Since the advent of GSM services in 2001 the recharge card market has been increasing in volume and sales. From a 100,000 subscribers to millions today and many millions in the near future. The recharge card market would ever remain profitable for good investment. But the problem many investors would encounter is not having a proper knowledge of the market and knowing what to do at all time.
In every business there are secrets that separate the smart investors from the good investors. A good investor may know that buying and selling recharge card brings profit but a smart one would explore the potential to its utmost limits to make more profit.
For instance, most entrepreneurs may not know that the business of recharge card is selling of airtime. And that means as airtime, you can design different ways possible to sell more airtime that could possible be done with just the voucher.
Until you know this and how you can apply this into your recharge card business you will not be able to make more money or reap millions as much as I'm trying to show you in this step by step guide.
Another point I want you to see is the fact that you must apply recharge card business to sell to as many people as possible – that means you will have to create multiple selling points. This is important and I must explain it properly under successful recharge card marketing tips.
Another point you should look into is printing vouchers and obtaining dealership from the operators. There are voucher values you cannot get in plastic cards except you can print them in vouchers. And there are certain advantages you can't get in recharge card market except you are a dealer yourself.
And even if you don't have the requirements to go for dealership, you can be getting better prices when you buy recharge cards in bulk or large quantities. Under how to buy recharge cards cheaper from dealers, I will be showing you how to do that successfully.
You must know that you are doing business, even while you seek to make profit you must seek to reduce your expenditure. If you don't address this properly you will find your profit going into your expenditures. Most recharge card businesses found themselves here and they don't know what their problem is. Avoid this and you will retain as much profit as you make.
Note: at any point in time either physical recharge card as in the plastic cards or the voucher (paper) type can be higher or lower than each other. What I mean is at different times either the plastic or the voucher could be cheaper or more profitable to deal on. For example, you may found at some time that vouchers are costly compared to the plastic ones or that the plastic is costly compared to the voucher. Either way watch your investment before you throw away money.
How to become a recharge card dealer with the GSM operators
One thing that would make your recharge business more successfully is if you can be getting recharge cards directly from the operators. Apart from other incentives that go with being a direct dealer with the operators, you also get recharge cards at a rate that gives you some competitive advantage.
And Vmobile now Airtel has made it even cheaper to become a distributor, with over 8 percent commission on recharge cards. Initially, the minimum financial requirement for distributors was
N1.5 Million, but Airtel has cut down this amount to just N750, 000. With just this amount ready you can become a Celtel distributor.
However, your company needs to be registered with the Corporate Affairs Commission as a limited liability company for Airtel to consider you application. And if you have been in business for sometimes now, you are expected to provide your latest income tax clearance certificate.
Note: that even this may change without prior notification to anybody and the company may stop any offer of dealership at anytime without information the general public.
The company also expects that you produce a letter of introduction form you bankers. (just approach your accounts officer and he will work it out for you). However, for banks to issue such letter you must have operated an account with them for about three months. That means you also have bank statement for the three months – because you will need it too.
Steps to become a GSM distributor
To become a distributor to any operator there are certain things that count most, your ability to finance all your purchase with proof like statements of your financial affairs, appropriate NCC license for making GSM products, office location etc. these three things starts you off.
However, for each independent operator, other requirements may differ in terms of amount to be paid for form, registration, minimum products purchase, etc. but note that no two operators have exactly the same requirements for distributors- and that the process may be changed at will by the operator either to allow more people to register or to block more people from registering.
The starting point for distributorship is getting the form. You can get that from any of the GSM operators' Zonal offices of their friendship centers. Although some of the operators have specific offices for such transaction. Start asking from their nearest office to you.
However, for voucher printing the duo of Glo and Zain offer direct voucher printing dealership. Glo accept minimum of N750, 000 for a start, while Zain accept N500, 000. And both require that your company be registered with NCC.
How to make a successful application
Even though GSM operators need distributors to market their products, it's certainly not everybody they would welcome. Imagine you, with all your financial power not being able to secure license. Of course, there are times money is not everything. At such times, experience of retail business, networking, and customer acre may be just what may qualify you. However, money plays a major role. But ability to market GSM products, experience in the retail world, experience in telecom related business may be required.
Apart from all the experiences and financial fire power you can muster, your location may also play a fast role. Some operators no longer approve licenses to certain zones in the country due to saturation, but applying from a less licensed zone can increase your chances of success.
Just How Much May Be Needed?
It doesn't really cost that much to get a distributor license, it all depends on how much value you place on the license. However, you should be well prepared financially before applying for distributor license. GSM business is strictly a cash basis – so the operators are serious about your financial abilities to purchase products on cash basis.
By my estimate, you should at lease have a minimum of N5million for buying of product. You can even buy more – and it's better. One of the reasons for non profitability of most distributors business is the inability to buy more products or advertise their products. With more money you can make more profit at a fast turnover rate.
How to buy up an existing license
Selling existing license differ with each party buying or selling. However, the buying party must be cautions and trade carefully. He must also understand the business of the distributor, his profit avenues, and relationship with the operator. It's advisable you consult a communication expert and a legal representative to approach the selling party and check his offer thoroughly.
Most importantly, your consultant should evaluate the value of the license to know if it has existing customers that buys from the company, the purchasing power, the relationship between the company and its GSM operator in the last 60 days, the other little- little benefits of the license that might not even being know to the original owner.
Finally, once everything has been worked out, and price has been agreed upon, then, you need to consult the GSM operator that issued the license to endorse the transfer of license form the original company to you. If the operator did not endorse it, you may be at risk if you still venture into it. And you will be losing some special bonuses that operators pay directly into the bank accounts of their distributors if you are directly known to them.
Just how much should one pay for existing license transfer
It will depend on the parties involves and their current financial value of the license. If the company has some good number of existing client base with very good purchasing power or good network of sub- distributors and dealers you may have too cough out more to pay. Some existing license may be valued higher than new ones, because of the existing client base; with such license you can start making more with your license immediately while you build new clients gradually.
How to buy recharge cards cheaper from dealers
We are going to look at this from two angles. One is how to get deals from bigger distributors; and two is how to make deals with your customers. You should have ready customers for your products- and those deals you can make with them would keep them. I will also show you how I make 'profit – cut' deals without investing my own money. This is ideal for a started or someone with low capital base.
What GSM distributors all want to hear is money talks. Money plays an important role in tightening up any good deal with the distributors. The reason is they paid dealership fees to the operators for the advantage they got, and some of them don't have enough capital base after some bad deals they did to continue meeting up with their business needs, or simply a matter of policy not to sale on credit.
And to succeed in dealing with them you must use money as an instrument to cut cheaper deals. Since that's language they all understand,