The mobile phone business is very profitable, with a typical margin of around 40 percent. This means that a large portion of the profits from a mobile phone company’s sales go to its owners.
Profit Margins Across the Sector
The telecommunications equipment area of the sector tends to generate higher net profit margins than the telecommunications service area. This is likely due to the intensely competitive nature of the service marketplace.
Retailer and Manufacturer Margins
Retailers are lucky to get margins above 3-5 percent on new phones due to high retail prices and control of the market by manufacturers. Used mobile phones allow margins of 10 percent or more, despite retail prices 65-75 percent lower than new.
Samsung aims for about 8-10 percent profit margins on its smartphones, but specific models and market conditions can affect this. Profit margins can range from 15 percent to 30 percent, depending on the category of accessories. “Mobile accessories is a good margining business for mobile phone companies."
Profitability in the Telecommunications Market
The average trailing twelve months’ net profit margin for companies in the telecommunications sector, as of Q2 2022, is approximately 12.5%, according to CSIMarket.com figures.
On average, mobile phone stores can expect a profit margin ranging between 20% to 40%, depending on their business model and competitive landscape. Additionally, the location of the store plays a vital role in determining its revenue and profit potential.
Profit margins in the wholesale cell phone business are shaped by many factors, most of which are under the control of the reseller.
An average cell phone repair business could net profits in the range of $50-65,000, with greater earning potential as you continue to become more well-known and successful.
A phone case business is a profitable way to make money online. The market for phone cases was worth $10 billion in 2020 and is expected to grow 7.5% each year until 2025, reaching $35.5 billion.