The cellphone market is about as saturated as it could ever get. Not only do 96% of Americans already own a cellphone but market penetration for those in the upper-middle class or higher is 100%, according to Pew Research. This is actually good news for cellphone manufacturers, carriers and stores because Americans will replace their cellphone every two to three years on average.
Deciding What to Sell
Before you can even think about selling cellphones, you will need to decide what you are going to sell. To sell cellphones with cellphone plans, you will need to contact the carriers and fill out a reseller application. Depending on the carrier and the projected scope of your business, you may be signing up with the carrier directly or through a distribution agent.
In addition to selling phones from cellphone carriers, you also have the option to sell phones without carrier plans for those who just want a new (or used) phone to use with their current plan. Most of these stores, however, sell other electronics in addition to cellphones. Another option for those who are handy with electronics is to offer repair services for people who have broken their phone but don't have a warranty.
Regardless of what kind of phones you want to sell, don't forget to look into accessories. In fact, there are many stores today that sell only cases and other accessories. Depending on where you source your cases, you may find that the profit on these exceeds what you may get from selling phones.
Understanding the Cellphone Market
When it comes to cellphone carriers, there are literally dozens of companies from which you can choose; however, there are two classes of carriers for which you need to be aware of the differences. The largest carriers, including AT&T, Sprint, Verizon Wireless and T-Mobile are known as major carriers in that they own the networks from which they operate.
All of the other carriers are known as mobile virtual network operators because they do not own their own cellular networks. Rather, they sublease the networks owned by the major carriers. These companies, like Cricket Wireless or Virgin Mobile, aren't as common compared to the major carriers.
In addition to knowing the differences between an LG phone and an iPhone, customers will expect you to be an expert on the differences between the different carriers, including how mergers and emerging technologies like 5G will affect their cellphone plans and choices. Not only will you need to know what happens nationally but you should understand your local market, such as which carriers tend to have better coverage in your region.
The Business of a Retail Business
Regardless of what you're selling, opening a retail store requires a huge amount of planning. You will need to select a good location, research your competitors, design the storefront, come up with a name and raise the capital you will need to cover your startup costs and your first several months in business.
On the business side, you will need to create a business entity, such as a LLC, partnership or corporation. You'll also need to register your business with your state and either your city or county government as well as with the IRS to get an employer identification number.
Most states usually require that you have an employer identification number before you can register your business for state taxes. Many cities and states now have a one-stop shop to find all the forms you will need to fill out before opening a new retail store.