Have you come across a new business that opened up only to close down a few months later?  Have you thought about what may have caused that business to close so soon after investing so much time and money?

According to Forbes, each year about 6.5 million new businesses come into existence.   Of these, a whopping 80% shut their doors within the first eighteen months.

One of the main reasons for business failure after inception is the lack of understanding of the challenges that lay ahead for a new entrepreneur.   Many aspiring-entrepreneurs fail to learn about, understand and prepare for the road-blocks they will have to overcome on that seemingly-glorious path to being a successful entrepreneur.  As the old adage goes, if you fail to plan, you should plan to fail.

Here, I will discuss a few common challenges faced specifically by Wireless Retailers.  The goal of this blog is not to list the challenges and discourage you from entering into wireless retail, but rather to educate and set proper expectations before diving into the often-desired world of cell phone retail.   And to facilitate your entry, I will also present ideas and suggestions  to help you meet those challenges as you plan to open your first wireless store and beyond.

1. Staffing:

Many new owners of “mom and pop” wireless stores, which are often run on skeleton crew, think that they will handle the operation themselves and therefore do not need to worry about staffing.  However, there will most certainly be times, such as doctor appointments and family emergencies or events, when you can’t be at the shop.  Also think about time off such as holidays or vacation when you’d want to be off but still have the store open to take care of your customers.   Lastly, any good entrepreneur enters into business with the hopes of growing and expanding.  And that is quite hard to do when the team consists of just you. You need a strong team in place to succeed and grow.  As the business guru Michael Gerber says in his book, the E-Myth, “if your business can’t run without you, you don’t have a business.  You’ve got a job.”   So, dear future-entrepreneurs, your quest to become a business-owner WILL require a super duper team of staff members.


Any experienced entrepreneur will concur that THE biggest challenge in business is finding the right people to work for you.   By right people, of course, I mean, hard-working and reliable people who will show up to work as scheduled, greet the customers with a big smile, get along with you and each other, go above and beyond the call of duty in meeting customer needs, meet and beat their sales goals and, most importantly, not put your cash in their pockets.  And that right there is a very tall order that you will have to constantly work on to fulfill.


a.   Pipe-line: Having a pipe-line of talented and qualified candidates for the job is crucial to managing and growing your wireless business.  Even if you don’t need any help now, it is wise to get started early so you will be able to hire the right people when you need them.  Remember, anyone you hire will require a ramp-up or learning period where they won’t be performing at their maximum capabilities and therefore you should hire far in advance of any anticipated surge in activities or time-off.  Visit your local college job fair to meet eager and willing job candidates.  Take and keep resumes from those who come to inquire “if you’re hiring”.

b. Plus-One: Maintain staffing at plus-one level, which means have one extra person beyond your normal needs. At any given moment, there should be enough staff on hand to accommodate your customers without having to wait more than a minute.  Wireless customers often want to do quick transactions, such as pay their bill or purchase a phone accessory and be on their way.  And given the level of competition many wireless stores have near-by; these customers are less likely to wait any longer than they have to before they take their business elsewhere.   Now, you may naturally be worried about the cost of having an extra person on your payroll.  Having extra help will allow you to engage your customers more than just processing their bill payments and demonstrate an upgrade to their phone and showcase the latest accessory for their device.  Read our blog “Sowing seeds to make the most of your slow hours” to learn ways to best occupy employees’ idle time.   Also see our blog on staffing for more on the cost-benefit analysis of having an extra person on hand.

c. Motivation and Compensation: If you thought finding and training the right people was hard, it is even more difficult to motivate and retain good workers. Motivating your workers comes with goal-based rewards system which earns them a set $ or % based on predetermined sales quota.  For example, in our stores, team members earn 10% of net profit on all items (excluding bill payments) IF they sell a minimum of 2 items per hour.  So a team member, who works 40 hours in a week, must sell a minimum of 80 items in order to qualify for the commission.  They get an extra $1 per hour worked if they can do 3 items per hour. Any less than the minimum results in loss of commission for that week and less hours for the following week.   Be sure to adjust the hour to sale ratio based on the busy-ness of your location.  CellSmart POS’s (The Right Tool, discussed below) employee commission module can assist you in keeping track of employee activities and commissions.

Goal-based reward system will keep employees motivated and earning better pay, which will also help in retaining good employees.  After all, you don’t want someone else to “steal” your fully trained staff members because of better compensation or benefits elsewhere.

 2.  Competition:

Wireless competition has been on a steady rise for the last decade or so, with wireless retail locations virtually on every city block.  And that doesn’t take into account many more wireless kiosks in malls, wholesale food clubs, and even at your local check-cashing joint.  Add to that the countless websites marketing to your customers with better prices and free shipping.  And even the wireless carriers themselves are targeting customers directly with lower phone pricing on their websites than the cost price they give to the dealers.  Boost Mobile has gone one step further and recently launched an Android app for customers, which among other ads, displays their own advertisement of phones at better pricing than available in the store. In exchange for downloading the app and watching commercials, Boost Mobile rewards the customer with $5 credit in their account each month.  And it’s the wireless retailer that is tasked with educating the customer about downloading the app. Talk about creating your own competition!  So, yes, there’s plenty of competition in wireless retail and they come in many different shapes and sizes.


