In the last post, I shared with you the beginning part of the advice I gave my friend when he asked if he should start a bulk SMS business or a recharge card printing business. (If you missed that post, click here to read it now.)
After further enlightening Kola on the pros and cons of both businesses, I went ahead to tell him that I would always go for bulk SMS reselling I had to choose a hundred times. He asked me why, and I gave him the following five reasons:
1. Bulk SMS rakes in lots of cash from organizations
Granted, you may not make meaningful profit from bulk SMS reselling if you don’t have clients who buy bulk SMS units in huge volumes. But the truth remains, organizations (like churches, mosques, schools, cooperative societies, companies, and so on) use bulk SMS regularly and so they buy bulk SMS units in large quantities. This means, with bulk SMS reselling, you can make a fortune from these organizations in just ONE deal.
But with regards to recharge card printing, you don’t have large organizations as your prospects because they don’t buy recharge cards for their staff, congregation, or customers. You get that?
2. Marketing is easier with bulk SMS
As a bulk SMS reseller, you can reach out to several prospects using some of your bulk SMS units. Better yet, you can send well-crafted proposals to corporate organizations. The bottom line is that you can launch your marketing campaign right from the corner of your room.
But can you do the same if you opt for recharge card printing? No. You’ll need extra effort. You’ll most likely have to meet recharge card sellers in person and do a lot of talking before convincing them to buy from you.
3. Delivery is also much easier with bulk SMS
After receiving order notifications, you can deliver them right on the spot. Whether you’re in your room or you’re in transit, you can easily transfer bulk SMS units using your smartphone. In short, you don’t have to see your customers in person before you satisfy their needs.
As for recharge card printing however, you’ll need to deliver the recharge cards in person. Remember, recharge cards are physical commodities and so are not deliverable via electronic means. So, you have to either go to your customers to sell to them or they come to buy from you. Either way, you or someone you’ve designated must be physically present in order to deliver recharge cards to buyers.
4. Attracting customers is easier
In recharge card printing, hardly can you attract new customers with discounts – because you simply cannot afford to offer them one. But since this is about the only way you can attract customers easily (Nigerians love discounts), your chances of snatching customers off your competitors are very slim.
However, as a bulk SMS reseller, you can easily give discounts to customers after large orders. For instance, you can give additional 10 free units for each 200 or 500 units purchased. And this is a proven strategy that builds customer loyalty. Can you adopt the same as a recharge card seller? No.
5. Setting up bulk SMS is easier
To start a bulk SMS reselling business, all you need to do is set up your own website for receiving orders, delivering orders, and controlling customers’ accounts. If you’re not tech-savvy, most bulk SMS gateway providers and retailers will set it up for you free-of-charge or for a very little fee. And that’s it. Your business is ready to start off.
Starting a recharge card printing business requires more money, effort, and time. And you’ll have to expend about the same amount of time and effort as time goes on. But in bulk SMS reselling, you’ll only need to spare very little effort (send order to customers and order in bulk from your gateway provider).
6. Profit Margins are larger
If you talk to the Average recharge card dealer, you would hear Horror stories of How they make less than 5% per card! This is after renting of shops and other expenses. The poor profit margins are mainly as a result of the Cap placed on prices (e.g 1500naira must be sold as 1500)
With Bulk SMS, dependent on marketing strategy and Positioning, units bought at less than 1naira can be sold for up to 2 naira from the comfort of your home.
7. Bulk SMS Reselling is Extremely Scalable
Which would you rather go into? A business that is known only on your street and the next? Or one where you can sell from Port Harcourt to Kafanchan without leaving your House?
The choice is a no-brainer, with Bulk SMS Reselling, you can sell all around the World with very low overhead costs, expanding your potential market from Hundreds of People to Millions.
Well, these were the points I used to convince my friend to choose bulk SMS reselling over recharge card printing. He set up his bulk SMS website the following day, and started marketing with zeal. In three weeks and with hardwork, he landed some mouth watering deals (from 2 churches, a private secondary school, and 2 boutique) and he’s now making cool money.