Orange airtime distributor Mainline instructs dealers at seminars about implications of new Orange revenue share scheme
Mainline has held two seminars with dealers concerned about Orange’s restructured commission programme, and is to meet others individually to advise them on it.
Mainline managing director Andrew Boden said: “Dealers were anxious about how these changes are going to affect their businesses. We went through the commercials, explained the background to it, gave them margin examples and took them through how they could build ongoing revenue. They seemed to go away from it with a lot more encouragement and confidence.”
He said: “The idea behind individual meetings is we can go through the dealer’s specific terms and see how this will impact on them.”
The new system sees Everything Everywhere pay Orange’s accredited third party resellers a 30 per cent share of customer revenue and a 70 per cent upfront commission. As with O2’s 100 per cent revenue share programme, third parties will receive a loan, or ‘true up’ to subsidise hardware in the first instance, which is repayable to Orange during the course of customers’ contracts.
But where O2 ‘loans’ a hardware fund based upon customers’ estimated spend and makes dealers liable for any shortfall, Orange has granted dealers a sum calculated to be 30 per cent of monthly line rental, for 19 months of a two year deal. The theory is the only risk of clawback to Orange dealers is if customers disconnect or fail to pay bills.
The fee is paid in full on connection, and dealers are required to repay the find in 19 monthly instalments.
Mainline held its first seminar at its head office in Burton on Trent in Staffordshire on the restructured programme’s launch date, July 1, and another in Glasgow on July 6. Around 40 dealers attended and there are plans to meet further dealers on a face-to-face basis in the coming days.