Starting a Calling Cards Business
HOW IT WORKS:
Before we discuss how to start your own calling cards business, it is important to understand how calling cards actually work.
Selling VoIP calling cards basically means buying software (class 5 softswitch server with calling cards software, also called a calling cards platform) and wholesale minutes to all destinations and then selling them to your clients. When someone buys a calling card from you at their grocery store, they will use your minutes to make their calls and your server will bill them accordingly.
Because this system works with VoIP, you will be able to offer your clients calls at a fraction of the price of regular calls but still offer them great quality calling.
All different types of people use calling cards, whether they are people that want to call family and friends abroad, tourists that want to call their home country or small businesses that have international clients – they have benefits for everyone!
ADVANTAGES OF OFFERING CALLING CARDS AS A SERVICE OVER OTHER VOIP SERVICES
There are so many different VoIP apps today that let you make VoIP calls directly from your mobile phone – without the need of a middle-man, you may be wondering why calling cards still have a place in the market today?
First of all, many software providers allow you to use their cards from both landlines and mobiles. VoIP apps generally only work from mobiles. Calling cards are very easy to use and generally work without problems. When it comes to the VoIP apps, they are not always as reliable. When the user has internet that is not strong enough for example, the calls will be disturbed or not work at all.
There is a big market for selling calling cards as people are always looking for cheaper ways to call abroad. If done properly, this can turn into a very lucrative business.
DIFFERENT TYPES OF CALLING CARDS
There are two types:
Just as the name says it, users will need to enter their pin in order to make a call (usually found on the back of the card)
These calling cards will recognize the user and they will not have to put a pin before using the card
Once signed in, the system will ask the user to enter their access number, in the case of PIN cards – the user will need to enter their pin as well. The system will then tell the user the amount of credit he still has in his account. Now the user can enter the phone number he wishes to call – it’s that simple!
You can offer your clients either only PIN, only PINless or a combination of both types of calling cards.
WHAT YOU NEED IN ORDER TO START:
In order to start a successful calling cards business there are several components you will need
- Class 5 softswitch
This is the main part of your business. You can get a softswitch from a company providing VoIP services for resellers. Make sure you get your server from a reliable company – if your softswitch doesn’t work the whole business will be down. if you are just starting out, one server should be enough, when your business grows, consider adding servers to ensure stability. Having several servers also means that if one server is down for whatever reason, the other one can be used and your business won’t suffer. If possible, try to get different servers from different companies to work together.
If you want to start your business with only minimal investment, you can host or rent a softswitch – this means that you pay monthly instead of paying everything upfront.
Research different class 5 softswitches from different companies and see what they have to offer. When looking into them, make sure you know what the company does when the server is down – do they have 24-hour support in case something goes wrong?
Also check out if they offer training and use it if it is offered.
- Stable internet connection
This is also a very important part of the business, if there is no internet connection – there won’t be any business.
It is advised to put your server in a co-location, as the internet is much less likely to go down in such places than in your home or office.
Also consider having a second internet connection as a backup in case the regular one goes down, or maybe your internet provider has a backup himself in case something goes wrong.
You can also consider having a generator to make sure your business keeps going in case of a power-cut. This obviously depends on the location you are working from, in some places it is needed more than in others.
You will need a PC to manage the calling cards platform via web-interface
This is optional, you can use a printer to print your calling cards or you can have them made by a printing shop.
- Calling cards platform
The calling cards software or platform can be either part of or an addition to the class 5 softswitch. The calling cards software will ensure the smooth running of your business.
When researching different companies to get your platform from ask what type of calling cards it supports; PIN calling cards, PINless calling cards, or both. Ideally it should work with both.
- Integrated billing
The VoIP billing software will collect the data from the call your client made, and charge for it. Integrated billing can come as part of your class 5 softswitch package.
The billing system should be easy to use and be 100 percent reliable, a reliable billing system means a reliable income.
Check out what features are important to you and make sure they are provided in your package; card PIN generation services, expiry dates, usage fee, prepaid/postpaid/flat fee accounting…
- Callback, PIN codes generation system, IVR system
These are extras and make your services better.
Once you have all the hardware and software needed to start a successful calling cards business, you have to start thinking about the routes. This means you need to buy airtime in other words minutes that will allow your clients to call abroad.
