What’s the Difference Between a Corporate Owned Cell Phone Store Vs Authorized Cell Phone Store?
Have you ever wondered what the difference is between the AT&T, Verizon, T-Mobile, Sprint, etc. stores in your local mall? I’ve traveled the country and understand that some markets aren’t as saturated having perhaps only 1 cell phone store per carrier (or less) in each mall but for the most part there are usually at least 2, I’ve seen up to 8, of the same carrier in the same mall!
Why would any carrier do such a thing? Why does one kiosk, cart, or in-line store have different deals? What’s the difference between this AT&T store and that one, between this Verizon store and that one, etc.?
I’ll help answer what the difference is between a Corporate Owned Cell Phone Store vs Authorized Cell Phone Store?
Difference #1 – There are two types of retail stores. One is the actual company store which is owned and operated by that carriers company and employees. The second is an authorized retailer or dealer which is a separate business entity from the actual carrier. At the same time the authorized retailer (reseller) is approved by the actual carrier itself to sell its services & products.
Difference #2 – Phone #1 costs $100 at this store vs $50 at this store. Corporate owned stores for the most part are consistent across the board with phone pricing and plans. At the same time authorized retailers can change the prices within the bounds of its agreement with the carrier and with the P&L of the company as to what would make sense. You can often find better deals at the authorized retailer stores but the same can be said for the carrier owned stores as well.
Difference #3 – No secondary contract vs secondary contract? What is a secondary contract? A secondary contract is a contract that most authorized retailers use to help deter and secure the discount that they have passed down to the customer. Example: A phone that retails for $100 most likely costs the retailer $50-$200 more than the selling price. Believe it or not it true. On average it might cost the retailer $100 more than the selling price to the consumer. This is where the secondary contract comes in. If the consumer cancels their service with the carrier before the minimum days needed (vesting period) for the company to earn its commission from the carrier, they would lose out on not only their commission from the carrier but the cost of the phone as well. Should this scare you the consumer from buying from a authorized retailer? In my opinion, NO. The only reason it should scare the consumer is if they plan on canceling their service and not returning the phone within the grace period given.
Are the corporate stores better trained than the authorized retailers? In my experience it depends on the actual store and employees. I’ve seen it go both ways.
In theory, both carrier operated stores and authorized retailers coexist and should respect each other. In practice, I’ve seen it both friendly and downright cut-throat between the two. So if by chance you are shopping around and visit corporate owned as well as authorized dealers, make sure that you go with your gut and purchase from who you feel the most comfortable.
Key thought when purchasing: Buy from the salesperson that qualifies you the best. Meaning, asks you the right questions to help fit you to the correct plan and phone. If they don’t ask you the basic questions…keep shopping!
Hope this article helps you out.