Vertex Wireless says they can find as much as $100 thousand a year for the average 20+ store chain / here’s how ...
Vertex Wireless is helping wireless retailers find hidden money. Some of these “hidden” revenue sources include recovering carrier charge backs as well as collecting and recycling used wireless devices.
Chicago-based Vertex Wireless is a value-added services (VAS) firm whose niche stems from a maturing market where wireless retailers experience slower growth and compressed margins. This maturing market has also increased business convolution and Vertex is easing some of that complexity by helping retailers tap into new revenue sources such as used phones. And just in time.
According to a New York Times article published in January, the Environmental Protection Agency (EPA) is taking a concentrated interest in Wireless and its related cell phone waste, estimating that 150 million phones are taken out of commission each year. Vertex says these phones have reasonable secondary market value, which is as good as ‘found money’.
The company’s founders are made up of former OEM and wireless distribution executives who have personally experienced two decades of industry growth. Their perspectives cover handset manufacturing, carrier sales, and retail sales operations. They have also witnessed the wireless waste that the EPA warns of.
Vertex management’s response is a belief that handset recovery has financial benefit to the dealer. “This idea is not new” says Brian Sipe, VP of Business Development and Vertex Partner, “However, the key to recovering used devices is the implementation of a simple ‘reverse logistics’ process.” The Vertex program reduces risk of employee theft and provides for accurate tracking and reporting. “Without these capabilities,” he says, “you might as well throw some old phones in a box and hope someone offers you a decent flea market price.”
Vertex employs their proprietary web-based phone tracking and funds collection database that systemizes the used phone recovery process. It can be utilized online or through integration with various point-of-sale programs. When integrated into daily sales efforts http://www.verportal.com can provide an average 20-store retail chain with an estimated $100 thousand in annual found money. But Verportal helps retailers recover more than used phones.
The Verportal program can also be used to collect on carrier charge backs and bad checks. Through Verportal.com information related to a charge back or NSF is “collected, aggregated, and distributed” Sipe says, to one of the largest collection firms in the nation. “On average a dealer with 20 stores or more may have $30 thousand to $50 thousand in charge backs a month,” adds John Wessel, Vertex founder and C.O.O. “Generally those charges are just written off as a cost of doing business. We help retailers recover 25 to 30 percent of those charges with Verportal.” Sipe continues by pointing out that many wireless retailers don’t have the resources to follow-up on these types of opportunities. “Our customers tell us… ‘Wow. You guys really get this’,” he says. As a result of their “getting it”, Sipe also says that their network of wireless retailers had experienced quantifiable growth in 2007.
Vertex’s collective network and industry ties often prompts retailers to ask whether Vertex has any connections to wholesale deals, to which they answer, “yes!” According to Vertex, their customers benefit from what Sipe calls a “selective wholesale network”. Although the company has no great interest in becoming a big wholesale distributor, they do procure equipment at their customer’s request. And MVNOs have also made requests.
MVNOs have asked Vertex to conduct reverse logistic programs and also to provide creative bundling and kitting services. “We enjoy being creative with that opportunity,” says Sipe. The work has also lead to new services they provide for corporate clients.
“One way we’ve managed to innovate in reverse logistics services is to explore corporate handset decommissioning. We have the ability to help corporations clear handsets of sensitive data. By using our recovery processes, we can receive, sanitize, store, track, and account for assets that may contain potential liability because of sensitive, stored data.”
Recycling used phones is not only a revenue source issue, but a hazardous waste issue for phones without recoverable revenue, on which Vertex has taken a position. “It’s about balance,” says Wessel. “We are growing a business responsibly and eliminating waste safely. Wireless waste contains dangerous chemicals such as lead, arsenic, nickel metal hydride, and beryllium. We’re here to run a business and make money, but when you can do that and help the environment, it makes the ride home that much more satisfying.”