Dial In Profits with Phone Covers

Copyright © 2013 by Davis Multimedia, Int'l. All Rights Reserved.
As Printed in July 2013, Volume 39, No. 1 of The Engravers Journal
This sublimated phone cover has brilliant color due to the high-quality metal insert. Photo courtesy of Condé Systems, Inc., Mobile, AL.

   Cell phones and cell phone accessories have grown to an enormously important position in our lives and culture. Cell phone accessories alone boasted sales of $63 billion last year (that’s “billion” with a “B”). Somehow, we should be able to get a little piece of that—even just a tiny piece—and we can! Here’s how:
   Cell phones have become such an important part of our culture that even someone like Newt Gingrich, the former Speaker of the House and 2012 GOP presidential candidate, went on his YouTube channel and asked people what the new generation of cell phones should be called. With all the political turmoil that was going on in May 2013, he spent his time questioning what we should call a cell phone! And why not? Cell phones dominate sales numbers in the United States with staggering statistics like these: In the last quarter of 2012, Apple sold 27.4 million iPhone 5s and 17.4 million iPhone 4s. Samsung, Apple’s fiercest competitor, sold 15.4 million Galaxy S IIIs. With the introduction of Samsung’s newest phone in 2013, they sold 5 million units in the first week alone and 10 million by the end of May.
   When most big box retailers like Wal-Mart and Kohl’s were reporting disappointing results for early 2013, cell phones and cell phone accessories continued to be as strong as ever. So, how do we get a piece of the action?
   The answer is simple: cell phone covers! Now, at this point, I can almost hear the groans and see the rolling of the eyes, but hear me out. There has been some good research done about this and if we take advantage of it, we can get a piece of the action. No, probably not a million dollars’ worth but a piece that most of us would consider pretty significant!
   First, we need to get rid of some faulty perceptions. These are some assumptions many of us have been working under that just aren’t true and they are holding us back.

Phone covers can be sublimated with any full-color image to make it uniquely personal to the customer. Photo courtesy of Johnson Plastics, Minneapolis, MN.

   MYTH #1: People want cell phone covers that protect their phones from being dropped, not the stylish covers that we can sublimate with colorful designs and personal information. Actually, people tolerate those bulky rubber cases because they have been told that they protect their phones better than stylish cases. The truth is, those bulky rubber hulks may not protect phones nearly as well as people think. Universal Woods, the maker of the recently-introduced ChromaLuxe sublimatable covers, contracted with the University of Louisville Engineering Department to run some tests on the various phone covers currently on the market, including their own. What they found was most unexpected. It seems that some of the covers, both the ChromaLuxe brand and others currently being sold by sublimation distributors, were just as good at protecting phones as the bulky rubber cases and, in some cases, even better. Tests included dropping the phones, banging the face of the phone and evaluating pass-through damage from the back and sides. Interestingly, the equipment necessary to continue this testing is being purchased by Universal Woods to allow much more extensive testing to be done in-house. We can expect to see a comparison sheet from the company that we can show customers after the next round of testing has been completed. Of course, one of the most important reasons for doing this testing in-house is to improve the quality of their own designs.
   MYTH #2: All potential buyers of sublimated cell phone covers want photographs imprinted on them. Many people do want photos of family, vacation spots, landscapes, pets, etc., sublimated on phone covers. But in a survey conducted by Unisub, only about half of the people surveyed wanted photos while the other half preferred monograms, not photographs. In a trade show survey done by another sublimation supplier, Condé Systems, the majority of respondents chose a monogram over a photograph.
   MYTH #3: Even if people do want a photo on their phone covers, they would never have it with them anyway, so “while you wait” sales in malls, at sporting events and in retail businesses won’t work. There was a time when that was certainly true, but not anymore. Virtually everyone who has a smartphone carries their photos with them on their phones! All they need to do is e-mail you the image. Since most of today’s smartphones are capable of taking high resolution photos, there is no problem sublimating them on phone covers. Even if they don’t have their photos on their phone, they will often have them on Facebook, Instagram or on the cloud. Images from all of these locations can be easily downloaded to your computer and sent directly to your sublimation printer.

The SG 3110DN Ricoh sublimation printer is ideal for portable applications. It is light, easy to move and ink does not have to be removed while transporting.

