ISP Reseller vs Direct Service: Which to Choose?

weirdtoo
Jun 19
11 min read

Updated: 6 days ago

You need to pick if you'll be an ISP reseller or run your ISP. Here's what to think about to help you choose:

Reseller Model: Small start costs, fast into the market, and simple setup. You sell others' services with your name, but you do not have much say on the network and get less money.
Direct ISP Model: Big start costs, total control of your network, and the chance for more money. You handle stuff like fiber cables and towers, but it needs deep tech know-how and a lot of cash.

Side-by-side Look

Thing	Reseller Way	Direct ISP Way
Start Costs	Small	Big
Power	Not much	All
Money Made	5–40%	10–20%
Tech Know-how	Little	Big
Growth	Capped by others	Big, depends on your own stuff
Help for Users	Some by others	All done by your team

Main Point: If you want a safe and fast start, pick the reseller way. But, if you've got tech skills, money, and aim for long-term big growth with full control, choosing the direct ISP way is best. Each choice has its own good and bad sides, so pick depending on what you have, your market, and your goals.

CipherKey Exchange Corporation - Fibre, DSL and Cable Reseller

Basic Ideas: Reselling vs. Getting your Own ISP Service

Picking to be a reseller or to have a direct ISP changes more than just how you give internet to those who buy from you - it shapes everything from what you do each day to your plans for growing your work.

What Does a ISP Reseller Do?

An ISP reseller is a firm that buys network room from big ISPs and sells internet help under its own name. See it as buying a lot of stuff at once and then selling it piece by piece, but with your own tag on it.

Here is how it goes: You team up with a big ISP that has the needed gears - fiber wires, data hubs, and network tools. They give you a big amount of bandwidth, and you break it up and sell parts of it to your people. Your main job is to deal with things like ads, sales, money matters, and helping users [4].

Knut Grøneng, who used to help with network safety, puts it in simple words:

The RSP or Reseller Service Providers is a company that is reselling Internet Services provided by other [1].

Another view is from Singh Surendra, who works for an ISP:

It's simple take and give concept. You take Internet service from bigger ISPs and distribute to clients [1].

This way lets those who sell focus on talking to buyers while the main provider takes care of the big job of keeping the setup running. You don't have to stress about putting in fiber wires or taking care of cell towers; you can work on getting more customers and making ties in your area.

A main part of this way is white-labeling, which means you can show the service as yours. Your buyers see your brand, logo, and their own portal, even when the real net service is from a bigger provider. To them, you are the net provider, and that's just how it is set up to work.

This way gets you into the market quick by using set up networks, often finding those who big providers miss. But, it also means a big lean on your main partners, a clear shift from control the direct model gives you.

What Is Direct ISP Service?

The direct way puts you in full charge, from setup to talking to buyers. Here, you own and run your own net, which means handling everything - from laying wires to answering midnight calls.

A direct ISP owns the physical stuff that brings net to its customers. This takes in fiber wires, net towers, devices, and often its own centers. You talk face to face with top net providers for wide net use, and manage how your network runs.

This way gives you total control over your network. You pick how to route traffic, choice of gear, how to manage busy times, and the service you promise. If a user has a net issue, your workers can follow it from their home back to your main network and fix it there - no waiting for someone else.

Direct ISPs can also change services. Be it one-of-kind offers, services for businesses, or net setups, you adjust to fit your local market needs. Say, if a company needs a sure link or special routing, you can make it happen without needing a nod from a wholesale partner.

Yet, this way costs a lot. You need to buy gear, keep the network, follow rules, and watch over it all day, every day. Every single piece is your duty to keep up, better, or switch as needed.

This way is best if you have the tech skills and money to build and handle the network. It's also great for places with enough people to back putting money in your own gear.

The field itself is on the rise. In 2024, there will be 27,978 Global Internet Service Providers, up 4.4% from 2023 [3]. This growth has both sellers reaching out to less served places and direct ISPs growing their setups to go against bigger names.

These two types - reseller and direct ISP - set the base for making clear the big and small calls talked about in this guide. Each one has its good points and hard parts, and the pick rests on what fits best with your work aims.

