When Shebang Distribution MD Iain Humphrey made the long journey from Daventry to see Jag Communication’s MD, John George, in Cornwall this summer, he had no inkling where it would eventually lead him.
Humphrey has worked with George for several years, supporting Jag with Shebang’s Sellfone 3G EPOS system. He was thinking about expanding his Go Mobile retail chain, possibly by buying Jag. What he didn’t expect was that he’d end up selling his retail business.
‘As I came away from that meeting, it was spun around to the point that, for both Jag and Go Mobile, I would be making a decision that was the best for everyone involved,’ says Humphrey.
Humphrey actually started in mobile retail, but says his commitment to Shebang was being stretched by the rapidly expanding Go Mobile chain.
‘When we sat there, we realised [the deal] would be great for both parties; concentrating Jag’s efforts in retail and ours in distribution. We saw the potential for both parties.’
Under the deal, 59 Go Mobile stores in the Midlands, Yorkshire and Northern Ireland will be handed over to Jag in January. Shebang will keep three remaining stores as Go Mobile.
The deal will see Jag expand out of its South West heartland, a goal of George’s, while Humphrey will be able to focus more on Shebang Distribution’s Sellfone 3G and Web 3G EPOS systems.
‘It gives me an opportunity to be office based, instead of travelling all over the country visiting retail stores,’ Humphrey says.
‘There’s an opportunity now for me to put more time and effort into ensuring that the [EPOS] software has the right innovations and works to the standards required.’
Ever since he left a Mansfield dealer in 1991 with his first handset and realising the potential margins on analogue phone contracts, Humphrey has never looked back.
‘It was easier then because everyone was a new customer. I opened a store in Nottingham and the first time I saw mobile’s potential was when a customer buying for their daughter as opposed to their spouse. Then I realised mobiles would go all the way.’
Humphrey says that his taste for distribution came soon after. Poached by Style Communications, he learnt about sales, accessories and overseas purchasing. It was here that he saw the potential for a loyalty-generating system to combat dealers’ instinctive bargain hunting.
‘About six years ago, I realised it was difficult to get loyalty from dealers because if your rivals sell something 10p cheaper, then dealers will go there,’ he says.
Humphrey decided to develop Sellfone 3G with a local company (PC Control Systems). Sellfone is an EPOS system encouraging dealers to keep doing business with the same supplier through automated, and therefore more efficient, support.
‘Lots of people concentrated on box shifting because sales were so good, but I felt that to have a long-term, established business, I needed more. Shebang was always about being a one-stop shop for dealers.’
Humphrey tested Sellfone in the first two experimental Go Mobile stores. Almost immediately, their gross profit took off and with proven financial success to back up his sales pitches, other dealers signed up to use Sellfone.
‘I believe this gave me that snowball effect,’ says Humphrey. ‘When I demonstrated the system, showing my two stores’ GPs, it became much easier for retailers to see the benefits.’
Over 450 independent retailers have signed up to use Sellfone to varying degrees. Humphrey stresses that only accessories and prepay handsets are actually distributed by Shebang, although dealers can also process contract sales.
‘I created Sellfone to motivate staff to sell more, motivate consumers to buy more and automated the system to make sure procedures were more accurate,’ explains Humphrey.
He reels off a list of ‘innovations’ he claims Sellfone/Web 3G provide for dealers, including real-time support for (and monitoring of): opening/closing procedures; virtual ordering; proof scanning; accounting; reconciling networks’ commissions; automatic stock monitoring; insurance (Fonesure); landline/broadband packages and more.
Humphrey says Sellfone is ‘the whole shebang of what a retailer needs to operate multiple stores, enabling them concentrate on sales’.
He even claims to guarantee zero wastage because Sellfone automatically monitors each store’s stock levels and sales trends. ‘It just makes life easier for dealer principles.’
However, Shebang isn’t doing this altruistically. Sellfone costs over £25,000 per month to run and develop and it’s normally leased to dealers. Humphrey says if their sales through it are high enough, then Shebang can cover running costs. And dealers don’t even have to be restricted to selling exclusively through Shebang.
‘We didn’t build Sellfone to make everybody buy from Shebang,’ claims Humphrey. ‘We want advantages in the system for a customer to want to buy with us.’
Cashback is currently the bane of mobile retail and Humphrey is one of many only too glad to see the back of the current turmoil it’s causing.
‘It’s a bubble I’ve been waiting to burst for a long while,’ he sighs. ‘We’re all in competition – even networks do cashbacks with credits on bills – but over the last couple of years, we’ve seen that cashback is built on not paying customers.’
Sellfone does let dealers offer cashback deals, but only within the scope of commissions. ‘Cashback won’t go away. I think there’s a lot more to be understood about customers taking cashback deals. They are long-term customers anyway; the next time they’re up for renewal, nothing’s going to be good enough except another cashback deal.’
Humphrey’s view of the retail chain is that of everyone being in conflict with their suppliers to offer consumers the best deals. As a result, providing good, long-term customer service proves very difficult.
‘The hardest thing for dealer principles is ensuring their store staff look after customers properly,’ he explains. ‘Sellfone aims to give dealer principles the tools for seeing where their staff’s main strengths and weaknesses are.’
Future for Shebang
Now that Go Mobile has been sold to Jag, what’s next f