a. Customer Service: While competition may be stiff, it is still possible to stand out from the crowd through a consistent focus on customer service.  While all the wireless stores around you may be offering similar phones, plans and pricing, you have a real opportunity to make a name for yourself by proving a level of service that is above and beyond the norm.  Customers love that extra touch of attention to detail and a sense of personal belonging that is lacking in most of today’s transactional relationships.  If you greet your customers with a genuinely warm smile, serve them while keeping their best interest, and not your bottom line, in mind and let them know you are their “Wireless Expert” whenever they need you, you’re on the right track to earning their business for a long time to come.  Read our blog on understanding the value of your customer to learn what one customer is truly worth.  (Hint: It’s more than the few dollars you’ll make on that bill payment.)  Then read our blog about growing your customer base, which again involves great customer service leading to customer referrals.  Yup, people are talking.  Talking about people… at your store.   Give ‘em something great to talk about!

b. The Right Tool:  To do any job well and in the least amount of time, you need the right tool.  Running your wireless store and staying ahead of the competition is no different and requires a custom made tool that will help you keep track of your customers, their lifetime spend and transaction history and allow you to stay in touch with them with text-messaging and follow-up tasks to increase return sales .  Point-of-sale software and systems available today have many useful features to help you manage and grow your wireless business.   Read our blog to further learn why you need a point of sale software.   Then, see why CellSmart POS is the best tool available in market to wireless stores today.

c. Focus on what matters:  Many wireless dealers often have so many wireless service options in their store that they are jack of all trades but expert at none.  If you are going to be a multi-carrier store or an exclusive retailer, select a carrier(s) that offer great phones and plans for your customers while giving you a decent and timely compensation, as well. (Stay tuned for our future blog on whether to go exclusive or multi-carrier.)   Be sure to stock your shelves with what’s important to your customers in the ever-changing world of electronic gadgets.  Simply, focus on what the customer wants. Focus on what matters. 

 3. Carrier Compensation:

You’ve most certainly seen just about every wireless retail location with those “Free Phone” signs enticing the customer to dump their current carrier and jump ship.  There are other offers for existing customers to upgrade their phone at a discounted price.  Besides the phone subsidy amounts that you expect to receive, there are also the activation and upgrade commissions, spiffs and residuals which you may possibly earn and expect to be paid by the carriers.

By now, you may be wondering how this wonderful money-making cycle could be listed as a challenge.  What you may not be aware of is that you, the wireless retailer, have to bear the cost of the phone and sell it to the customer at a discounted rate with an “I owe you” from the wireless carrier.  Those phone subsidy funds are then paid out to the retailer by the carrier at a later period, which can range from a few days to a few weeks and beyond.

But wait!  Shelling out your money to subsidize phones and be compensated later is not that simple of a case.  There are plenty of reasons, such as failure to activate the phones on the carrier’s portal, which they may use to deny paying you or even charge-back what has already been paid out to you. Add to that the very possibility that you may not get paid for some of the phone subsidies, commissions, spiffs and residuals because of system glitches or carrier oversight.  And the responsibility is on you, the retailer, to stay on top of what is due to you, check to see that you’ve been paid on time and accurately and if not, submit an appeal  to the carrier.  All of this of course has to happen within a certain time-frame and in a certain format; otherwise you lose the money you so faithfully laid out for the carrier to take care of the customer.

When you realize how complex the web of compensation is, which is based on the type of phone or plan that you are selling, whether it’s a new activation, upgrade or port-in, who the customer is in terms of discount eligibility, and can change periodically and sometimes at a moment’s notice, you will feel like a mouse in a maze looking for cheese.  Except, in this case, the cheese happens to be your own that the carrier has put away for you to find.  Also, keep in mind that the funds you receive may be paid to you via the Master Agent or your Top-Up Provider, adding an extra layer of confusion in the mix.

So, now you have realized the challenge that you will need to spend considerable amount of time and energy on keeping track of what funds are due to you, what has been received, check to see that those amounts were accurate and submit an appeal when necessary.


a. The “Right Tool”:  Luckily, the “right tool” that we talked about earlier can come handy in helping you keep track of your subsidies and commissions receivables and reconcile them against funds received from the carriers.  CellSmart POS’s commissions module can keep track of the phone subsidies by IMEI or phone numbers and lets you reconcile them against funds received.   Keep in mind, there is no one point-of-sale software, including ours, that will do the job completely and you will have to put in some time and effort in staying on top of all this and making sure the mouse, I mean you, get to the cheese you deserve!

b. Stay Connected: Carriers and Master Agents regularly communicate via emails, conference calls, webinars and personal visits by their field reps to educate and ensure that Retailers understand all of the current offers and promotions and are following the guidelines necessary to be paid accurately and on time.   Be sure to check your emails daily, attend calls and webinars and coordinate times with the reps’ visits to learn the details and stay current.

c. Communicate:  Be sure to communicate with your staff the news of upcoming offers and promotions as well as any that may be expiring in the near future.  After all, your staff is your front line on the sales floor and it is vital that they understand the marching orders about offers and promotions, their start and finish dates and are applying them accurately to each sale.

As we have seen, there are certain common challenges to owning and managing wireless retail business, just as there are with any other type of business.  With this blog, I hope I was able to educate aspiring entrepreneurs and offer actionable suggestions to overcome them.

Are you looking to become a wireless retailer?  Were you already aware of the challenges discussed above or was this blog helpful in shedding some light on what lies ahead?

Are you already in wireless retail?  Do you find staffing, competition and carrier compensations to be challenges in your business?  What tips do you have to offer to future entrepreneurs to meet these challenges?  What unique challenges do you face and how do you handle them?

Thanks for reading and happy selling!

Recent Posts

Leave a Comment