Investors Give RadioShack a Second Chance
Maybe now they can afford to close those stores...
Then they can stop making so many bad SWAT sales that they know are going to be returned in a day or two when the phone they really want comes in stock.
Its bad sales and cellular returns that are killing radio shack, if they had their cellular game tight nothing else would matter, one fully qual'd new activation makes more profit than everything else they sell in the store that entire day. And the opposite is also true for returns, one return kills the stores profit for the day.
If someone activates a new line of service and gets the phone, but never pays the bill, then the carrier will not pay radioshack. Which means that $600 phone we gave for $0 but will receive $1000 from the carrier just turned into a $600 lose. To make it worse, the window is up to 6 months with some carriers.
I'm pretty sure their networks are paid for... many times over. Every monthly service fee paid to a carrier is pure profit. So, they make money right away.
In this statement you can only be referring to the loss taken BY THE CARRIER on a subsidized device. But we all know that a substantially large number of new activations happen through 3rd party vendors, in which case the carrier not only assumes zero risk but also makes an additional PURE profit from the ETF.
I'm not convinced that mega rich corporations that made their fortunes on cellular contracts are now about to lose their shirts on them.
>>but for every customer who fulfills a 2 year co...
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There is no way the networks are paid for, they are constantly working to improve and expand their networks (even if it doesn't seem like it with some carriers) weather it be through tower repairs, expanding LTE, etc.
How do you figure monthly service fees paid to a carrier are pure profit? You know how a business is run? There are operating costs, you have to pay for utilities, leases on stores/office buildings, inventory management, and the biggest expense of them all by far, employees. Even if you're referring to only the network itself there is still maintenance costs, elec...
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It's simple economics really. I decide I want to open a lemonade stand. So, I go to the local government and convince them how awesome it would be for the community to have my lemonade stand. I secure a bunch of tax incentives and government subsidies and then I build my lemonade stand for cheap. My business takes off and I amass the wealth to acquire a virtually limitless supply of lemons. I build and automate a factory to squeeze lemons into cups for my stand.
Initially my factory cost me a great deal of money. But the markup on my lemonade is so ridiculously high that I've paid for the entire operation within a couple years. ...
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With there being competition, if cell carriers were that profitable, for one, cell service would be dirt cheap from carriers continuing to better the competitors price, and for 2, there wouldn't even be discussions about carriers buying other carriers out because who would want to sell a company that's pure profit and has no expenses?
I doubt that's true of wireless carriers.
>> There is no way you can put enough cash reserves away to indefinitely cover that and all other operating expenses.
That's certainly true of small business.
>>I have actually ran a business before and believe me, there is much more to it than you think.
I have too. So, I know what's involved. My example was an analogy and simple by design. I realize it's not an exact example of the real world. I also realize that wireless carriers have operational expenses that go beyond their cash reserves. And pure profit is probably only theoretical in nature.
My point was that wireless carri...
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They are constantly improving and upgrading the network, constantly doing maintenance, and constantly doing research to create the next generation of network technology.
There is no such thing as the network being 'done'...
If we ever reach a point where 'the network is fully built and paid for' and nothing more needs to be done then one of three things is true:
Either
1. The wireless industry is dead
or
2. The wireless industry is dead
or quite possibly
3. The wireless industry is dead
The network is NEVER going to be finished, ever, the day they stop ...
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Exactly, one of the major things to know about running a business is that the minute you decide you're at where you need to be and stop improving is the same minute you get passed up by your competitors.
That's not what I'm trying to say and you know it. I can only assume you have read the rest of the thread with Brad K. So, it's a little dishonest for you to misrepresent what I'm trying to say.
If I asked you if your car was paid for would you say, "no," because you knew you were going to be putting gas in it every week and that it would eventually have some maintenance costs? Or would you say, "yes," because you had made the last payment to the bank and the car was officially yours?
Likewise, the carriers had an initial investment to build out their networks. And I maintain t...
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Contracts were introduced ini...
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In the case of third party vendors, they are. And that is what I stated in my previous post.
>>Most new activations and upgrades still go through the carrier, either at the stores or over the phone or website ordering
I'm not willing to accept that statement without some factual numbers to back them up. I find it hard to believe that Best Buy, Walmart, Target, Amazon, New Egg, Tiger Direct, and a plethora of other third party retailers find it profitable to sell third party cellular service if the majority of activations go through the carriers. Especially considering that every single source I just named consistently has better deals than the carrier branded stores.
>>Moreover, even whe...
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So of the 2 carriers I've been involved with, neither of them made the Agents eat the costs of subsidized devices.
The only place where we got any kind of a deal was one of the carriers (T-Mobile I think), let us keep like half of the deposit.
Its is difficult to get many of these 50+ year old mangers to embrace the turn around from just box retailer to cellular activations, which should be their focus. Then they started hiring a ton of first time employees with no experience, to be trained by a manager with no real sales experience, and they dont have a clue about selling phones, qualifying customers, overcoming objections, compare and contrast, and closing the sale. Its typically like, Oh you want that?, okay let me call somebody to see who we do that. Then the activation ta...
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This forum is closed.