Why did I leave my phone repair network and what does Onlifance have to do with it?

DISCLAIMER: The article was written based on an interview with the owner of a network of phone repair service centers, A. Rodionov.

From 2018 to 2023, I opened 5 phone repair service centers in Kursk, Moscow and Tula.

For 5 years I wanted to build a global company: we opened in the top shopping centers of the city, achieved a turnover of 2 million and were the very best in the regional city.

I don’t regret the time spent, but now I see more promising areas for business. He closed outlets in Moscow and Tula, turned off advertising in Kursk and laid off some staff

A network of phone repair services is a reality:

In the photo, a well-known bodybuilder in the city, an online star, gives bream to my employee. I found out about this while painting with my wife.

This is how one well-known franchise in the niche sees its phone repair service

What is it really like?

Phone repair service from scratch

The threshold for entering the business is near zero. Therefore, most of the services are self-employed craftsmen, they can work for food and easily implement dumping.

I opened 2 main formats.

Island in the shopping center – total 525k

Figures for my opening in Kursk, estimated for 2020

The island itself was built for me for 90k through an acquaintance; I installed the camera much later, since at first I worked as a self-employed person.

As for equipment, you can start with an uninterruptible power supply (5k) and a set of screwdrivers (5k). If you have 17k, then you will be a luhari master with a heating separator (5k) and a hairdryer (2k). I don’t take a soldering station; the format I described is suitable for modular repairs: disassembled, connected, handed over. This solves the main problems with phones; we outsource complex cases to shareholders, increasing 50%.

This is what an island in a shopping center looks like

Service in a separate building – 625k

If you want to start this business, I wouldn't consider an office. But I opened it and it looked like this.

Figures of my opening in Tula. I was thinking about 2021

Mathematics of phone repair services

Kursk

The average turnover of my 3 outlets in Kursk at its peak was: 1.2 – 2 million. Then everyone in the city knew us, and advertising cost from 50,000 rubles per month. Now it is about 1.1 – 1.4 million

Service season is from May to December. I will calculate the economy using the example of the average month – October. October 2023 turnover = RUB 1,273,014.33

Salary of craftsmen – RUB 335,276.04

25% goes to the master for modular repairs and 50% for soldering

A common service problem is finding a good engineer. But we are not looking for engineers, we are looking for: office workers, assistant engineers and teaching. The training lasts 1 month, during which time I pay a salary of 30k. Then for 2 weeks the newcomer works at the point with another master as an apprentice. After starting work, work begins on a percentage basis; if the percentage does not exceed the salary, the salary is paid. Craftsmen have a system of grades from 30 to 45k salary; the more experienced the person, the higher the salary.

A beginner learns to distinguish copies of spare parts from the original. For example, the origin of the display can be determined by the nature of the mark on the cable.

Spare parts – 362,500 ₽

I changed many suppliers, now I work with Moscow

Third-party services (Service/Soldering/Plying) – 170,310 ₽

We only do simple repairs at the point. Everything that requires higher qualifications goes to Moscow. I tried to solve this in Kursk, but 90% of my devices were broken. Either evil competition, or crookedness. I send by SDEK, sometimes I get negative results if the cargo is delayed.

Only 20% of all repairs require special qualifications of a specialist, so it is much easier to outsource this. That is, in order to fulfill this 20% of the order you need to spend several times more money on equipment and consumables and hire professional craftsmen

Rent 117,101 RUR

2 islands in a shopping center – 66,400 ₽

Office in a separate building – 50,701 ₽

When I turned off advertising and cut some of my staff, my profits dropped slightly. So, I realized that it is very important to be in a passable place.

Advertising on VKontakte – 19,000 ₽

Usually I invested 50,000 rubles in advertising.

We tried offline advertising, it was expensive, it didn’t work well

A message from a client to a group on VK cost 150 – 300 rubles, the conversion to visiting the service was 30%.

An application to a quiz site from Yandex.direct cost 500 ₽, the conversion to visiting the service was 10%.

But at first you need to be prepared to turn off advertising to zero.

This turnover does not include the sale of phones and accessories, which we also have. Turnover from accessories at all points is 100 - 200k. Sales turnover of Apple equipment: 300-400k, but the profit from this is 7% — This turnover does not include the sale of phones and accessories, which we also have. Turnover from accessories at all points is 100 – 200k. Sales turnover of Apple equipment: 300-400k, but the profit from this is 7%

Total profit for October – 193,404 ₽
6,660 per month goes to taxes – patent, total balance – 186,744 ₽

This is the profit of 3 service center points. Usually 70% of this is the profit of the most popular island in the shopping center.

For a long time they abandoned Androids and only repaired Apple, now about 60% are iPhones and 40% are Android.

It is worth noting that this is the result of a business that I ran almost single-handedly for the first 2 years, and in another 3 years I assembled a team of 16 people, spent millions on advertising and took care of my reputation. Photo from corporate event.

It took me 2 years of work to get that kind of money for the first time. It's not a very good month, but it's not a very bad month either, which is why I took it as an example.

There is always frozen money in spare parts and scraps, for me it’s about 500k. And part of the marriage will not be exchanged in principle.

Tula

I spent 625k on opening a free-standing location in Tula, that is, I started with minus 625k. And in the first six months another approximately 800k is the total minus point. The point in Tula went to zero after 6 months, but by that time I was already tired of this business. I accepted the loss of 1.5 million and closed.

I would like to note that before this I was in this field for 4 years, I had 3 profitable services.

And this is what the financial model of a popular franchise in a niche looks like.

