit margins. Common pricing models include pay-as-you-go, monthly packages, and yearly contracts.
- Reliable SMS delivery with high throughput. Choose a provider with a robust infrastructure that can handle high SMS volumes without delays or errors. Look for uptime guarantees.
- Easy to use SMS interfaces and dashboards. Your customers will use these to send SMS campaigns, so opt for simple and intuitive platforms. APIs are also useful for automating SMS sending.
- Dedicated account management support. Look for providers that assign account managers to help you resolve issues quickly.
Some of the top SMS providers include Twilio, Infobip, Route Mobile, and Zipwhip. Take your time researching different providers to find the best fit for your reselling business. It may be worth partnering with multiple providers to compare pricing and features.
Understanding SMS Pricing
As an SMS reseller, your business model relies on profiting from the difference between wholesale and retail SMS prices. The larger this price difference, the higher your earning potential. So you need a solid grasp of SMS pricing models.
SMS prices at the wholesale level are typically quoted per SMS credit or message sent. Common price ranges include:
- $0.005 to $0.009 per SMS credit
- $0.01 to $0.03 per SMS sent
So at a typical wholesale rate of $0.0075 per SMS credit, 100 credits would cost you $0.75. You would then sell these 100 credits to a business for say $1.50, pocketing the $0.75 profit.
Retail SMS prices vary more widely based on your clients and value-added services. But look for a 100% to 300% markup on your wholesale costs at a minimum. Popular pricing models include:
- Per SMS pricing - $0.03 to $0.10 per SMS sent
- Monthly packages - $20 to $100 per month including X number of SMS
- Custom plans - For high volume, negotiate custom rates
Ultimately your SMS pricing should maximize profits while remaining competitive. Maintain healthy margins but be flexible to win over clients. Consider offering discounts on bulk SMS purchases.
Building Your Reseller Business
With providers chosen and pricing models understood it's time to focus on building out your actual SMS reseller operation. Follow these steps to launch your business:
- Choose a business name & register your company - Pick something catchy and descriptive.
- Develop your brand identity - Logo, website, and branding that conveys professionalism.
- Create marketing materials - Brochures, flyers, and presentations to sell your services.
- Research your target clients - Identify businesses that require bulk SMS for marketing or notifications.
- Promote your SMS business - Email campaigns, cold calling, networking, and social media ads.
- Onboard new clients - Make the SMS ordering process easy through online portals.
- Provide excellent customer service - Quickly respond to client issues and questions.
- Invest in automation - Tools like drip campaigns to engage clients.
- Analyze client data - Identify upsell opportunities and ways to boost retention.
The initial legwork requires time and dedication. However once established, an SMS reseller business can run smoothly with minimal staff oversight.SMS opens up communication with customers in an effective yet affordable way.
Scaling Your SMS Reselling Business
Once you have gained some initial SMS reselling clients, focus on scaling up your business substantially.
The SMS needs of larger enterprises represent your most lucrative opportunity. These high-volume SMS users, such as retailers, restaurants, and other major companies can become anchors for your business’s growth. Assign dedicated account managers to acquire and service these premium clients.
You can also broaden your client base internationally. Expanding to new regions multiplies your addressable market. Partner with SMS providers that offer numbers and connectivity globally. Adapt your marketing and collateral.
Diversifying your offerings beyond just SMS reselling also presents expansion possibilities. Consider reselling additional communication services like email, voice broadcasts, and mobile verifications. Bundle these as a complete suite of customer engagement options.
Automating as much of the fulfillment and delivery process as possible is key to scaling efficiently. The less manual oversight required, the lower your operating costs. Invest in robust and customizable SMS platforms. Integrate SMS ordering, payment processing, and delivery via simple customer dashboards.
By securing larger clients and automating processes, a lean SMS reselling operation can swell into a highly profitable SMS enterprise.
Maximizing Profits as an SMS Reseller
A successful SMS reselling business ultimately comes down to maximizing your profit margins. Here are some tips:
- Negotiate the lowest possible wholesale SMS rates with providers, stressing your bulk purchasing power.
- Markup retail rates sufficiently to leave healthy profit margins, at least 100% of wholesale costs.
- Reduce overhead like marketing costs through word-of-mouth and digital promotion.
- Leverage automation so fewer staff are required as your volumes grow.
- Invest in analytics to identify your highest profit clients and service packages.
- Experiment with adjusting pricing and packages to increase profits.
- Explore alternate revenue streams beyond just SMS reselling.
- Offer tiered pricing, with bigger discounts for your largest buyers.
- Maintain high customer retention to continue profiting from existing clients.
A lean SMS operation with proper margins can throw off considerable profits. But costs can quickly eat into your earnings if you’re not diligent. Careful analysis of profitability across clients, pricing, and other factors is crucial.
Staying Compliant as an SMS Reseller
Running any business comes with legal and regulatory obligations you must meet. As an SMS reseller, staying compliant helps avoid major risks like:
- Lawsuits over deceptive marketing, privacy violations, and TCPA violations.
- Fines from regulators like the FCC over compliance failures.
- Being blocked by carriers for violating terms of service.
- Damage to your reputation and relationships.
The main compliance focus areas include:
- Respecting consumer privacy and consent - Only text opted-in numbers and honor opt-out requests.
- Checking your clients aren’t sending illegal, deceptive, or dangerous messages.
- Avoid sending spam by sticking to best practices for frequency, relevance, etc.
- Ensuring you comply with telecom regulations in the regions you operate.
- Communicating your messaging practices and terms in client contracts.
Leveraging compliance tools like opt-out managers, content filtering, and analytics will help. However, identifying potential risks proactively and adjusting accordingly is prudent as your business expands. Receiving carrier or legal complaints can jeopardize your business.
Partnering with experienced SMS providers familiar with laws and regulations is wise. Ultimately though, the compliance burden falls on you as the service provider to clients. So invest in proper advisory and audits to avoid major missteps as your volumes increase.
Get Started as an SMS Reseller Today
The SMS reseller industry provides an exciting business opportunity, with minimal barriers to entry but almost unlimited upside. By partnering with top SMS providers, marketing your services effectively, automating fulfillment, and optimizing your margins, your lean reselling operation can expand into a highly thriving SMS enterprise. Use this guide to start growing your own SMS business today.