The used mobile phone market is affected by technological change at multiple levels. The most basic effect is on the product offered: new devices are continuously being released, aging into the used market, and becoming sought after by new customer segments who now find them affordable.
While Apple has stuck to its annual release cycle for the iPhone, the Android competition is more fragmented and releases new products all year round. Used device wholesalers must track these product releases to predict when trade-ins will be made and determine how pricing on existing used inventory should be adjusted when newer models become available.
The mechanics of the wholesale cellphone distribution business are rapidly evolving. From inventory management and sales to warehousing techniques and shipping, dedicated software is replacing generic spreadsheets and manual processes of all kinds. These new software tools for device wholesalers increase efficiency, reduce the complexity of the business, and deliver better profit margins.
It’s an exciting time for used phone sellers to be in business. Markets are growing, innovative devices keep coming, and now the tools of the trade are markedly improving, allowing sellers to reach customers with greater efficiency than ever before.
Workflow Optimization
The warehouse is at the center of the wholesale device business. It’s where devices from suppliers arrive and are sorted, graded, stored for sale, and dispatched for shipment to a customer.
Today, new technologies are transforming the warehouse. Process automation, mobile data tracking, and integrated software such as Enterprise Resource Planning (ERP) or Warehouse Management Systems (WMS) make it possible to track and trace a device from its arrival at the warehouse to its departure to a customer. Radiofrequency identification (RFID) tags can be configured so that your WMS is automatically updated as devices are moved around the warehouse, meaning your warehouse workers have a real-time map of where goods are located, speeding up the picking process.
The future of workflow optimization for device wholesalers is automation and artificial intelligence. The day is not far off when a combination of basic robotics and machine vision will allow wholesalers to intake and grade phone shipments without passing them through human hands. The software for vision assessment of device quality (machine vision) is advancing rapidly and will doubtless become practical as a first-pass system within the next few years.
Of course, such futuristic technology comes with a large upfront price tag — wholesalers must determine whether they have the capital and sales volume to justify these large expenditures. In the long run, though, the businesses that have invested the most in automation will save the most money through reduced labor costs and increased efficiency.
Distribution Channels
The modern wholesale business owner must take advantage of a variety of distribution channels, employing online B2B sales, online marketplaces, directories, and outreach to brick-and-mortar operations. In 2023, the central sales touchpoint for all your operations should be your own website: This is a web property that you completely control and can design from the ground up to maximize positive impressions of your business while guiding buyers into purchasing from you in an ideal manner. Whether you ultimately want to close deals over the phone or through a completely online process is up to you. A great website acts like a 24/7 salesman who’s always on their game and always selling. With software services that offer a turn-key web presence, there’s no excuse not to be online under your own branding.
Beginning wholesalers often get their start listing devices on online marketplaces like eBay, Swappa, and Gazelle. Listing on these marketplaces can be an effective method for bootstrapping your business and learning how to identify and price phones so they move quickly. The downside to online marketplaces is that the competition is fierce, making it hard to stand out in the crowd without continuously eroding your margins.
Marketplaces can be a good training ground as you establish your business processes for purchasing, grading, and shipping devices, but be careful not to let the convenience of the marketplace trap you in a low-profit position. As soon as you’re able, transition to selling through your own website and through a dedicated B2B sales team.
Data Reporting
One of the wonders of the modern wholesale business is how much of your operations are quantifiable. If you have the tools to collect it, data on every aspect of the business is available like never before, from grading to sales to shipping. The wholesale executive can summon exhaustive reports on pricing trends, demand prediction by device and geography, and more.
With all these numbers flying around, the challenge becomes deciding what your analytics priorities are. Where in your business do you see the lowest-hanging fruit? Do specific processes stand out as inefficient? Check your intuition and then do a deep dive into the data.
One particularly valuable metric to track is inventory turns. An inventory turn measures how long a device spends in your possession before being sold. The quicker your turns, the more profitable your operation. For an in-depth treatment of this metric, see this article.
A process overhaul focused on one aspect of the business is the key to making your metrics matter. Select an area of focus — such as time spent grading — and run a historical report, tracking how much time you spend on devices of different grades, whether this time varies by employee, and whether devices at every grade sell over a given timeframe.
With this information in hand, consult your employees to ask whether they see room for process improvements. Line workers often have insights into their day-to-day tasks that are invisible to management. Between your boots-on-the-ground information and your high-level data, it’s a virtual certainty you’ll find room for process improvement.
Technology is essential for wholesale cellphone distributors to stay competitive. Automation, data-driven decision-making, and diversified distribution channels are all important. Robotics and AI will play an even bigger role in the future.