The first six months in the negative is what I advise you to be prepared for in this business if you approach it as a business and not as self-employment.

Pricing for phone repair services

I wanted to come to a system of 100% of the price of the spare part. But when a competitor in the basement around the corner makes it 2 times cheaper, you have to adapt.

Profitability of a separate repair item = money received from the client minus the work of the technician (25% – modular repair and 50% – soldering) and minus the price of the spare part.

The service has 4 top repair positions:

1st place – battery replacement, batteries simply last no more than 3 years,

2nd place – display replacement, thanks to the asphalt and curvature

Is this how you end a fight with your girlfriend?

If the display matrix is not damaged and the touchscreen works correctly, then it is not necessary to replace the entire display.

3rd place – connectors break and collect garbage.

4th place – flooded. For example, drowned in soda, sounds like a dish.

This is what a typical repair calculation looks like

And this is an example of calculation taking into account the different quality of components, iPhone 6 display

Copy for 1600, purchase price 700 + 1 month warranty
Copy for 2000, purchase price 800 + 2 months warranty
Copy for 2500, purchase price 900 + 3 months warranty
Removed original 3000, purchase price 1300 + 1 year warranty. The display when disassembled is half the price of the phone.
The factory original was not offered for this model.

For some time, the “night repair” service was popular.

The masters received 50% from such a service, and must be in touch after 20:00 for 5 minutes.

A man has arrived from another city, he has an hour left before the train, but his mobile phone is broken, we leave and do it at the station. From a customer-centric point of view, this was great.

People liked this, but it was very exhausting for the masters. We introduced an additional payment for leaving at night and there are now 2-3 such repairs per month.

Why have I lost interest in my phone repair services?

Business in services is endless stress

All the most difficult and conflict situations flock to you, as the owner. For example, when I was signing with my wife, they called me from the service.

Then the local onlife star was dissatisfied with the renovation. The bodybuilder came inside and gave my engineer some bream. As a result, I spent half an hour calming one down and arguing with the other.

A child was present at the incident, so the athlete was threatened with charges of violence in front of children, but the engineer did not want to write a statement, fearing the connections of the individual in question. I still feel bad for him.

Once they broke a deputy’s phone – they fixed it for free, they took away spare parts from the night engineer on the road – they wrote a complaint, and people in raincoats came to me to offer a roof.

Theft

90 people steal if they have the opportunity and 90 people do not steal if they do not have the opportunity.
Folk wisdom

I learned about the theft from good friends and by listening to calls. Unfortunately, I didn’t look at the cameras, I didn’t send out secret shoppers.

Once in CRM I saw that the application was closed with zero. I was surprised and asked the manager a question. She says she doesn't know how this happened. I listen to this manager’s call, and there the client says that we have already solved his problem.

The record for theft is 40k to the left. This is one master at one point.

Suppliers

As soon as you remove the films from the spare part, the supplier's warranty ends. That is, if they say that the warranty on spare parts is 2 weeks, then this does not include installation.

Once they brought me displays for the 11th iPhone, and out of ten, eight were defective. I bought 600k spare parts a month, and this supplier apologized and replaced it, but when the volumes are smaller, such problems begin to fall on the entrepreneur.

But here the supplier got it wrong and sent us extra cords

The majority in the regions don’t care about quality and just want cheap

It can be almost impossible to prove to the client that ours is 200 rubles more expensive, but the spare part is better and has a warranty. Especially when some of the cunning services supply copies under the guise of originals. So, I gave up and stopped working only with originals. I began to give customers a choice between spare parts. If you want something very cheap, here is a copy, there are better copies, there is a filmed original, there is an original.

When they say “I just need to get information,” in the language of the service this means:

I'm ashamed to tell you that I will go with him, but I will go with him

Courts

Court cases happen regularly once a year. IP telephony and cameras often come to the rescue here.

The Samsung was repaired and it is waterproof. But even on the Samsung website it is written that the warranty is void if you decide to completely immerse the device in water.

He comes under warranty, after our repair, and says that he bathed in salt water.

It's waterproof! I'll sue you!

We try to come to an agreement, but it doesn’t work out consistently once a year. Court, appeal. Somewhere we are, somewhere we are.

This is not to say that the problems described are unique to phone repairs. If your business is services, or offline, or has a human element, you get something similar.

Conclusion

Networking something sounds cool. But you can’t pay for a mortgage with show-offs. 150-200k in Kursk allowed you to feel like you were the master of life, but in Moscow this is not enough.

On the one hand, employees steal their second salary, and on the other hand, clients give them bream. And you are in constant stress.

Clients do not want good for themselves and therefore it is extremely difficult to benefit them. Because cheap and good is an impossible request from the point of view of formal logic.

When you have 16 people working for you, you think you can expect more than the average IT specialist.

PS I took 1.5 million from the accumulated money and opened my own souvenir production, 3 services continue to work.

Captions

DISCLAIMER: The article was written by the author of the blog “fell, rose” based on an interview with the owner of a network of service centers, Alexander Rodionov.

I blog “fell, rose” with stories about real business, and not this successful success of yours. Stories based on interviews with entrepreneurs are published once a week.

You will read: how a farmer spent 250 million in a village, how a store in the province was a nightmare for Smeshariki, why my sister and business partner became an “ex,” how I opened and destroyed a chain of nightclubs, how a technician restored a Soviet camp, but flew into a cash gap for 60 million, why did the owner of the quest room chain decide to just keep quiet, how did I encounter the Pikabu racket in 2023 and other stories.