Results 61 to 64 of 64
- 02-22-2006, 09:33 AM #61ThurmanGuest
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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- 02-22-2006, 11:05 AM #62JeremyGuest
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.
- 02-22-2006, 03:11 PM #63DecaturTxCowboyGuest
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.
- 02-22-2006, 06:05 PM #64SMSGuest
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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