A reseller earns revenue by packaging and supporting a service purchased upstream. The difference between the customer invoice and the carrier invoice is not automatically profit. Payment processing, support time, compliance, refunds, bad debt and operating expenses still have to be covered.
Start with the service specification, then build a cost model around its billable events. A number rental, a call to that number and a forwarded call from it can be separate items. A white-label agreement may also introduce platform fees or minimum commitments. Use the actual contract rather than assuming that a public retail price is your wholesale cost.
Keep three components separate
Setup is the one-time work or activation charge. It may cover provisioning, document review, routing configuration or a defined onboarding service. Record both the amount charged to the customer and the direct cost of delivering that setup. Do not use a one-time setup contribution to disguise an unprofitable recurring service.
Monthly rental is the recurring component that applies even when no calls arrive, unless the contract says otherwise. If the customer needs a long-term rented number, examine renewal, suspension, cancellation and transfer terms. Long-term rental is not an unconditional right to keep a number forever.
Usage depends on the billing unit and route. A per-minute figure is meaningful only when you know rounding, minimum durations, destination categories and included allowances. If forwarding creates another billable leg, model it separately rather than treating it as free delivery.
The basic formulas
For a simple plan without bundles or tiered rates:
- Setup contribution = setup revenue − direct setup cost.
- Recurring revenue = monthly rental revenue + billable minutes × customer rate.
- Recurring direct cost = monthly upstream rental + billable minutes × upstream rate.
- Recurring contribution = recurring revenue − recurring direct cost.
- Direct contribution margin = recurring contribution ÷ recurring revenue.
This model assumes the same billable minute quantity on both sides. That assumption can fail when suppliers and customer plans use different billing increments. In a real model, calculate upstream usage and customer usage separately from the call records.
Hypothetical example, not a price quote
Every amount in this example is hypothetical. These figures are arithmetic inputs, not current provider prices, market averages or an earnings forecast. Currency is illustrative USD.
| Component | Customer charge | Direct upstream cost |
|---|---|---|
| One-time setup | $20 | $12 |
| Monthly rental | $15 | $8 |
| Per billable minute | $0.04 | $0.02 |
| Example monthly usage | 300 minutes | 300 minutes |
Under these assumptions, the setup contribution is $8. Monthly recurring revenue is $27: $15 rental plus $12 usage. Direct recurring cost is $14: $8 rental plus $6 usage. That leaves $13 in recurring contribution before all other expenses, or about 48.15% of recurring revenue.
This is not $13 in net profit. Subtract the actual costs of payments, support, platform access, applicable taxes and fees, losses and the rest of the business. Do not apply this illustrative margin to a real supplier or a different usage mix.
Test more than one usage case
Run at least a quiet month, an expected month and a high-usage month. Include the possibility that the customer’s traffic shifts toward a more expensive destination. An apparently attractive average rate can hide an unprofitable route.
For a bundle, test what happens when the included allowance is barely used and when it is fully used. For an unlimited offer, obtain a precise definition of fair use and exclusions before deciding whether you can make the same promise downstream. Avoid selling a broader commitment than you have purchased.
Also test cash timing. An upstream deposit or prepaid balance can be due before the customer pays an invoice. A business can show a positive contribution while lacking the funds to maintain service. Balance monitoring and credit limits are operational controls, not just accounting details.
White-label does not remove the work
A white-label platform may present your branding to the customer, but the contract still determines who handles provisioning, technical support, abuse complaints, refunds and compliance. Check whether you can export customer records and routing configurations if the relationship ends.
Quote the service in terms you can support: number type, capacity, destinations, hours of support and escalation process. Review actual invoices against the model after launch. If you cannot explain a difference between the supplier’s call records and your customer invoice, fix the measurement before adjusting the selling price.
Continue with the US compliance chapter before deciding that a small customer base or an upstream provider makes regulatory review unnecessary.