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WHOLESALE SECOND HAND PHONE BUSINESS: WHAT YOU NEED TO KNOW

Mar152019
Business second hand phone business

If you do second hand phone business.  Congratulations!  You are in a good industry.  The demand for used mobile phones is increasing, as the cost of new devices and their upgrades skyrocket. According to data gathered from all major research agencies, the second hand phone market boomed to a whopping $19.7 billion (approximately $20 billion) in 2017, and experts still predict a meteoric rise in coming years, as the industry is expected to be producing about $38.9 billion, by the year 2025. A consulting firm by the name of Deloitte also predicts that at least 10% of phones produced or purchased in 2016, will still be in use by the year 2020 by ‘second or even third-hand’ users. The business model is still an emerging one, as it makes up for less than 10% of the entire market; however, it is quickly gaining traction.

The $20 Billion Industry; Why Sell Second Hand Phones?

While the global smartphone market witnessed a massive decline in sales (between 5 – 9% in the last quarter of 2017), the second hand phone market climbed up by a vast 13% (which equals about 140 million units changing hands per year!). As mentioned earlier, this is due to the cut-throat prices of new smartphones, combined with a rise of third-party repair stores and a high demand for second hand phones, especially in developing regions such as Africa, South-East Asia, and India, where the population, as well as penetration of phones, is high.

If predictions carried out by researchers are correct, then the used or refurbished smartphone market will increase with a compound annual growth rate of 22.3% between 2015 and 2020, increasing the number of second hand phones in circulation from 81 million in 2015 to an estimated 222 million in 2020.

Building Your Profile and Inventory

When hoping to start a used phone wholesale business, it is essential first to procure a wholesale license. This requires that you look into what the wholesale license requirements are in your state or country. Once that is done, the next step is to identify products with a high retail potential in your region. This includes popular brands consumed in your region and smartphone models that are in high demand. The next step is to identify your potential customer base to enable you to reach and serve them better.

Leveraging the internet to build your business and increase your reach is also a good option. When creating an online profile for your business on a platform such as LinkedIn, for example, be sure to use professional looking photos, an interesting and search engine optimized introduction, and display your skills, accomplishments, and recommendations from previous customers, as research shows that 88% of people trust recommendations.

You should also strongly consider developing a logo and using showcase pages to highlight a particular incentive or speak to individual buyer personas. Creating a profile in more than one language may also be helpful.

The Art of Wholesaling

Simply put, the job of a wholesaler is similar to that of a retailer; the only difference is that while a retailer works in business to person realm, the wholesaler works in a business to business realm. The total sales from wholesale distributors in the U.S amount to about $3.2 trillion and the field is one which requires good negotiation skills, an eye for emerging trends, excellent managerial skills, and clever salesmanship.

The science behind wholesaling is to obtain the product at a low price and make a profit on sale in a deal which is still attractive to the customer.  

Tips on How to Make Profit

The first step is to evaluate your finances. This will determine the scope of your business. Next, draw up a business plan to provide a strategic and clear vision for your business. This plan should include a detailed analysis of the used phone marketplace. You should then develop your virtual and real-life presence and determine how your business will reach intended customers. With that done, you must take care of legal requirements, find suppliers and consider creative ways to improve your marketing and pricing strategy to find and keep clients. Also, providing not to old used phones can put you ahead of your competition.

Conclusion

The wholesale second hand phone business is one which continues to grow despite initial skepticism. The market, if predictions are correct, is further expected to grow exponentially, as ‘second-hand’ devices steadily account for a more significant percentage of the smartphone industry. With such appealing predictions throughout the next five years, what better time is there to get in on this massive business opportunity than now?

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