Most MSPs get their first taste of voice revenue through a commission check.

A vendor sets the price, the MSP makes the introduction, and a few weeks later a check shows up for a slice of whatever the vendor decided to charge.

It feels like free money right up until the MSP realizes it has no say in the price, no say in the packaging, and no say in what happens when the vendor raises rates on its client.

A VoIP reseller buy rate flips that arrangement.

The provider sets what the MSP pays. The MSP sets what the client pays.

Everything in between belongs to the MSP.

This guide explains what a buy rate is, how it compares to commission and white label models, the specific benefits it gives an MSP, and the traps to check for before signing any buy rate agreement.

AI Summary

A buy rate is the wholesale price a provider charges an MSP for each phone seat or service.

The MSP sets its own sell rate to the client and keeps the difference, called the spread.

Compared with an agent commission, which is usually a fixed 10% to 20% of a price the vendor sets, a buy rate gives the MSP control of pricing, packaging and bundling, and the margin grows with the value the MSP delivers.

Compared with white label, a buy rate through a carrier of record that bills the client keeps the MSP from becoming the provider of record, so the carrier handles FCC filings, telecom taxes and E911.

The result is higher margin without the regulatory burden.

What Is a Buy Rate?

A buy rate is the price a provider charges a reseller for a service, before the reseller adds its own markup.

In VoIP and UCaaS, it is usually a per-seat monthly price, sometimes with separate buy rates for phone numbers, add-ons or hardware.

Three terms show up in every buy rate conversation:

• Buy rate: what the MSP pays the provider per seat or service
• Sell rate: what the MSP charges its client for the same seat or service
• Spread: the difference between the two, which is the MSP’s margin

A simple example, with numbers for illustration only: if the buy rate on a seat is $15 and the MSP sells it for $25, the spread is $10 per seat per month.

On 300 seats, that is $3,000 a month in recurring margin that the MSP priced itself.

The key word is itself. Under a commission model, the vendor picks the $25 and hands the MSP a percentage of it.

Under a buy rate, the MSP picks the $25, or $28, or bundles the seat into a managed services package where the phone line never appears as a separate number at all.

Buy Rate vs. Commission vs. White Label (Agent vs. Reseller)

MSPs that add voice generally choose between three models. The differences come down to who sets the price, who bills the client, and who carries the regulatory weight.

	Commission (agent)	Buy rate through a carrier of record	White label
Who sets the client’s price	The vendor	The MSP	The MSP
Who bills the client for telecom	The vendor	The carrier	The MSP
Provider of record	The vendor	The carrier	The MSP
FCC filings, USF, telecom taxes, E911	The vendor	The carrier	The MSP
Typical margin	10% to 20% commission	30% to 40% spread	Highest gross margin, before compliance costs
Who owns the client relationship	Mostly the vendor	The MSP	The MSP
MSP workload	Lowest	Moderate	Highest

Commission is the easy button. The MSP refers the client, the vendor sells, bills and supports, and the MSP collects a percentage. It requires almost no work, which is exactly why it pays so little and gives the MSP so little control.

The vendor owns the relationship, and the MSP is one price increase away from an uncomfortable client conversation it had no part in.

White label sits at the other extreme. Many programs marketed as a “VoIP reseller program” are actually white label platforms: the MSP buys service, rebrands it, and bills the client under its own name.

The gross margin looks great, but billing the end user for telecom makes the MSP the provider of record, with every federal, state and local filing, tax and 911 obligation that comes with it.

The Techmode guide to white label VoIP for MSPs walks through that compliance stack line by line.

A buy rate through a carrier of record is the middle path. The MSP sets the price and owns the relationship. The carrier bills the client at the MSP’s price, handles the telecom compliance, and pays the MSP the spread.

The MSP gets most of the upside of white label without inheriting a second career in telecom regulation.

The Benefits of a VoIP Reseller Buy Rate

1. The MSP Controls the Price

This is the big one. With a buy rate, the MSP decides what the client pays. That means pricing can reflect the MSP’s market, the client’s size, the level of service included, and the value of the relationship, rather than whatever the vendor’s price sheet says this quarter.

Pricing control also means pricing flexibility.

An MSP can offer a lower seat price to win a strategic account, charge a premium for a client that needs white-glove attention, or hold pricing steady through a multi-year agreement.

A commission partner can do none of that.

2. Margin That Grows With the Value Delivered

A commission is a fixed percentage of someone else’s price. A spread is whatever the MSP can justify.

