Free Mobile Phone Upgrade? How?
There are many mobile phone upgrade offers screaming for your attention but how do you make sure you are getting the best offer AND that you will safely get your money back?
Seduce your wallet with free, cheap or half
price mobile phone upgrade deals … (safely)
You probably already know that mobile phone retailers are falling over themselves to better each others deals. You will see many websites and high street shops advertising free or discounted line rental offers for 6, 9, 12 even 14 months.
So how can the dealers make these seemingly crazy offers? First, you need to understand how the dealer gets paid and how the mobile phone industry works (just a little bit). The dealer gets paid by the network, based on what price plan (tariff) he connects the customer to; a higher price plan means more money for the dealer.
Dealer Profit
Then the dealer must pay for the cost of the phone. A high quality and expensive phone means less profit for the dealer. The difference between the tariff commission and the cost of the phone gives the dealers gross profit.
However, the dealer must then pay any cashback money from this remaining commission. The dealer basically is ‘betting’ on how many customers will claim their cashback money after the stated 6th/12th month (or as given); the lower the percentage of customers that claim, the higher the dealers profits. The higher the percentage claiming, the closer the dealer comes to going bust!
It is a fact that many are actually offering deals to customers that do not make them any money at all, and may make a loss. So how can they make this work?
Retailer goes bust without paying customer
The worrying problem is that some do not make it work, and have gone bust. Less reputable and unstable companies have not got the balance right and had to pay out so much cashback that they simply do not have the money in their coffers to pay, and have closed shop leaving the customer without their cashback money.
In 2004 Mobile Republic went into administration allegedly for this very reason, and left many customers without their cashback.
Take the benefits of cheap offers but miss the problems
How? Read the next article on Mobile Phone Upgrades
Seduce your wallet with free, cheap or half
price mobile phone upgrade deals … (safely)
You probably already know that mobile phone retailers are falling over themselves to better each others deals. You will see many websites and high street shops advertising free or discounted line rental offers for 6, 9, 12 even 14 months.
So how can the dealers make these seemingly crazy offers? First, you need to understand how the dealer gets paid and how the mobile phone industry works (just a little bit). The dealer gets paid by the network, based on what price plan (tariff) he connects the customer to; a higher price plan means more money for the dealer.
Dealer Profit
Then the dealer must pay for the cost of the phone. A high quality and expensive phone means less profit for the dealer. The difference between the tariff commission and the cost of the phone gives the dealers gross profit.
However, the dealer must then pay any cashback money from this remaining commission. The dealer basically is ‘betting’ on how many customers will claim their cashback money after the stated 6th/12th month (or as given); the lower the percentage of customers that claim, the higher the dealers profits. The higher the percentage claiming, the closer the dealer comes to going bust!
It is a fact that many are actually offering deals to customers that do not make them any money at all, and may make a loss. So how can they make this work?
Retailer goes bust without paying customer
The worrying problem is that some do not make it work, and have gone bust. Less reputable and unstable companies have not got the balance right and had to pay out so much cashback that they simply do not have the money in their coffers to pay, and have closed shop leaving the customer without their cashback money.
In 2004 Mobile Republic went into administration allegedly for this very reason, and left many customers without their cashback.
Take the benefits of cheap offers but miss the problems
How? Read the next article on Mobile Phone Upgrades
posted by Free Mobile Phone Upgrades at 10:59 AM
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