By now many of you have noticed the rising prices of the iPhone 5, 5C, and 5S LCD assemblies. This is because of an industry-wide manufacturing issue due to a shortage of raw materials. Initially when we notified you of this, we anticipated it to be short-term. Unfortunately, the shortage is still persisting. While we don’t anticipate our prices to go much higher, we don’t expect them to go down either for at least another 30-60 days. Below we’ve outlined details of how the shortage caused the price increase, along with things you can do to offset the higher costs.
What’s Going On?
The unavailability of raw materials needed to assemble iPhone 5, 5C, and 5S LCD screens have caused an industry-wide supply shortage.
So Why The Higher Prices?
Because of the raw materials shortage, it is difficult for our factories to procure the required sub components in order to properly manufacture and assemble the 5 series LCD screens. Since there is a shortage of these sub components, their cost, along with the cost of manufacturing the assemblies, has gone up. Because of this, distributor and end user prices go up as well.
Situations like this are not rare.
For example, whenever a new phone is released to the market, the cost of the LCD assemblies are high while factories begin to manufacture the parts for the growing demand. Once production and supply increases, the cost is driven down. Below is a chart displaying how the common business concept and phenomenon called “Supply & Demand” works.
You may see this in your own business as well. If you have a surplus of LCD assemblies in stock for a repair that you don’t see too frequently, you may offer a special deal on the repair in order to boost sales and clear our dead inventory.
How it Could Affect Your Business:
As many of you are beginning to notice, the rising costs of iPhone 5/5C/5S LCD assemblies may cause you to make adjustments in other areas. Some of you have lost your profit margin on these repairs, or have dug into your working capital in order to not increase the price for your customers. And of course, many of you have already raised the price of those repairs accordingly.
Sometimes it seems as though there is a fine line between providing your customers with exceptional service and running a profitable business. But it doesn’t have to be that way. As the industry matures, so must we, if not just for the sake of ourselves, but for our customers as well.
One way we are working to offset the rising cost of iPhone 5, 5C and 5S assemblies for you, is by temporarily increasing our LCD BuyBack price of cracked glass LCD assemblies to $11 per unit. We also run daily deals so that while you may be spending more on one type of part, it will be offset by spending less on another.
Ways You Can Still Retain Profit:
- Cast a Bigger Net
For those repair shops that only fix iPhones, it may do your shop a world of good if you expand to LG and and Samsung repairs. The more diverse you are, the less dependance you place on only a few types of repairs. You can also offer other services such as unlocking, cleaning and consulting. Accessories and Screen Protectors such as Simple Snap are also a great way to raise your average ticket price to make each transaction more profitable. Don’t put your eggs all in one basket!
- Incorporate Customer Perks
Customer incentives are a great way to offset the rising costs of operating your business, and to build customer loyalty at the same time. Repairing the same customer’s 5C for the second time in a row? Offer them a complimentary Simple Snap screen protector! Have a customer that’s referred several customers to you? Give them a discount on their iPhone 6 repair. We know what you’re thinking, “Spend money to save money? Seems odd with rising costs!” Not so. You don’t want your prices to be the only reason why customers do business with you. In fact, customer are willing to spend a little more money at a business they enjoy working with, than a little less on a business they don’t like or have no opinion of.
- Buy in Bulk
When you begin to notice the prices fluctuating for certain parts, especially ones your business is dependent on, it’s best to stock up while the cost is low so you don’t have to dig into your working capital to compensate for the price volatility. If it’s not in your budget, companies like PayPal offer an extended line of credit that you can apply for and use while checking out on our website.
4. Ask Your Customers
In April, we sent out a Feedback Survey to our customers and gave them each $5 worth of rewards points as a thank you. This survey not only let us know how we were doing as a vendor, but gave us vital information as to how we should grow our company. Thanks to your feedback, we expanded our small parts inventory drastically, and rolled out our weekly repair tip.
Bottom Line: Remember your customers are your biggest assets, and asking them for feedback will not only empower them, but could give you key pointers as to how to grow your company.
We’re grateful to have you a part of ReVamp Wholesale, and we will do everything we can to offer you an exceptional service during current and any future cost increase. If you have any questions or feedback, please do not hesitate to contact our Customer Relations team by phone at (312) 450-7265 or via email at Support@ReVampWholesale.com.
-Post By: Jessica Kristnofe, Director of Customer Relations