So you want to become a prepaid cell phone store owner?
So you want to become a prepaid cell phone store owner? Well then, let me say welcome to this wonderful industry. Yes there can be tons of money to be made here if you do things properly and they're is definitely room for growth. With that said let's get into the steps that you need to get started in this industry.
1. Understand what kind of cell phone store that you want to open. There are 3 types of stores which you can usually open up in our industry. All 3 can very profitable, and all 3 require different types of investments.
a. Branded Prepaid Paid Store - These are stores that are exclusive to one carrier and are branded only for that carrier. They are not allowed to sell any other carrier or will be de-authorized and lose the capability to sell that carrier. As of this writing branded prepaid stores include, Criket Wireless, Metro PCS, Boost Mobile, Simply Prepaid by T-Mobile, Tracfone. They all have different programs, and require different levels of investment. With all carriers there must be an approval process, so it's not just "I want to open a cell phone store" and your going to get approval. Proximity to other like branded locations is taken into consideration and in some instances your experience.
b. Multi-Carrier Store - At this type of store you usually see as many carriers as possible being sold. Some locations add in TV services as well like DirecTV or DishNetwork. These locations can be very lucrative if done correctly as you can cater to any type of customer. If your customer walks in with a Sprint Phone, Verizon Phone, AT&T Phone, T-Mobile Phone, International Phone, doesn't matter what type of phone you can sell to them. You can not do that at a branded location. This can be a great thing as you will always have something to sell. There are many prepaid carriers that you can offer at this type of location including the 5 branded carriers mentioned above (pending approval). However, this type of location will be a little tougher to market as you are not using a national brand for your store name. You will be using whatever name you decide to give your business.
c. Cell Phone Repair Store - This type of location acts similar to a multi carrier. Why wouldn't it? You have customers from all carriers breaking their phones, might as well cater to all of them with prepaid services as well. However, prepaid services come secondary to the repairs. Repairs are very lucrative as you are usually making money on the parts that are being replaced and your service time to make the repair. This type of location can drive tons of traffic to your location, especially if you build a great reputation as a repair center. Repair centers usually are not just repairing cell phones, they repair all kinds of electronics like computers, tablets, game consoles, etc. You will need some experience in repairing and usually requires you to go to school for this craft. But if you are good, you will make good money doing this.
These types of locations usually require about $25,000 - $50,000 investment per location to get up and running. I will go into the pros and cons of these locations in a future article. Now that you have decided what kind location you want to open up it is time to contact the master agents and begin the process.
2. Find master agent/s to work with. Depending if you want to be a Branded location or a multi carrier/repair store will determine how many master agents you will work with. Do your research on these masters as once you select them you will be stuck with them. You can view our Master Agent List Here to get you started. As a branded prepaid store you will select one Master Agent for the Carrier you wish to work with and you will not be able to switch out. As a multi carrier/prepaid store I recommend you carry at least one carrier for each network. Some carriers like Rok Mobile and Red Pocket Mobile cover more than one network. Example: Rok Mobile can activate on Verizons and AT&T's network. Red Pocket Mobile can activate Verizon, AT&T, T-Mobile, and Sprints network. What will differentiate these providers is their offerings to the consumer and the commissions paid out to the dealer. Your master agent will set you up to take payments for the respective carriers. This is a must as you will make money on payments.
3. Location, location, location. This is very important to the success of you're store. First of all you want to make sure you are going to have the traffic to sustain your business. Every territory is different so make sure to do your homework. Secondly, plot your location to make sure that you will be approved for the carriers that you'd like to carry. This is extremely important if you are going to be a branded prepaid store. For as amazing as a location may look, and you could be licking your chops to get in there, if it's not approved you will have to move on to the next location.
4. Once you have landed on a location and master agents you will need to acquire a city business license and a state re-seller permit. At this stage it will also be wise to do some re-search as to what type of entity you would like to operate as. Would you be operating as a Sole-proprietorship, partnership, LLC, or corporation is completely up to you. Make sure to do your re-search and decide on something that will benefit your business.
5. Build out your location. There will be quite a few things that will go into you opening your store. Fixtures and signage are the first things you will need to buy. If you are going with a branded location you will have no option but to purchase what the carrier dictates you purchase for your location. If you are going with a multi-carrier/repair store you will determine your own store layout and signage. Security is key to protect your investments, some stores purchase alarms, gates for windows and doors, cages for their cellphones. In my opinion in any retail business security is a must to deter thieves. Determine your network setup and purchase hardware like computers, printers, and point of sale equipment.
6. Once you have built out your location you will need to purchase merchandise to sell. When it comes to a branded prepaid store you will buy handsets exclusively through them. As a multi-carrier/repair store you can buy handsets from as many vendors as you'd like to re-sell at your location. You can find a vendor list for handsets here. You will also need to carry accessories to sell at your location. Accessories are very profitable however make sure to purchase accordingly as you can get stuck with a lot of merchandise if you over spend or spend incorrectly for you market. You can find a vendor list for accessories here.
7. Looks like you are ready to open up shop. Now the hard work begins. How to get customers to your store? My advice to all retail locations is pretty simple. Provide the best service possible as word of mouth is the most effective type of advertising and the least expensive. You should also take a look at this article here and follow it and set up all as it is free marketing.
With that said, good luck in your new venture, and welcome to this amazing industry. Sound off below with any ideas, thoughts, or questions you might have.
Julio Castro
Wireless Dealer Group
IG @wirelessdealergroup
TW @wireless_dealer