Main Choices: Reseller vs. Direct ISP

Choosing to be a reseller or a direct ISP shapes everything from your day-to-day work to how much you can grow in the future. By knowing how these models differ, you can see which fits better with your tools and aims. Below, we go over key points like work needs, costs, and control over what you offer.

Business Setup and What You Need

Direct ISPs own and run their network gear, which needs a lot of money at the start. For instance, setting up fiber optics or satellite tech can lead to 40% of the first costs [8]. Even though this path needs a lot of money and know-how, it gives full control over the network.

On the other hand, ISP resellers use services from big providers for network access and management. This cuts out the need to spend a lot on gear, making it easy to start. But, it also means resellers have less say in how things run [5][6].

Making Money and Costs

Direct ISPs often see profits between 10% and 20%. City providers might get closer to 15–20%, while those in less served areas might start at about 10–12% [8]. Their main costs are about building and keeping up the network, following rules, getting permits, and helping customers. Once everything is set up, adding more users costs very little. Plans to cut user turnover by 5–10% can bring stable earnings growth [8].

For resellers, making money mostly relies on the prices they get from their big providers. Usually, these are marked up by 20% to 40%, but sometimes it can be as low as 5% [7]. Reseller costs target buying network space, ads, helping customers, billing, and running things. While the low start costs and quick way to market are good, smaller profit margins from set prices can cap their earnings [7].

Helping Customers and Running Services

Direct ISPs run their networks completely, letting them deal with issues and change services themselves. For example, if a user has a problem, techs can fix it right away by changing routes or network space. This control lets direct ISPs offer custom fixes like special business ties or set service terms. They can also add services like VoIP, expected to reach $236.25 billion by 2028 [6].

Resellers, though, only deal with basic customer help. For big tech problems, they must turn to their providers [2]. This need can slow down fixing breaks or other trouble. Choices for changes are also limited by what the main provider can do, which can hurt their chance to stand out in the market.

These differences in running services and making changes not only change how happy customers are but also play into how each model does against others in the ISP world.

Making the Right Choice

Choosing between a reseller or a direct ISP plan is a big decision. A wrong pick can cost a lot of money. Here's a simple way to help make a smart choice.

Things to Think About When Picking a Plan

How Many People and How Close They Are How many people live close by matters a lot. Direct ISPs need a lot of people close together to cover the high costs of setting up. But, resellers work better in places where people live far apart, as spending a lot on setting up might not pay off.

Tech Skills Running a direct ISP takes a team with deep tech skills, like managing network paths, setting up fiber, and more. Without these skills, you might face big problems. For example, a 2020 study showed that 31% of businesses lost up to $1.2 million because of network problems [9]. If you don't have these skills, going with a reseller might be easier.

Money Matters It’s not just the start-up costs - ongoing costs are also high. Direct ISPs spend a lot on keeping gear working, following rules, and fixing emergencies. Resellers skip some costs but deal with changing prices for services. Make sure your money plan can take care of both start-up and running costs.

Chance to Grow Direct ISPs can grow their services more easily. Resellers have limits based on what their providers offer.

Need for Steady Service Businesses often need quick, steady, and non-stop internet. If you serve business clients, your chosen model should meet these needs.

Safety Issues Direct ISPs need strong, many-layered security against online dangers. Resellers depend on the security their providers have, which gives them less control over safety problems.

These points help you see how different choices work in real life.

Real Examples

AfriQ Network Solutions AfriQ Network Solutions shows how working smarter can change a company. CEO Erick Kiboi talked about how automating their billing changed the game:

The billing process automation was magical. Game changer. Payment integration, disconnection, and reconnection. We cut down on losses from clients who had not paid bills but enjoyed the service till manual disconnection was done. 2 am "I have paid, reconnect me" calls ended. We forgot about manual payment reconciliation, manual disconnection, and reconnection and we focused on onboarding more and more customers.

Erick Kiboi, AfriQ Network Solutions Ltd [10]

Blubroadband's Story For Blubroadband, good help systems were key. Their CEO, Spencer Pous, talked about a big time:

I wanted to give a shoutout to Splynx. I had a critical VM host fail over the weekend. Not only was restoring from backup simple as can be (on a fresh install), but the few issues I did experience, Splynx responded to my tickets and solved within 15 minutes of opening tickets, on a weekend. This is exactly what I need (and expect) in a partner!