When the MSP adds onboarding help, user training, network readiness work or Tier 1 support, it can price that value into the seat. The margin grows as the service grows.

Most Techmode partners see 30% to 40% margins on a buy rate, compared with the 10% to 20% typical of agent commissions.

The Techmode breakdown of how MSPs make real money on VoIP shows the per-seat math in more detail.

3. Voice Can Be Bundled Into Managed Services

A buy rate turns phone service into an ingredient instead of a separate line item. An MSP can fold voice into a per-user managed services bundle alongside endpoint management, security and backup, then price the bundle as one number.

Clients compare bundles far less often than they compare seat prices, which protects margin.

Bundling also changes the sales conversation. Instead of “here is a phone quote,” the MSP offers “here is everything the team needs to work, for one monthly price.”

The guide to building a profitable UCaaS offering covers Good, Better, Best packaging in depth.

4. The MSP Keeps the Client Relationship

Under a commission model, the vendor sells, the vendor bills and the vendor supports.

The client eventually thinks of the vendor as its phone company and the MSP as the company that made an introduction once. That is not a strong position at renewal time.

With a buy rate, the MSP sets the price, leads the sale and stays the client’s first call.

The phones become one more reason the client depends on the MSP, which is the whole point of adding voice in the first place.

5. Recurring Revenue That Sticks

Phone systems are among the stickiest services a business buys.

Once call flows, auto attendants and numbers are configured, very few clients want to do it all again for a few dollars a seat.

A buy rate turns that stickiness into recurring margin the MSP controls, month after month, for as long as the client stays.

6. No Provider of Record Burden

This is where the type of buy rate matters. If the MSP pays a buy rate and then invoices the client for telecom itself, it has effectively built a white label model and taken on the compliance stack that comes with it: an FCC Form 499 Filer ID, Universal Service Fund contributions, a Robocall Mitigation Database filing, E911 obligations, and state and local telecom taxes.

When the carrier of record bills the client at the MSP’s sell rate and pays the MSP the spread, those obligations stay with the carrier.

The MSP gets pricing control without becoming a phone company. That distinction rarely shows up in a partner program brochure, and it is worth asking about directly.

7. Pricing Changes on the MSP’s Terms

Commission plans change when the vendor decides they change. A buy rate puts the MSP’s own pricing decisions back in its hands.

If the MSP wants to raise prices at renewal, add a premium tier or run a promotion to win a competitor’s clients, it can do so without waiting for a vendor to update a commission schedule.

How to Set a Sell Rate on Top of a Buy Rate

Pricing control is only a benefit if the MSP actually uses it.

Too many partners take the buy rate, add a round number, and call it a strategy. A sell rate works better when it is built from what the MSP delivers, not from what the provider charges.

A practical approach looks like this:

• Start with the fully loaded cost. The buy rate, plus any per-number, add-on or hardware charges, plus the MSP’s own time for onboarding and Tier 1 support.
• Price the service level, not the seat. A seat that comes with the MSP’s help desk, user training and network monitoring is worth more than a bare seat, and the price should say so.
• Check the local market. Know what the big-name UCaaS providers charge once their fees are added in. Many MSPs discover they can price above the advertised seat rate and still come in below the real bill.
• Leave room for growth. Price add-ons such as call recording, AI features or contact center seats separately, so clients can grow into them without a renegotiation.
• Set a renewal plan. Decide up front how pricing will change at renewal, so a buy rate increase never turns into a margin surprise.

The goal is a sell rate the MSP can explain in one sentence: what the client gets, and why it is worth the price.

If the MSP can’t explain it, the client will compare it to the cheapest seat on the internet instead.

What to Check Before Signing a Buy Rate Agreement

A low buy rate is not automatically a good one.

Some providers advertise an attractive seat price and recover the difference everywhere else.

Before signing, an MSP should get clear answers to these questions:

1. What is included in the buy rate? Features, AI tools, call recording, mobile apps and support tiers vary widely. A cheap seat that needs three add-ons is not cheap.
2. What is billed separately? Phone numbers, porting, toll-free minutes, fax, SMS and hardware can each carry their own charge.
3. Who bills the client? If the MSP sends the telecom invoice, the MSP becomes the provider of record.
4. Who collects and remits telecom taxes and fees? On a carrier-billed buy rate, the carrier should calculate and collect them based on the client’s location.
5. Can the buy rate increase mid-term? Some agreements let the provider raise the buy rate while the MSP is locked into a fixed sell rate with its client.
6. Are there minimums or clawbacks? Seat minimums, volume tiers and commission clawbacks on early cancellations can quietly erode the spread.
7. Who supports the client? Confirm what the provider handles, what the MSP handles, and whether the MSP can choose.
8. How and when is the spread paid? Payment timing and reporting should be clear before the first deployment.

