How do I start a cell phone business?

Cell Phone Business - Mall KioskStarting a cell phone business can be a long-term profit maker for you. Isn’t it sad that most people dream about building a business and working for themselves but never do anything about it? Starting a cell phone business is hard work and requires determination. If you think that you have what it takes then you should read this guide, follow its instructions, and try to give it your best shot!

Online Store or Traditional Storefront

The first thing that needs to be decided is where the business will take place. Online stores require less start-up costs, but need tech-saviness and patience. The online cell phone business is very intense because there is a big pie out there. Traditional storefronts cater to a specific area, which may or may not be a competitive environment depending on geographic location. These types of stores require employees, liability insurance, computer equipment/software and paying rent. Stocking inventory follows and as anyone can reasonably expect, expenses start to cost thousands of dollars.

How to Get What a Cell Phone Business Needs

In order to get the inventory you need from the cell phone carrier, you need a Master Dealer. A Master Dealer has the power to get your store exactly what it needs. Master Dealers are in charge of supplying cell phone inventories, processing commissions and giving advice.

Furthermore, they provide support and training for your business. Some Master Dealers are nationwide, while others only operate locally. Every Master Dealer varies in pay and quality. Choosing the right Master Dealer is an important step toward starting a cell phone business.

Finding a Master Dealer

Here comes the hard part. A list exists with the names and numbers of Master Dealers across the country. The problem is that this list is confidential and only few have access to it. In order to solve this problem, you must talk to people in the cell phone business.

People who work with Master Dealers can give you the information that you need. After contacting the Master Dealer, you need to persuade them to work with you. Having a cell phone business with a traditional storefront instead being online can really help persuade a Master Dealer. If you are persuasive, then a Master Dealer might still supply you without requiring you to own a storefront.

Exclusive or Non-Exclusive Carrier

If you choose for your business to become your cell phone’s business exclusive supplier then there are benefits and drawbacks. The benefits toward going exclusive are newer products and higher commissions. The drawbacks are that the carrier has a high amount of power over your business. For example, if the carrier decides to cut off your commission by 70 percent, then your cell phone business will definitely go under. This can happen when a carrier wants to open it’s store around your area.

Now let’s go on to what a cell phone business really sells.

The cell phone business model works by selling the following:

  • Prepaid Cards/Activation – Varies, cards $5-30
  • Accessory Sales – $5 to $50 each
  • Upgrades and Add Ons – $30 to $100 each
  • 1-2 Year Contracts(Post-Paid Activation) – $75 to $450 each

How Do They Make Money?

So how does a cell phone business make money exactly? Well, glad you asked! Here are some of the different money makers that you as a cell phone business owner will soon be intimately familiar with:

Prepaid Cards/Activation

Prepaid card sales work on a commission basis. A prepaid carrier might allow you to have a 10% commission which means that if you sell a prepaid card for 10$ then you receive 1$ in profit and the rest goes to the carrier. Prepaid activations are easy ways to make a profit without doing much calculating work. Prepaid activations make money on the amount that is made from selling the card past its wholesale price. For example, if you buy the prepaid activation at wholesale value for $30 then you could make a hefty profit by selling it to a customer for $50.

Cell Phone Accessories

Accessories are a major source of profit for a cell phone business. People need to feel that accessories are required in order for a sale to occur. Having persuasive salesman can help move potential buyers into real sales.

The most common accessories sold are chargers, headsets and replacement parts. Accessories can be bought cheaply in bulk from suppliers in Asia and sold for much higher than their original price. You might order a hundred cases for a dollar each from Hong Kong and sell them for 9 dollars each once they arrive at your store. Combining cheap accessories with expensive phones will attract customers and allow you to sell more phones.


Upgrades or contract extensions are another way of making some money in the cellular phone business. Upgrade happens when a customer has a given carrier, and they want to extend their contracts for another 2 years in exchange for a new phone on the same carrier. Carriers will pay a commission for every upgrade which is sold to a buyer. Upgrades make a small profit for cell phone businesses, usually in the range of thirty to a hundred dollars each.


Carriers also give commissions for add-ons. A business can expect five to one hundred dollars for every add-on sold. Add-ons are things like web browsing capabilities, additional texting and Blackberry capabilities. Combining a cheaper add-ons with a more expensive cell phone can result in additional profits for your business.

Cell Phone Activations

This is the main stay of a cell phone businesses profit source. Activations are what people mean when they say talk about getting a new cell phone. A one year or two year contract can mean $60 – $180 in profit for a cell phone business. Depending on how many are sold, a dealer can expect $3000 to $8000 per month from activations alone.

Starting a cell phone business might seem like hard work, but it has been done successfully many times over. If you have the heart and dedication, then starting a cell phone business won’t be impossible. Learn more by reading through all of our cell phone reviews now!

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