Technology buffs take note: CeX offers a retail opportunity suited to economic upturns and downturns
A retail proposition which attracts custom when money is scarce as well as plentiful can enable a business to thrive in all economic climes. CeX Directors Hugh Man and Jon Cronin explain how their concept is continuing to grow whatever the weather
A downturn in the economy encourages people to seek value for money, which is great news for CeX,' says Director Jon Cronin. 'Our business works well when the economy is strong, but has a natural boost when times are a little more uncertain.
'In a downturn more people start to clear out their old unwanted items and bring them to CeX and this greater supply of items allows us greater margins and price flexibility. This means we can increase profit margins and/or drop prices to become even more competitive. With 60 stores across the country, CeX is fast becoming a prominent name on British high streets and it has continued its nationwide growth with the opening of two new franchise outlets.
CeX specialises in selling goods from seven main product lines it calls 'super categories', which are: Video Games, DVDs, Computing, Electronics, Mobile Phones, Vision and Music CDs. In addition customers are able to exchange their unwanted or used goods for cash or another product. 'The main attraction is value for money - customers buying a secondhand item are getting it cheaper than buying it new,' Jon explains. 'At CeX there is the added peace of mind that they can inspect the goods before they buy and also receive a 12-month warranty on everything they buy from us.'
CeX Director Hugh Man adds: 'Customers selling their old goods are getting some money back for an item they no longer need, such as an old mobile phone or a DVD they have seen. They enjoy the certainty of the price and payment in cash on the same day they sell their item.
'Upgrading to keep ahead is paramount for technology buffs and this is not only true in the fast moving world of computers. DVD has entered the living room faster than any previous device and the videogame business is huge, its estimated value is higher than any other sector in the entertainment industry.
'As well as this, our mobile phone business continues to grow as, after all, who doesn't have a mobile phone? For these reasons we currently store the buy and sell prices of over 150,000 lines. All of these innovations provide compelling motives for consumers to sell their older technology to CeX.'
In fact several CeX franchisees were previous loyal customers, such as Eddie Pike. He reveals: 'My first introduction to CeX was as a customer. I regularly visited a branch and saw how busy it always was, even on the quieter days of the week. As a customer myself I loved the concept of the business - I could see how successful it was so I enquired about the franchise. I spoke to the existing CeX franchisees, which turned out to be a very positive experience. Everyone is incredibly enthusiastic about the business and they have some great things to say. CeX were very open with me when it came to discussing the possibility of becoming a franchisee, they explained everything, showed me their results and made sure I could make a good, well-informed decision.
'The training that followed my decision to invest was great and covered everything I needed to know - it really sets you up to be confident when you finally launch the business. In the weeks leading up to my launch, CeX were incredibly supportive. To start with they undertook a big evaluation to find me the best location for my business. This is incredibly important to a retail business and so it's great that they go to such lengths to get it right. They also helped set up the store and made sure everything was in place for the first day of training - CeX are very experienced and extremely competent in what they do.'
Although all franchisees are given training and ongoing support in the running of their business, potential franchisees must still be prepared to put in a lot of hard work. Eddie comments: 'To make the most of the business, some sales skills and experience in a retail environment would be really helpful, but not essential. You need a willingness to work hard above anything else - to put the time into the business to make it a success. However, I find that one of the most important things is to love the product - you need to be passionate about what you're selling. With CeX's product range, there's a lot to be passionate about.'
Reported by Stuart Anderson