what is a sip trunk used for

Reseller 101: An Overview of SIP Trunking Basics

Despite recent reports of strong consumer spending, business owners are feeling the strain of a relatively uncertain economy. Many are taking steps to reduce their overhead costs to ensure their companies remain resilient and capable of weathering a sudden storm. After reviewing a few SIP trunking basics with their service providers, decision-makers who are frustrated with the escalating cost of installing, repairing, and upgrading their legacy business phones are switching to cloud-hosted solutions.

As the demand for simple, cost-effective business communication continues to rise, IT consulting firms, managed service providers, telecom agents, and other industry-adjacent professionals are taking notice. 

They’re partnering with SIP trunking platform providers, offering reseller arrangements to leverage their company as the solution to their clients’ pain points. Once you know what a SIP trunk is and where it fits into the communication equation, it’s easy to see why market analysts expect the SIP trunking sector of the telecom industry to maintain an impressive CAGR of 14.1% through 2031.

Learning SIP Trunking Basics: The First Step Towards Achieving Your Business Goals

SIP trunking platforms are helping small to mid-sized business owners slash their communication spending with one of the most cost-effective cloud-hosted telecom solutions. Not only are those decision-makers pleased with their newfound ability to manage their communication costs from a simple interface, but most are genuinely impressed by the way SIP trunking modernizes their business without having to invest in high-priced technology.

Resellers are reaping the rewards of providing an in-demand service without having to absorb the cost of developing, building, or maintaining a SIP trunking platform. Many were pleasantly surprised to learn they didn’t need anything beyond SIP trunking basics to help their clients find the best combination of solutions for their business. In fact, some of today’s most successful SIP Trunking resellers knew a lot less about the technology than you might expect before joining forces with an established service provider.

But we have no intention of leaving you in the dark. Before you can decide if taking on the role of a SIP trunking reseller is a step in the right direction for your business, you’re probably wondering where it fits in the world of cloud-hosted communication and how resellers are leveraging their services to generate an impressive revenue stream.

What Are SIP Trunks?

SIP is an acronym, session-initiated protocol, for a non-physical structure that initiates the conversion of analog signals to a digital format. At its core, SIP is software installed directly into a communication network. SIP trunks function as a digital version of a private branch exchange (PBX): the hardware business owners need to connect their office phones to their public switched telephone network (PSTN). That entire explanation will probably make more sense once you know SIP trunking basics and how the technology compares to legacy phone service.

Related: The Future of Telecommunications: The Rise and Impact of SIP Trunking in Business Communication

Legacy business phones run on a complex network of physical wires and cables connecting a private branch exchange (PBX) with technology managed by a local (or regional) phone company. Each circuit assigned to a business supports 23 calls and one data channel simultaneously. Business owners are responsible for the cost of troubleshooting, diagnosing, repairing, and replacing their hardware. When a company experiencing a growth spurt needs more connectivity, they’re forced to absorb the cost of having a technician install an additional circuit and any activation fees charged by their phone company.  

With SIP trunking, there’s no need for business owners to keep a physical PBX on-site because session-initiated protocols take over for that physical gateway. Instead of transmitting incoming and outgoing calls over a complex “trunk” of copper wire and cables, voice signals are converted to a digital packet and transmitted over the internet. Once analog signals are converted to a digital format, a single SIP session can contain any combination of media.

How SIP Trunking Resellers Help Their Clients Save Time & Money

Many business owners are initially pleased with their ability to support remote workers and keep pace with consumer expectations by investing in services that compensate for the limitations of their legacy phone systems. But after reviewing their invoices, most find that the cost of maintaining their present course just isn’t sustainable. Their communication costs are increasing as overall productivity declines.

SIP trunking resellers help their clients save time and money by consolidating everything needed for modern communication into a single user-friendly, cost-effective platform. The use of more modern telecom solutions for their companies can result in substantial savings. 

By replacing traditional phone systems with SIP trunks, resellers help their clients cut unnecessary expenses and enhance their communication efficiency. Once they’ve explained the following SIP trunking basics and advantages to their clients, most resellers find that they’re providing services that essentially sell themselves.

