A retail franchise that's seventh heaven for gadget fanatics
Packed with electronic entertainment goods, CeX is like seventh heaven for gadget fanatics. Adam Browning explores a franchise opportunity where the market potential is huge
In the fast evolving world of electronic entertainment goods, CeX (Complete entertainment Exchange) provides a valuable outlet for consumers to buy, sell and exchange in this lucrative market. Specialising in quality second-hand technology and entertainment products, customers are attracted to the stores by the opportunity to buy second-hand goods with a 12-month warranty at attractive prices and the ability to exchange their unwanted goods for cash or something they do want.
'The market potential is huge,' reveals Franchise Director Hugh Man. 'The videogame business is big, with its estimated value now rivalling that of the movie business. We currently store the buy and sell prices of over 50,000 lines. DVD has entered the living room faster than any previous device and in the fast moving world of computers, upgrading to keep ahead is paramount for technology buffs. From MP3 players to digital cameras and the huge range of associated memory cards, electronics is our fastest growing Super Category. Our mobile phone ranges continue to grow, after all who doesn't have a mobile phone?'
With five main product lines; Videogames, DVDs, Computing, Electronics and Mobile Phones, CeX's durable business model is based on its ability to withstand a downturn in the economy. Says Croydon Franchisee Kasim Ali: 'The business model is recession-proof. Every product we stock traditionally has a cyclical sales pattern. The beauty of CeX's second-hand model is that they are able to manipulate the buy and sell prices to smooth out seasonal lows in demand.'
With 14 years of retail experience, CeX is now seeking motivated and determined individuals to roll out its proven business model across the UK's high streets. 'Through franchising we aim to achieve national coverage making our goods and services widely available,' imparts Hugh. 'We aim to establish over 100 stores within the next five years.'
'I loved the idea'
One such enthusiastic franchisee is Stephen Boult of Hemel Hempstead, who is ready to open his first CeX store in the Summer. As an engineer in the electronics industry Stephen admits to having always been a gadget fanatic.
'About a year and a half ago my wife starting working for CeX as the finance director,' he says. 'When I visited one of their shops, I have to say I was completely hooked. I loved the idea.'
At the time, Stephen was looking for a change in career and was researching the opportunities available to him. 'My wife knew that the figures added up,' he adds. 'We could see it was a business with real potential. The more I looked at the franchise, the more I could say that this was the opportunity for me. It was something I could see myself enjoying.'
After visiting a number of CeX stores and speaking to franchisees, Stephen had a greater understanding of the business operations. 'When I expressed my interest in committing to the concept, CeX gave me the opportunity to work in a store to give a me a real idea of what it would be like,' he says. 'It's amazing how much I learned. It's a brilliant learning curve and I loved every minute of it. For a gadget person, working there was like being in seventh heaven!'
With further full training at head office ahead of him, Stephen has very good expectations of the continual support he stands to receive from CeX after his launch: 'CeX will be there from the word go - I've got full confidence in how I will be supported.
It's very important to CeX that its franchisees are successful, so they really do help you in every way. There's a solid network between franchisees and franchisor and a great support structure. I feel that I've been made part of the CeX family.'
With assistance in finding the location of his store, CeX is currently helping Stephen implement a marketing plan for his opening weeks. 'Cex has a pro-active team spirit and are going to make sure we have everything in place for a successful launch,' reveals Stephen.
Still early in its stages of franchising, Hugh Man explains: 'Franchisees will benefit from CeX's knowledge and experience of the marketplace such as optimal buying and selling prices and product supply and demand curves, which are essential to business success and avoiding stock shortages or surpluses. Ongoing support is provided by the senior management team including general business advice, new product updates, pricing, marketing, product repair, stock redistribution, IT, HR, public website (www.cex.co.uk) and intranet. This is a business that works when the economy is booming and even better when it is less buoyant.'