Vodafone Retail Finds End-Of-Line Rewarding

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E-commerce and logistics partners, Marketworks and Royal Mail, develop new online sales channel for yesterday’s handsets.

A recent trial to sell end-of-line and surplus stock using the ubiquitous online sales channel, eBay, has resulted in unprecedented success for handset manufacturer, Vodafone.

Traditionally, Vodafone had sold its older handsets through the retail channel or to third party repair dealers for spares. But these methods typically only recoup just 30 per cent of a handset’s cost price. Using eBay, Vodafone is now seeing purchase prices of at least double that achieved via the spares market and significantly higher than through retail outlets: purchase prices are now 60 to 70 per cent of cost price. In addition, purchasers pay via PayPal instead of by cheque, so Vodafone enjoys the added benefit of funds being deposited directly.

Mobile phones are high fashion items as well as high tech products. Vodafone’s handset range changes every quarter, leading to an ever-increasing tail of products. The level of depreciation is fast – a phone on sale for £100 at launch will typically command just £50 just three months later. Lack of consumer demand for older models is exacerbated by restricted shelf space in-store and retail incentives that encourage sales staff to promote the latest models.

‘We really needed to initiate a new way to move these less fashionable handsets quickly with maximum returns,’ says Simon Griffiths, Liquidation Manager, Vodafone. ‘The spares market is unpredictable and can often reach saturation – and the retail environment doesn’t favour older handsets.’

Marketworks’ enterprise software solution was chosen to build and manage the new channel and Royal Mail to handle the logistics operation.

Ecommerce expert, Kyle Antcliff, VP International, Marketworks, said, ‘Vodafone was looking for a new highly effective cost recovery solution for their end-of-line handsets. The outsourced Marketworks/Royal Mail solution using eBay has achieved excellent results, with up to 3000 handsets a week being sold directly to consumers through this new channel”.

‘It’s a very neat solution,’ says Simon Griffiths. ‘Marketworks and Royal Mail work very closely together on our behalf. Marketworks provides their eBay platform and relevant IT expertise and support, with Royal Mail handling the logistics, including the warehousing. The items are shipped off to the Royal Mail warehouse and held until there is a winning bidder. Then they’re picked, packed and despatched, with a Vodafone invoice. The ease of the solution and automated sales reporting tools have resulted in significant savings in management time.”

Griffiths added, ‘The reserve price on eBay means that we’re guaranteed to achieve a minimum price online. Just as important – and in contrast to the spares market solution – subsequent use of the handset provides us with another revenue stream, airtime usage.’

Robin Mar, Head of New Business, Royal Mail said, ‘The sale process is fast, simple and effective. While Marketworks handles the online aspect, Royal Mail dovetails into their and Vodafone’s organisations to provide a seamless service – one that takes full responsibility for the process, from receiving the handsets from Vodafone to delivering them to successful bidders’.

About Marketworks UK

Marketworks UK is a leading provider of ecommerce software, ecommerce storefronts ebay auction management software, sales automation software and marketing services for multi-channel online selling. As eBay’s first and largest Certified Solution Provider, and with an international presence in six countries, Marketworks is committed to driving customers’ sales and profits by eliminating operational, channel and geographic barriers associated with selling online. Marketworks has branches worldwide, including the UK, Germany, Australia, and US. For further information on the Atlanta-based company, please go to http://www.marketworks.com.

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Barbara Mccall
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