Cell phones are a hot commodity. Only 15 or 20 years ago, they were luxuries reserved for movie stars driving fancy cars. Today, you'd be hard-pressed to find someone who doesn't have a cell phone. People have even cut out home land lines and opted to go with their cell phones as their primary number. According to a recent study by the CTIA/the Wireless Association, "the value of the combined mobile wireless voice and broadband productivity to the U.S. economy £98.3 billion half way into the year." Follow these steps and you just may be able to get your chunk of this billion-dollar pie.
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Things you need
- Cell phones
- Cell phone accessories
Choose your primary mode of operations. You can have your mobile phone shop set up online, at a physical retail location, or a combination of both. Review your market to determine which is the best option for you. If there is a mobile phone store in every shopping plaza in your city, it might not be a good business idea to open a physical location. The founders of Shopkami.com speak in favour of online mobile shops: "Cell phone shopping on the Internet gives consumers the increased advantage of easily comparing rates among several websites without doing the legwork up and down the high street." However, you do have to consider the amount of competition there is online. You could opt to go with a smaller physical location that drives traffic to your website and using your website to drive traffic to your physical shop. Research your market and weigh your options.
Consider buying into a franchise. Because of the amount of increasing competition, you may want to consider buying into a franchise. Consumers are choosing to stick with more established brands to avoid making the wrong choices. As a franchisee, you have the ability to piggyback on the established reputation and name recognition of the company. A franchise also helps you save on advertising because their advertising dollars benefit all associations. Wireless Toyz is a major mobile phone operation that has branched out from coast to coast. They also have financing available for business owners with limited capital.
Find a niche. There is so much competition out there, from franchises to forward-looking entrepreneurs to the mobile service carriers themselves, that you have to find a way to make it worthwhile. If you can't be heard amongst the clutter, you shouldn't venture into the mobile phone industry. Find a segment of the market that has a lot of demand that isn't being met. You could also cater to a certain buyer. You can cater to affluent buyers, teenage buyers, business women, etc. Find a concept that makes your mobile shop unique.
Plan. No business can be successful without proper planning. Create your business plan and make it clear what will make your business mobile shop successful and the steps you will take to get it there. Also develop a marketing plan, a system for managing your finances, and an exit strategy if the business doesn't go the way that you initially planned.
Get financing. All businesses need start-up money. Submit your business plan to potential investors. You can try to get financing through banks, commercial finance companies, private investors and even the Small Business Association. Even if you decide to open an online-only mobile shop, you will still need money for inventory. Your business model will determine whether you can just ask relatives for a few thousand dollars or you can ask your local bank for tens of thousands.
Get a master agent or sub agent. "There are two main types of mobile phone set-up: 1) pay-as-you-go; and 2) monthly contract," writes Viput Visitkul. Both will be the lifeblood of your mobile phone shop. To offer service, you will need a connection to the major cell phone corporations. Master agents are independent wholesale companies that serve as your liaison to the corporate cell phone companies. Your commissions for service activation are going to be made through a master agent or a sub agent. Some master agents stick to working with one wireless provider and others work with several. The master agent is essentially your contact person for getting commissions from mobile service providers, activation of services, phone inventory, and getting the necessary equipment for sales and operations.
Get phones and accessories. To makes sales, you need to get phones. You should only purchase phones that fit in line with your niche market business model. This will save on unsellable inventory. Accessories are probably where you will truly cater to this niche market. Young girls are more likely to purchase pretty, colourful cases, while business execs probably want a multipurpose, black leather cell phone carrier. Know your niche market and buy accessories that they want.
Get the right furniture and dummy phones. Following your niche model, furnish your store based on your chosen theme. If you are catering to business woman, why not decorate your shop with a casual lounge area where they can stop, sit and handle an important business transaction while you wait to serve them. If you are catering to teenage boys, don't buy any chairs, just have areas where they can play with the gadgets without interruption. Set up dummy phones for the more expensive phones that you don't want people touching. However, be mindful that the sale is often made by giving the customer the opportunity to handle the real phone. You can get phones from wholesalers as well as your master agents.
Handle your marketing and advertising. Franchisees have an advantage. The parent company does their own advertising for the benefit of the brand. So, the individual franchise doesn't have to pay as much to get people in the door. Independent business owners have to find ways to get people in the door. Use the methods that reach your target market. If you are catering to business women, buy advertising in the magazines that they read. If you are catering to teenagers, use Twitter and save on the advertising dollars.
Hire a sales staff. Most of your money is going to come through activations and your additional profits through upsells. Hire employees that are personable, know the industry and are not afraid to offer accessories confidently. If you are using an online-only model, find affiliate programs so that you can have others help you generate traffic to your site and make sales by offering a commission per sale.
How to Set up a Mobile Phone Shop
Tips and warnings
- Attend mobile phone trade shows to stay up on the latest developments in the industry and to get a heads up on your competition.
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- the value of the combined mobile wireless voice and broadband productivity to the U.S. economy £98.3 billion half way into the year
- Cell phone shopping on the Internet gives consumers the increased advantage of easily comparing rates among several websites without doing the legwork up and down the high street.
- There are two main types of mobile phone set-up: 1) pay-as-you-go; and 2) monthly contract.