As with any agreement that touches telecom regulation, it is worth having a telecom attorney review the contract before signing.

The Taxes and Fees Still Show Up on the Bill

One point catches MSPs off guard. A buy rate sets the price of the service, but telecom taxes, 911 fees and regulatory charges are calculated on top of that price based on where the client’s phones are located.

Those charges are not part of the spread, and they vary from one city or county to the next.

That matters for how the MSP quotes. A client that hears “$25 per seat” and then sees a bill with federal, state and local charges on it will have questions.

The best practice is a fully loaded quote that shows the seat price and the expected taxes and fees separately, so nothing on the first invoice comes as a surprise.

The Techmode guide to hidden taxes and fees in a UCaaS quote explains what each charge is.

When Commission Still Makes Sense

A buy rate is not the right fit for every MSP or every deal. A straight commission can still make sense when:

• The MSP truly wants nothing to do with phones beyond the introduction
• The deal is a one-off for a client outside the MSP’s normal market
• The MSP has no interest in pricing, packaging or supporting voice

For an MSP that wants voice to become a real part of its business, and wants to own the client relationship, a buy rate is usually the better long-term model.

The guide on how to start offering VoIP as an MSP covers the delivery models and launch steps side by side.

How Techmode Handles It

Techmode’s MSP program is built on a buy rate through a carrier of record. The MSP buys TechmodeGO at a wholesale buy rate and sets its own sell rate and packaging.

Techmode, as the CLEC and carrier of record, bills the client at the MSP’s price, calculates and collects the telecom taxes and fees, and pays the MSP the spread.

Most partners see 30 to 40 percent margins on VoIP and UCaaS seats, without ever touching an FCC filing.

Because Techmode is the provider of record, the regulatory stack stays with Techmode: the Form 499 Filer ID, Universal Service Fund contributions, the Robocall Mitigation Database filing, A-level STIR/SHAKEN attestation on every number, E911 setup and porting.

Every deployment starts with Premier Launch, Techmode’s white-glove installation, with a dedicated U.S.-based project manager and install team handling the build, the port and the cutover.

Each client runs on its own private instance on triple-redundant AWS infrastructure with backups to Google Cloud and a 99.999% uptime SLA.

After the sale, support follows whatever model the MSP prefers: keep Tier 1 in house, or send every ticket to Techmode’s U.S.-based 24/7 Concierge team (no offshore call centers), which carries a Net Promoter Score of 85.7 from over 1,000 post-support customer surveys against an industry benchmark near 31.

There is also no channel conflict.

Techmode only does telecom. It is not an MSP and does not sell IT services, so a Techmode partnership never puts a competitor in front of the MSP’s clients.

The Techmode MSP reseller program explains how to get started.

Frequently Asked Questions

What is a buy rate for an MSP?

A buy rate is the wholesale price a provider charges an MSP for a service, such as a VoIP seat. The MSP sets its own sell rate to the client and keeps the difference as margin. Unlike a commission, the MSP controls the client’s price and can bundle the service with its managed offerings.

What is the difference between a buy rate and a commission?

With a commission, the vendor sets the client’s price and pays the MSP a fixed percentage, usually 10% to 20%. With a buy rate, the MSP pays a set wholesale price and chooses its own sell rate, keeping the full spread. Buy rate margins often run 30% to 40%.

Does a buy rate make an MSP a telecom provider?

It depends on who bills the client. If the MSP invoices the client for telecom service, it becomes the provider of record with FCC, tax and E911 obligations. If the carrier of record bills the client at the MSP’s price and pays the MSP the spread, those obligations stay with the carrier.

Are taxes included in a VoIP buy rate?

No. Telecom taxes, 911 fees and regulatory charges are calculated on top of the sell price based on the client’s location. On a carrier-billed buy rate, the carrier collects and remits them. MSPs should quote these charges separately so clients are not surprised by the first invoice.

What should an MSP check before signing a buy rate agreement?

An MSP should confirm what the buy rate includes, what is billed separately, who bills the client, who collects taxes, whether the buy rate can rise mid-term, and whether there are seat minimums or clawbacks. Having a telecom attorney review the agreement is a smart final step.

Ready to Set the Price?

A commission check is a tip. A buy rate is a business. MSPs that want to own the price, own the client and skip the telecom paperwork can see how the Techmode MSP reseller program works.