Five Operational Factors Every Wireless Reseller Should Keep in Mind
Before Podsix, we worked primarily in the wireless industry, both in repair and in the resale of pre-owned devices. We learned the hard way that in order to stay afloat in this industry, it is imperative to have rock-solid systems to support your Enterprise Resource Planning system (ERP). If used properly, ERP systems can manage every function of a business, from purchasing, inventory management and customer information, to sales orders, financials and much more.
Although the pre-owned device industry has been on the rise, the margins for the secondhand resale space of mobile devices has been shrinking over the last few years due to carriers and manufacturers shifting their focus to controlling more of the market. Despite thin margins, businesses in this industry have still found ways to make money by protecting their bottom line. They do so by ensuring efficiency and accuracy in five key areas (see below).
“My B-grade is their A-grade.” These are the famous first lines from every pre-owned phone vendor in the wireless resale space. If you are reading this blog post, you understand the subjectivity in device grading and the vast variety of different scales in the marketplace. You also understand there are hundreds, if not thousands, of companies out there that send out poorly-graded and even broken product. When we worked as a wireless reseller, we would see average return-to-vendor rates above 35%. We understood that this was part of doing business, but tracking and recouping these returns was one of the most important factors of keeping our bottom line positive. In addition, we also understood the importance of Vendor Scorecards and analyzing their product data to make better informed future buying decisions. It’s important to create a system that tracks each of the following:
- PO and batch testing audits
- Identifying the exact cost of products on a serial level
- Pre- and Post-Grading results with accurate fail notes
- Status-Based returns tracking as you move throughout contacting your supplier to getting credit
- Vendor-Specific credit tracking
- Parcel tracking tied to your returns system
- Multiple location management
- Dashboard visibility and financial reporting
Inventory Inaccuracies and Shrinkage
With the value of mobile phones increasing, managing and tracking inventory is a key driver in ensuring a profitable business. One way to accomplish this is to track the product’s specific IMEI or serial number throughout the lifecycle of the device in your system. That way, you can easily search for the device, find its history, and see where it is located in real-time. Perform a serial-based inventory count each month using the serial barcode scanning to ensure that you have a record of every device that moves in and out of your warehouse.
Processing: Efficiency & Accuracy
Depreciation and market demand are important factors in the pre-owned device industry. Devices depreciate faster than most assets while market demand is shifting almost daily based on new announcements and overall supply. The speed at which you turn your inventory is more apparent in this market than others. That being said, it’s incredibly important to create an integrated process solution that allows for efficient and speedy device processes. If you’re using a device diagnostic system like Phonecheck that lives outside of your ERP, you may be experiencing double the processing times due to dual data entry. It might be time to look into an integration that solves for this if that is the case.
Most wireless resellers use a system like Quickbooks to sell their inventory. This system unfortunately doesn’t ensure serial tracking at the order level or a barcode-scanning QC system to reduce shipping errors. One way to maintain these data points while reducing your order fulfillment times is to implement a location-rotating warehouse that allows for condensed physical inventory to reduce overall picking steps. An effective system would change item locations automatically based on projected sales numbers and identifying “hot sellers”.
The last piece of the device “trading” puzzle is the availability and accuracy of data points. Because there are a vast array of vendors, SKUs, grades, and overall product, the data points can be very large and hard to comb through. There are a number of data sets that a wireless reseller would want to review and tie back to the month-end financials for book accuracy. The following data sets are examples of what you should look at on a daily basis:
- Automated Google Drive inventory feed (by any attribute)
- Inventory value, by warehouse
- Inventory aging
- Return to vendor reports
- Supplier / Batch / PO Grade out reports / dashboard
- Sales by model, customer, inventory turn, etc
- Trending sales data (market pulse)
It can be pretty daunting as a wireless reseller to be able to implement and track each and every one of these suggestions. However, you don’t have to do it alone! Podsix offers a WirelessERP package that can be customized to fit your business’ goals. Download our case study to learn more, and be sure to reach out to us today for a free consultation - we look forward to helping your business grow!