Derbyshire-based BuyMobilePhones.net is on track to increase turnover by nearly 25% this year from £37m to £45m, according to MD Paul Sisson.
The online business, which includes b2b website A1 Comms, is making over 3,000 more connections per month than in the same period last year and on average has delivered 340% growth over the past three years.
Speaking to Mobile, Sisson says the firm’s phenomenal growth, which has seen sales rise from £288,000 in 2006 to £37m in 2010, helped it win the number one slot in the Sunday Times Fast track league table last year.
Sisson is confident this upward trajectory will continue. He says the economic downturn has played its part in driving sales up, as consumers look for online bargains.
He explains: ‘Our website is based on high volume sales and giving value for money to customers. The economy has made consumers look for better deals and that’s what we offer. Most of our price points are £5 per month less than those offered on the high street.’
Sisson is no stranger to the high street, having built a portfolio of 14 mobile phone stores in market towns around the East Midlands under the A1 Comms brand. In 2001, Sisson launched its online b2b business, A1comms.co.uk. Two years later came BuyMobilePhones.net, which took off at speed.
By 2006 the online business was so strong that Sisson decided to quit the high street and take the business entirely online, selling off all 14 mobile phone shops.
He recalls: ‘Within a year our online business had overtaken our shops. In the end it was doing so much more than all our shops put together we decided to sell them at what happened to be just the right time, because the shops were still making money and we made money from the sale.’
Since then, the online business BuyMobilePhones.net has gone from strength to strength, Sisson says, with the firm selling an estimated 80,0000-plus mobile phone contracts every year and attracting around one million visitors to its website every month.
BuyMobilePhones.net is also riding high on a wave of first time smartphone buyers, which make up the bulk of its online sales.
Sisson puts the company’s success down to a strong portfolio of smartphones, good relationships with all the networks, clever marketing and competitive pricing backed up by free gift offers, ranging from TVs to laptops to iPods.
The company also offers cashback deals, despite the bad publicity some cashback schemes have generated over the years.
He explains: ‘There is more than one style of cashback. We mainly offer automatic cashback, which requires no claim and no hassle, so cashback still has a part to play.’
He adds: ‘We also do a redemption cashback model, which is still there because there is a market for it, but it is a much smaller part of the business.’
BuyMobilePhones.net has also benefited from rival online companies’ overreliance on cashback, which has seen many of them fail.
Sisson says: ‘In 2007, BuyMobilePhones.net was one of 12 competitors. By the beginning of 2008, the competition had gone, either through companies going under or being bought up by the likes of Carphone Warehouse or Phones 4u.
Now we are one of the top three websites for contract mobiles in the country.’
So what does the future hold? Sisson says he has grand plans. ‘Based on our current growth, I expect our turnover to grow from £37m to £45m in this financial year. I want to keep growing the business. We have a tiny percentage of the overall contract market, so there is plainly room for us to grow. And I would like to look at opening websites in different countries.’
BuyMobilePhones.net is also expanding into tablets and accessories as it grows the business. It recently launched a range of tablets that includes the HTC Flyer, the BlackBerry PlayBook and the Motorola XOOM, and will soon be stocking the Samsung Galaxy Tab 10.1.
Sisson is particularly keen on the accessories market and recently launched a small range of accessories that he plans to expand.
He reveals: ‘We have only just launched our accessories range but it is selling really well.’
He adds: ‘It is not unusual for customers to spend around £40 on accessories. After all, these are high value handsets and they want to protect the screens. Also, with these smartphones eating power, portable chargers are becoming very popular.’
The company is also recruiting at its headquarters in Alfreton, near Derby. In 1997, the company had just four employees in the basement of one of its stores. By 2009, it had 30. Its current headcount is 75 and Sisson plans to expand that to around 90 employees over the next 12 months, spread across the company’s customer care, after sales, telesales, marketing, credit control and IT divisions.
BuyMobilePhones.net has strong links with the local community as a local employer and also as the official shirt sponsor for Derby County Football Club.
Sisson is a keen supporter but says the deal goes much further than club loyalty. ‘It’s been a very good thing because it has raised our profile locally and more widely by getting our name on TV.’
He adds: ‘Since we started sponsoring Derby we have had a lot of people asking if we would open a shop in the city, but our model won’t work on the high street. Most high street stores are selling on high margins to pay for the bricks and mortar. Being on the internet allows for much more volume and lower overheads. We won’t go back.’