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  1. #61
    Thurman
    Guest

    Re: Bigger sales hit than expected


    "DecaturTxCowboy" <[email protected]> wrote in message
    news:[email protected]...
    > John Navas wrote:
    >> Published research reports.

    >
    >
    > Sorry, that alone is not credible evidence. Could you provide a link to
    > your information so that we can review it.
    >


    CNet's unscientific poll included with their cellular newsletter this
    morning polled readers on their service provider:
    Verizon 27%
    Cingular 27%
    Sprint/Nextel 16%
    T-Mobile 11%
    Other 10%
    Alltel 4%
    Don't have a cell phone 4%
    Metro PCS 0%

    I'm surprised Verizon was even with Cingular. I only work with cellular
    data. The four states surrounding TX have very poor data coverage by
    Verizon.

    Immediately this is biased because it's a real-time poll. I replied at 8am
    TX time, so the West Coast was just waking up. It will be interesting to
    compare at 6pm.





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  2. #62
    Jeremy
    Guest

    Re: Bigger sales hit than expected

    "SMS" <[email protected]> wrote in message
    news:[email protected]...


    > The combination of higher margins on Cingular sales, and higher churn,
    > will increase earnings in the long term because these will offset the
    > lower number of new sign-ups.


    That might be thwarted if Cingular has a provision in their agreement with
    Radio Shack that cuts back or even eliminates commissions on new customers
    that do not stay with Cingular for a set minimum term, or who are credit
    write-offs.

    I wonder if those hated "activation fees" don't end up going to the sales
    agent, in the form of commissions?

    Regardless of the facts (most of which will remain confidential and won't be
    openly disclosed), it is troubling that Radio Shack should be so reliant
    upon commissions from the sale of wireless services. That suggests that
    they are unable to stand on their own two feet by selling their own product
    line. What does Radio Shack get, in the form of repeat business, from the
    customers to whom they sold wireless services? Take the Verizon
    arrangement, as an example. Will Radio Shack get recurring revenue when
    those Verizon customers sign up for a new term agreement in two years?
    Probably not. So Radio Shack expended their resources to derive a one-time
    commission, and I don't see how that helped cement their relationship with
    those customers to get them to come back.

    If the wireless commissions were the frosting on the cake, I'd say that was
    fine. But, judging from the published reports, it appears that Radio Shack
    is dependent upon those commissions in order to achieve their revenue
    projections. That does not bode well for them.

    Eventually the wireless carriers will phase out their independent agents,
    when virtually everyone has wireless service, and where will that leave
    Radio Shack? One does not go to an independent sales agent to obtain
    wireline phone service, or gas or electric service. With wireless, one can
    set up an account over the phone and have the phones delivered overnight.
    Major metropolitan areas will have stores owned by the carriers, where
    transactions can be completed over-the-counter.

    But, remember when AT&T had Phone Stores everywhere? They soon discovered
    that the cost of renting all that real estate, paying employees and covering
    overhead, just wiped out the profits they got from selling and renting
    telephones. Once wireless goes from being a hot product to becoming a
    mature product, the stores and the agents will go. It's just a matter of
    time.

    Radio Shack needs to determine if their product line--which was once
    unique--still justifies the expense that all those little stores incur, as
    opposed to the big-box concept that has been embraced by Circuit City and
    Best Buy. I think that the business model of lots of small stores, each
    with relatively low sales volume, is one that runs against the tide. Too
    many employees, too many real estate leases, too many liability insurance
    policies, too many utility accounts, too many products in inventory spread
    out over lots of stores, too many local store managers, too many headaches.

    The changing retail climate just may be killing off Radio Shack.





  3. #63
    DecaturTxCowboy
    Guest

    Re: Bigger sales hit than expected

    Thurman wrote:
    > "DecaturTxCowboy" <[email protected]> wrote in message
    > news:[email protected]...
    >> John Navas wrote:
    >>> Published research reports.

    >>
    >> Sorry, that alone is not credible evidence. Could you provide a link to
    >> your information so that we can review it.


    > Immediately this is biased because it's a real-time poll. I replied at 8am
    > TX time, so the West Coast was just waking up. It will be interesting to
    > compare at 6pm.


    Not sure if that would be considered a published report like Navas was
    alluding, much less truly valid. Industry magazines are bit better than
    some telephone poll.



  4. #64
    SMS
    Guest

    Re: Bigger sales hit than expected

    Jeremy wrote:
    > "SMS" <[email protected]> wrote in message
    > news:[email protected]...
    >
    >
    >
    >>The combination of higher margins on Cingular sales, and higher churn,
    >>will increase earnings in the long term because these will offset the
    >>lower number of new sign-ups.

    >
    >
    > That might be thwarted if Cingular has a provision in their agreement with
    > Radio Shack that cuts back or even eliminates commissions on new customers
    > that do not stay with Cingular for a set minimum term, or who are credit
    > write-offs.


    That's an issue that all carriers deal with. The termination fee
    discourages people from leaving, if it's collectable, and people with
    good credit are unlikely to risk a hit on their credit report.

    > I wonder if those hated "activation fees" don't end up going to the sales
    > agent, in the form of commissions?


    I think they go to the carrier. Not all resellers charge activation
    fees, i.e. Costco's deal with Sprint, T-Mobile, and Verizon, eliminates
    them.

    > Regardless of the facts (most of which will remain confidential and won't be
    > openly disclosed), it is troubling that Radio Shack should be so reliant
    > upon commissions from the sale of wireless services. That suggests that
    > they are unable to stand on their own two feet by selling their own product
    > line.


    Yes, that's exactly what it says. They have a lot of high rent locations
    that they can't support without a lot of wireless sales. Which is why
    they are a closing so many stores.



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