Advantage #1: No Expensive Hardware to Purchase

Business owners concerned about mounting expenses probably won’t be willing to invest in costly hardware upgrades. With SIP trunking, there’s no need. All that’s required to get started is a high-speed internet connection, an internet-capable device, and the services you offer through your SIP trunking platform provider.

Business phones dating as far back as the 1990s are typically SIP-enabled. Older models are easily converted with an inexpensive analog-to-telephone adaptor (ATA). Even small business owners and entrepreneurs without the resources to invest in a PBX can take advantage of everything your cloud-hosted service has to offer. Since SIP trunking requires no physical infrastructure, they can get all the advantages (and functionality) of having a business phone system from any combination of PCs, laptops, tablets, and smartphones.

Advantage #2: More Control Over Communication Expenses

Business owners migrating their telecom service to the cloud find they have far more control over their communication costs. Instead of being bound to an inflexible contract outlining their obligation to pay for lines that are rarely in use or features they seldom need, they can add or remove active users from their accounts as business needs evolve. They’ll also have the freedom to choose the best combination of add-on services for their business.

As SIP trunking service subscribers, your clients can choose the best service bundles for their business. You’ll have plenty of add-on services at your disposal—business texting, toll-free minute packages, fax-to-email, and SimpleFAX™ over IP, for example—to boost your profits. With the right network provider, your clients will also have the advantage of real-time call data records (CDR) and the ability to integrate third-party applications into their communication interface designed to optimize workplace efficiency.

Advantage #3: System Security & Exceptional Dependability

Maintaining system security while managing disparate communication technologies remains an ongoing concern. Outdated technology, loose connections, and aging wires can cause poor call quality or disrupted service even for large companies with a full-time team of IT professionals on staff. Those disruptions can negatively affect consumer satisfaction scores, brand image, and profit margins.

With SIP trunking, your clients’ calls are private, and their systems are secure. Reputable SIP trunking service providers use the highest levels of encryption technology available. They have automated systems in place to detect and deter fraudulent activity. The best network partners have robust backup power systems on a georedundant infrastructure. If your clients’ internet services are interrupted for any reason, incoming calls are seamlessly redirected to an alternate number.

How Do SIP Trunking Reseller Arrangements Work?

There are several types of SIP trunking reseller arrangements. Their terms, conditions, and commission rates can vary considerably from one service provider to the next. In some cases, you could be working as an agent of your service provider, meaning you’ll be displaying their logo and business name alongside your own. Others offer white-label arrangements. White-label services allow you to upload your logo and contact information to your cloud-hosted platform and market the service as your own.

Related: SIP Trunk Basics: How To Start a Reselling Business

In either scenario, you own the customer relationship. The technical end of the arrangement is the responsibility of your service provider. But it’s important to understand the terms and conditions before signing on the dotted line. 

Some SIP trunking platforms charge hefty fees to offset the cost of reseller onboarding and training. Others keep their startup fees minimal but expect their resellers to commit to a long-term contract. If you’re contracted with a company that fails to deliver service that reflects positively on your brand, you could end up having to pay a substantial penalty to get out of the arrangement. It could take months, maybe even years, to see a return on your investment.

Instead, you’ll want to partner with a SIP trunking service provider that understands what resellers need to ensure long-term success. The best arrangements require no upfront out-of-pocket costs and reward your efforts with a generous commission on every sale. Look for automated billing, contract-free service, streamlined provisioning, and 24/7 support.

Could Reselling SIP Trunking Services Be the Business Opportunity You’ve Been Looking For?

SIP trunking forms the bridge connecting legacy phone systems and cloud-hosted telecom solutions. It plays a vital role in the standardization of voice, video, and data transmitted over the internet. The technology works in conjunction with other protocols to provide a flexible, low-cost alternative to legacy phone service. 

Some of the same SIP trunking platforms helping businesses slash their communication costs also make it remarkably easy for nearly anyone with a customer base to generate a consistent revenue stream with white-label SIP trunking platforms they can brand as their own.If you’re intrigued by the SIP trunking basics you’ve learned so far, visit SIPTRUNK to learn about our platform, pricing structure, commission rates, and automated billing system. If you’re ready to get started, sign up for a free reseller account. As a SIPTRUNK reseller, you’ll help your clients save as much as 60% on their communication costs while adding a recurring revenue stream to your bottom line.