Making Money in the Industry

Although the methods by which to make profits in the termination business are more straightforward than in the prepaid calling card business, there are still some general practices that we recommend to ensure that your company is profitable.

Maintain a High Quality Voice

In the termination business, if the voice quality of your service is poor, you will not be able to sell it.  For list of concerns that your customers will have regarding the quality of your service, please refer to the section of this document entitled “Connecting to Long Distance Providers” on page 7.

Sell for More than You Pay

The heading of this section may seem self-explanatory and maybe even insulting, but there is a reason we remind you to sell your services for more than you pay.  When calculating the cost of your termination, it is extremely important to consider the cost of your Internet service, your telephone lines, your co-location space, local and long distance charges, and any technician salaries that you may be paying.  For example, if your total monthly expenses are $5000, and you are terminating 250,000 minutes of VoIP traffic per month, you should add 2 cents per minute to your per-minute cost.

Collect, Collect, Collect

In many cases, whole termination is provided to customers as a postpaid service.  We recommend that you do some research on any company that is proposing to send postpaid traffic to you.  If you do not feel comfortable accepting postpaid traffic from this customer, propose prepayment or use an escrow service.  Remember, most companies that fail in the termination business fail because they cannot collect the money that is owed to them.