Become an SMS aggregator

Three Ways to Become an SMS Aggregator

Setting up your own business as an SMS aggregator is a great and the same time challenging project. This profitable business creates value for telecom companies, entrepreneurs from other industries, and, ultimately, end-users. You can go for one of these three options if you decide to become an SMS aggregator:

  • Become an owner of an SMS Gateway (Acquisition mode)
  • Rent an SMS Gateway (Cloud mode)
  • Become a white-labelled reseller of an existing platform (Reseller mode)

The first option is recommended for those who have already been in touch with the telecom industry. Otherwise, renting or reselling are good alternatives to risky investments, because these options will give you the time to understand how the industry works. Eventually, you can decide if you want to switch from renting an SMS gateway to owning it.

In this blog post, we’ve highlighted the advantages and disadvantages of the three options.

If You Acquire a Custom SMS Gateway Software

Advantages Disadvantages
Profit is not affected by OPEX Experience in the industry is required
Control over the connectivity & hardware Higher implementation cost and CAPEX
Features flexibility An infrastructure is required
The system can be provider independent Practical know-how in signing beneficial contracts with MNOs and carriers
Control over costs and capacity as per demand At least one employee is needed to perform technical support tasks

If You Rent an SMS Gateway

Advantages Disadvantages
Reduced CAPEX and time to market Experience in the industry is a plus
Control over connectivity Increased OPEX (Monthly recurrent renting costs)
Upgrades assured by the provider Stable connectivity with a strong back-up is required
Level 3 support assured by the provider Practical know-how in signing beneficial contracts with MNOs and carriers
Control over costs and capacity as per demand At least one employee is needed to perform technical support tasks

If You Become an SMS Aggregator by Reselling an Existing Platform

Advantages Disadvantages
No need to be an expert in the industry Smaller profit net margin
It’s easier to become a reseller No control over connectivity options
No need for an infrastructure Smaller price flexibility
Technical issues are resolved by an external tech support Limited features
Requires smaller initial investments The system may be lacking scalability
Short time to market No influence over updates

These lists cannot be perceived lopsidedly. Someone can consider the expertise in the bulk SMS industry a huge advantage. The other will be satisfied by the limited number of features because those completely suffice current business needs. The perception of the lists is subjective and depends on the final goal.

If the goal is to sell big SMS packages to others or to offer a feature that other SMS aggregators don’t have, then you should explore the option of acquiring or renting a custom SMS gateway software. Alternatively, if the aim is to sell smaller SMS batches to clients that don’t use SMS extensively, then it makes more sense to become a reseller of an existing platform.

ROI, competition, pricing and client support are among business challenges you will have to face. You need to be prepared to deal with them.

ROI

This is the most important challenge. The ROI you will get is influenced by a set factors such as a well-developed strategy, the ability to grow volumes, networking, control over OPEX, CAPEX investments. Professionalism and level of your and team’s commitment will also influence your profits.

Competition

Good clients are not attracted only by the lowest price on the market. The level of support should be high for the customers to stay with you. Sign, and most importantly, stick to a detailed SLA with your customers to gain credibility and outrun your competition. In addition to that, follow industry trends to identify areas for innovation.

Pricing

Offering the lowest or the highest price without any strategy behind is not viable. Always aim for a price that is in line with market trends and your service quality.

Client Support

As mentioned above, professional support is a must for an SMS aggregator. If you decided to become an SMS aggregator by using a custom SMS gateway software, make sure that you train your customer-facing team members sufficiently because these people are the face of the company to a customer. Existing customers need to be so impressed that they will recommend your team to their business connections. If you enter the bulk SMS business as a white-labelled reseller, then make sure you choose a platform that has an experienced and responsive support team.

In case you decide to become an SMS aggregator, develop a detailed business plan that you can refer to when needed. Besides that, hire a strong team of professionals with a problem-solving mindset. And last but not least, as in any other business, be prepared for a lot of work that requires commitment and creativity.

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