Most wholesale route providers specialize in a certain area or continent, this means that they will have cheap rates to that place but they will charge more for other areas.
Get different providers for different areas, check out who has the best offers for each destination. It is a good idea to have more than one provider for each destination – that way if one route goes down, your clients can still make calls using the route from another provider.
There are also a-z providers, this means they offer routes to all destinations, this is convenient but they are also typically more expensive.
Choose international route providers wisely – you want your clients to be happy with their calls.
Choose providers based on:
Obviously price is important as you want to make money. Some providers charge a monthly fee in addition to the rate per minutes so add that up when comparing different costs.
Take note of how you will be billed i.e. per second, per 30 seconds, per minute… if you are charged per minute and you will have many short calls then you will be wasting a lot of money.
Quality is just as important as price. If the call quality is bad, the clients won’t come back. Make a call yourself using that route and check if it is good, there should be no delay, jitters, echo…
Also note the post-dial delay, this means the amount of time it takes from when the user dials till it rings by his recipient, the less time the better.
If the price for a route looks too good to be true, it probably is so choose wisely!
If the route goes down, your clients will not be able to make calls. Find out how often it goes down and what the provider does about it.
How much traffic can the route handle to that destination? If for example you think you will have 100 people calling India at the same time – make sure the route to India can handle that.
A FEW MORE STEPS BEFORE YOU CAN ACTUALLY START SELLING YOU CALLING CARDS…
Print calling cards
Before you can sell the calling cards, they need to be printed. Two points are important when designing you calling cards:
You want people to be able to use your calling cards for as long as their account has credit on it. This means that it shouldn’t break after a few uses. Also, the place where the pin is, needs to be durable – it shouldn’t come off before the calling card is sold but it should still come off easily when scratched.
If you want people to pick your card from the shelf, it has to look attractive.
Once you have decided on a design, you can either print them yourself or have them printed by a printing company. Keep in mind that most printing shops will require you buy a minimum amount to start off with and the more you buy the cheaper they will be per piece. Have a list of all your pin and access codes ready as the printing shop will need this to put on the cards.
Decide on your prices
This is a big step… in the end of the day you want to make money on your calling cards. Add up all your expenses (this is not only the wholesale minutes that you bought, but also all software needed etc… ) and then you will see how much you need to sell for in order to make money. Have separate prices for each destination and think about it carefully.
How to charge for your calling cards
Many people mistakenly believe that you make money only by charging for the minutes that clients use. This is not true – there are other ways of charging that can add up to your profit…
- Activation fee: when a card is used for the first time
- Connection fee: charged at the beginning of the call
- Maintenance fee: charged for every day/month/year that the account is open
You can also choose how you bill your clients whether it is per second, per 30 seconds, per minute…
Remember that if you put $10 on a calling card, you will not get $10 if you sell it through a retailer, as they will need to make a profit too. They will probably pay you about $7. When you sell a calling card, you can ask the user to top up his account through you own top up system when his credit is depleted. This means that if he tops up for $10, you will get the full $10 and there is no middle man. You will have to invest in software in order to do so but it may be worth it.
Another thing people do to make more money, is to specialize in a certain area or continent so they advertise their calling cards for that place. They make a normal profit on cards to that area. If a user wants to use that calling card to call a place outside of the area you specialize in, then they charge much higher rates which means they make a higher profit.
CHOOSING WHERE TO SELL THE CARDS
There are several places you can sell your calling cards, these include:
- internet cafes
- retail stores
- grocer shops
Think about places foreigners shop for products related to their home countries, these people are probably interested in calling cards as you know they have some connection to a place abroad.
In order to get your cards to sell in the beginning you can consider offering a tiny percentage of your profit on the card to the person selling it, this will also drive him to try and sell yours over other brands.
When it comes to calling cards sold in shops you usually get paid when the card is sold and not upfront.
Another option is to offer calling cards through the internet. The way it works is that you just send users their pins and access numbers and there is no actual card. When selling calling cards through the internet, you save on the printing and distribution but you need software to take online payments.
PROMOTING AND ADVERTISING
Tell friends and family about the business you are starting and they will spread the word. Slowly but surely you will get more and more customers…
If you have a larger budget, you can consider advertising a little to bring awareness about your calling cards.