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The methods by which to market your calling cards
will differ from location to location.
Selling through Retail Stores
In areas that are highly dominated by minorities,
there tends to be a great deal of competition in the phone card
business. However, competition does not mean there is no money to
be made. Be sure to read the section in this document entitled
“Competition Pricing (The Hidden Fees).” Most customers in these
minority-dominated areas tend to buy phone cards from local ethnic
retail shops. Usually, these stores are willing to carry new phone
cards if they feel they can make money with it. Retail stores
generally buy cards at about 75% of the face value of the card. For
example, if you have a card that has a face value of $5.00, the
retailer will pay you $3.75.
Areas that have a large number of international
and business travelers tend to be more profitable for phone card
companies than minority-dominated areas. Retail stores in these
areas tend to take higher commissions, however, the profit margins
are also much higher (see the section of this document entitled “Set
Different Rates for Different Customers”). Retail stores in these
areas will usually pay less than 75% of face value for phone cards.
Selling through a Distributor
Many phone card companies prefer not to sell
directly to retail stores, but rather prefer to sell cards through a
distributor. Phone card distributors usually distribute more than
one brand of card and usually have an established relationship with
the local retail stores. Selling through a distributor is the best
way to sell a high volume of cards, however, there is a price to pay
for this convenience. After paying the distributor and the retail
store, you should expect to receive less than 70% of the face value
of your card. Also, distributors usually do not pay you up front
for your cards; they only pay after they get paid.
Selling Prepaid Services at an Internet Cafe
Internet cafes are ideal locations to sell prepaid
calling services. There is no need to purchase PSTN lines from the
phone company, and the Internet infrastructure is already in place.
Also, customers do not require a physical calling card, so there is
no need to print any cards. Customers that are already using the
Internet services will be aware that they now can make international
calls from the same location.
Selling through the Internet
Over the past couple of years, Internet phone card
sales have increased tremendously. The Internet makes it convenient
for customers to purchase and recharge cards. There are, of course,
advantages and disadvantages to choosing this method of
distribution:
Advantages
- Very convenient for customers
- Customers can view their balances and statements online
- Avoid distribution fees by allowing customers to recharge online
- No card printing charge – system automatically emails PIN
- If a customer is satisfied, it is easy for him to refer a friend
- Easy to market the product internationally
Disadvantages
- Difficult to obtain a merchant account if you
are only selling phone cards
- Credit card merchant fees
- Higher probability of fraud online
- Many people that buy phone cards do not have a credit card
- Many people that buy phone cards do not have Internet at home
Selling to Existing Customers
In any business, there is no customer like your
own customer. If a customer is satisfied with the quality of your
service, chances are that you can convince him to buy from your
company again. On the back of every card and in every email that
you send to a customer, it is essential that you offer recharge
capabilities. Recharge capabilities increase your profit margin by
removing the distributor from the picture.
PEC offers customers two solutions to allow
recharging capabilities. The first is via the web, and the second
is via the telephone. Customers can use their credit cards to
recharge their accounts instantly. |