Spencer Pous, Head of Blubroadband [10]

Rules and Issues Going through rules can be a big block. As one work expert said:

The first issue is the regulatory overhead, in that certain regions require you to be licensed as a telecommunications service provider... Once you've cleared that hurdle remember you're just another reseller, so if your wholesaler has an outage it's reflecting on your brand.

johor [2]

Look at Both: Reseller vs. Direct ISP

Here, we look at the Strong points, Weak points, Chances, and Risks for each way. This will help you think about what you pick:

Factor	Reseller Model	Direct ISP Model
Strengths	Low start costs, easy market entry, use of set systems, no need for much tech know-how	Total network control, more money made, custom services, direct ties with buyers
Weaknesses	Less money made, need wholesale providers, few changes allowed, shared name risks	Big costs for build-up, complex tech needs, rule issues, slow to get into market
Opportunities	Quick growth in market, white-label deals, focus on buyers, test market with low risk	Rule the market with full setup, high-end offers, chance for new tech
Threats	Stops in service from providers, price changes, hard to stand out, tied to contracts	System breaks, online security risks, new rules, high costs to get buyers

This study can show you the good and bad points of each plan.

How to Lower Risks How you deal with risks depends on the plan you take. Direct ISPs must get backup gear and DDoS safety to keep downtime low. Resellers, in contrast, must keep good ties with many big providers, work out clear deals, and talk well with buyers to fix big problems fast.

When to Make Choices A lot of ISPs start as resellers to learn about the market before they change to a direct ISP plan. This way makes it easier to begin in the market and lays a base for growth in the long run. With smart planning, a reseller job can at times do better than a direct ISP job, more so if the last isn't done right.

Conclusion: Making the Right Call

Now that we know the key points, it's easy to see that your pick of a reseller or an ISP straight from the source fits your business aim, means, and real world facts. Both ways have upsides, yet the right move leans on how your way feels to you.

Key Points to Take

Know your market. How much money you make can hang on how many people live close. Direct ISPs do well in spots with many folks to cover costs for big setups, while resellers work better far and wide by using what is already there. Think on where you are and who you plan to sell to.

Know-how is key. To run a direct ISP, you need deep tech skills - think big on routing, laying fiber, and 24/7 upkeep. If you're short on skills, ready to pay a lot to learn or hire, which can dig into your earnings.

Check the costs. Running a direct ISP means more money up front and as you go. But resellers skip these costs yet must deal with always changing prices and deals to stick to. Think hard on your cash at hand and money plans for the future.

Clients want different things. Work clients look for no-fail service, fast fixes, and much net space - good points for direct ISPs[11]. Home clients might want better deals and packs. Serving right can make big changes.

Ways to grow differ. Direct ISPs pick how they grow and what they offer, while resellers must work within what they get from up top. Pick if you need room to try new things or are okay in a set way with others.

With the ISP world worth $300 billion and rising 6% each year[12], both choices have lots of room to win. The trick is to pick what fits your means, skill, and place to do well.

What to Do Next

Ready to start doing? Here’s what to do:

Look at your tech skills, cash, and market scene. If you're good at talking to customers and selling but you don't know much tech, picking a reseller might get you going fast.
Check out your local spot. Know what others offer, what clients don't like, and find places you can shine.
Begin small, then grow. Many ISPs start as resellers to get known, earn trust, and pick up on the market before they go all in. This step-by-step way cuts down risks while getting ready for more.
Make your work smooth. Whether as a reseller or a direct ISP, using smart tools and data can boost your work and raise profit by up to 20%[12]. Put cash in systems for bills, managing clients, and watching your network to keep on top.
Build strong ties. You should choose to work with wholesale groups that have clear prices and good help. On the other hand, ISPs should team up with makers of gear, local rulers, and local groups.

With many people leaving the field each year, making your old customers happy is as key as getting new ones. Try to give top service, keep prices fair, and always be there to help to keep them close.

The WEIRDTOO Company