Research provided by Point Topic predicts the VoIP market will turn into a $40 billion industry by 2015. VoIP provides an easy and cost-effective way of exchanging voice and/or video over a single IP network, allowing for enhanced service at a minimal cost. Unfortunately, this positive aspect is becoming overshadowed by those wanting to get a piece of the pie.

The practice of white labeling, or reselling VoIP services, is consequently on the rise. Despite the popularity of VoIP white labeling, companies providing hosted VoIP services are urging companies to consider the hidden risks of white labeling VoIP by taking a “buyer beware” approach. Though many of these ‘imposters’ put up the illusion that they are selling a product with their own brand on it, they are in fact turning a profit on a product they will ultimately not support.

“Companies are easily tempted to resell white label VoIP because they are led to believe that this will help them to stay competitive and retain customers,” says One Stop Voice CEO Joshua Simon. “While a quick path to offering VoIP can seem enticing, company decision-makers need to realize that there are other key – and critical — factors to consider before jumping onto the white label VoIP bandwagon.”

Common white labeling risks include:

  • Customer service risks being compromised: The reseller is at a disadvantage for being able to effectively tailor a product or service to meet an existing customer’s unique needs. Rather than retaining the customer, a company may find itself at a greater risk of losing them due to lack of flexibility and potentially inadequate service.
  • Lack of control: When issues arise, companies want to provide their customers with immediate answers. White labeling can confuse the protocol, leaving all parties wondering who to call first. It can be unclear who is ultimately accountable to correct changes and implement the necessary improvements. This often results in the buck getting passed.
  • Inconsistencies can surface: Involving a third-party presents a greater risk for inconsistencies and may complicate rather than enhance the customer’s experience. Companies need to anticipate and prepare for inconsistencies the customer may experience due to a white labeling “hand off.”
  • Hidden costs may supersede financial gains: Hidden costs are prevalent with VoIP white labeling. Sales hours often get replaced by hours devoted to technical support and issues resolution.
  • Consider the legal liabilities attached: Most partnership carries legal liabilities and white label partnerships are no exception. Companies can find themselves at risk for violating their contractual obligations if the partner doesn’t hold up their end of the agreement. Ultimately one’s own company carries the legal and financial risk.

This is nothing new, as emerging technologies and products most typically attract third parties trying to ride that consumer wave. Sadly, many of these companies do not have the experience or expertise needed to provide/maintain quality service, and in turn, the consumer suffers – even though they are seemingly saving more than if they went with a major provider. This is an instance where you get what you pay for – alas, the consumer is paying less for likewise quality. While shopping around for a business VoIP or residential VoIP provider, do research not only on the service, but the provider themselves. It could be the difference between spending less in the short-term and saving money in the long-run

Note: only lists accredited VoIP providers on their site who back and support their product directly. We would never recommend or endorse any third-party provider no matter what the circumstance.

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