Private Label vs. Brand Name Calling Cards

Why are the overseas calling cards that consumers see at most on-line retailers not available at any other online location or in-store. This is because many of these on-line calling card merchants have created private label calling cards. Do you ever notice that when you call your local access number for a calling card, the automated message prompts “please enter your pin”, rather than saying something like “Please enter your Bita Calling Card pin”? This is because many of these private label calling cards are run off of the same calling card platforms. Investing in the infrastructure to create your own truly non-shared private label phone card is expensive. High speed T2 connections a VOIP gateway and a calling card platform are all required. To own all of this equipment would cost approximately $30,000. In order to avoid these costs, many online calling card retailers rent this equipment. Below is a picture of how typical prepaid calling card architecture looks: Calling Card System

High speed T2 connections: These carry data to and from the VOIP gateway

VOIP Gateway: allows the incoming calls to be routed to the destination phone numbers via the internet.

Calling Card Platform: A system that manages cards you create. This is the system used to set your per minute rates and carrier routes.

Private label phone cards make their money by charging a premium on the “carrier rates” that they pay for the call. Carrier rates are like wholesale per-minute rates to a certain destination. For example, if the shared calling card infrastructure allows the private label calling card company to select a calling route from continental USA to Pakistan for 2 cents a minute, this same company may advertise this calling card at 4 cents a minute and thus, make 2 cents a minute. But wait…. there’s more: remember those hidden fee’s I talked about in my last post? Well that’s the kicker, calling card companies make a lot of money on the hidden fees. Most calling card platforms allow the private-label card maker to put any number of hidden fee’s on the card. It is for this—unregulated--reason that Phone Card Depot clearly outlines all fee’s on each card.

I haven’t talked much about brand name calling cards in this post, but we refer to these cards as calling cards created by companies that do not retail their own cards. For example, Group of Goldline manufactures many high quality calling cards, but a consumer cannot buy these cards directly from Goldline, you must buy the cards from a variety store or on-line retailer that sells their products. We think it is important for the retailer and manufacturer to remain separate. This is because a bias may develop to push private label cards over cards better suited to the user.

A big problem with most private label calling cards is that the manufacturer is completely unknown to the user and that the cards are pre-paid. Imagine if this manufacturer went bankrupt or even worse: decided to shut down this particular calling card and create a new one. You may be stuck with a pre-paid calling card that no longer works.

Regards,

Tavis McKenzie
GM, Phonecarddepot.com
http://www.phonecarddepot.com/blog