One Option : Outsourcing Inventory

By Joseph Palenchar On May 2 2011 - 4:01am

NEW YORK — For retailers interested in maximizing cellular profit, “the best case is running it yourself,” said Brightstar’s Sally Lange, but do-ityourself retailers assume the cash-flow risks and the risk of “managing so many moving parts.”

To help retailers minimize the potential downside, Brightstar a few years ago launched a virtual inventory program in which dealers display a wide assortment of handsets from all major carriers, plus accessories, but Brightstar keeps all inventory in its facilities until a sale is made. “The dealer takes ownership once they sell it to a consumer, and we ship to the consumer’s home,” Lange explained. Mom-and-pop stores and some regional retailers are taking advantage of the program, she said.

Whatever strategies that retailers pursue to launch or expand in-house cellular departments, Wireless Zone’s Sinclair isn’t convinced they’ll be successful running it themselves. “I can’t see how a person who runs a CE store or other type of store that is not core wireless can manage it with the amount of changes that come every day of the week, especially if they sell multiple carriers,” he said. A new 4G smartphone requires 45 minutes of training on the phone and its plans, he said.

“You have to focus on it as a core competency. You can’t dabble, or the customer will get confused and aggravated.”