      MYTH #4: Most people prefer 3D phone covers. A 3D phone cover is one that has a design on the cover in addition to the top and sides of the cover. Phone covers designed for traditional sublimation include a frame with a removable flat insert that you sublimate using a regular (flat) heat press and then re-insert into the frame. There are a variety of 3D covers available to consumers today. Some are sublimated (using special 3D sublimation equipment), others are covered in rhinestones and still others are imprinted using other methods. These are the phone covers you typically see being sold at mall kiosks for roughly $20 each. To find out how our sublimated phone covers compared, some people from Universal Woods set up a small booth in a large mall. In exchange for taking a survey, people were given a free sublimated phone cover. The question was, “Would you prefer a 3D phone cover for $20 or a sublimated phone cover with two extra inserts for $29.95?” According to the survey, 72% responded that they would prefer to pay $29.95 for the sublimated phone cover with extra inserts.
      MYTH #5: Most people prefer colored phone covers. That is the reason sublimation suppliers offer frames in a variety of colors, including red, blue, pink, black, white, etc. The truth is, sales demonstrate that black is the preferred color by far. White is the second most popular choice, but it isn’t even close by comparison. So do you have to inventory all the colors in all the different styles available? No, probably not. Most people will be content with black. Of course, having a few colors on hand will probably increase sales to some degree, but black is clearly the public’s first choice.
      MYTH #6: Most people know that they can buy personalized phone covers with photographs, monograms, names, etc., on them. Actually this is surprisingly not true. The surveys done, although limited, indicate that very few people know that personalized phone covers are available.
      MYTH #7: The problem with selling phone covers to your customers is that once they have one, you are unlikely to sell them another, which rules out the possibility of easy repeat sales. OK, I admit it. I have been using the same sublimated phone cover for a couple of years and have no great desire to change it. What I have learned, however, is that I am in the minority. It seems that most people—both men, women and particularly younger people—would prefer to have multiple phone covers or inserts so they can change the image according to their mood, what they are going to be doing that day, what’s happening in their lives, etc. One woman expressed it well when she referred to her sublimated phone cover as a “fashion accessory” and an “extension of her personality.” If you watch young people and how they are constantly linked to their phones, it’s clear to see that phones have become an appendage, and a personal one at that. They are lost without it.

Currently, sublimated phone covers are only being offered for a few phones. They are the iPhone 4, 4s and 5, and the Samsung Galaxy Note II, S III and S 4. Shown here are two iPhone 4s and two Galaxies. Photo courtesy of Unisub, Louisville, KY.

   MYTH #8: The largest potential market for sublimated phone covers is middle aged adults who use smartphones for work, organization and as a status symbol. Although this is definitely a significant market segment, the younger demographic is an even bigger market. Teens have more disposable income than ever before. They love malls and spend considerable time shopping in them and to them, as one analyst phrased it, “everything is disposable.” It would be nothing to see a youth peel off a perfectly good cell phone cover and replace it with a new one on a whim. What we want is for them to purchase more personalized inserts so they can change their phone cover as often as they want. One young business man says he has a “whole stack” of phone cover inserts on his desk and he changes them often.
   MYTH #9: Collecting a variety of artwork, photos and images for phones and finding a monogram font that is suitable (and legal) will be a lot of trouble and take a lot of time, so it probably isn’t worth the effort. WRONG! A lot of this work has already been done for you and much of it is free! The Unisub people have put together a website just for this product and the images are free to download. Condé Systems also saw the potential of this product and have built a website where you can download a mountain of designs for unlimited use. There is a small charge, usually $1 or $2 per file. They have also worked out a deal with a font house so you can download a monogram font and use it legally with sublimation for a one-time charge of only $25. (Many font houses actually forbid the use of their fonts for sublimation, including this one. Condé has, however, made special arrangements concerning this font making it completely legal to use.) These files allow you to have a wide variety of designs at your fingertips for quick design work. To view Unisub’s free downloads, visit www.unisubgraphics.com . For the Condé files, visit www.condedesign.com.

Shown here are two rubber-like flex frames with three easy-to-change inserts. Photo courtesy of Unisub. The JP14 light-duty heat press from Geo Knight & Co., Inc., Brockton, MA, features a swing-away design. This press is well-suited for imprinting small metal pieces like phone cover inserts.

  MYTH #10: People prefer the soft rubber cover frames rather than the hard plastic frames because they think they protect the phone better. Not necessarily true. Actually, when a single-piece rubber frame was offered along with a two-piece hard plastic frame, the number of people who selected one over the other was about equal. I mentioned this because it demonstrates that we should not make assumptions based on what we might prefer. If we do, as illustrated in this case, we might be throwing away 50% of our potential sales.
   Research has demonstrated that one of the best ways to package and sell these cell phone covers is to bundle them in a set that includes the frame plus three inserts for one price. The price used in the survey by Universal Woods was $29.95. People participating in the survey said they would be willing to pay up to $10 more for the set of three inserts over the single 3D version offered by the typical accessories dealer.
   If you have a showroom, dedicate some space to cell phone covers. Include a computer and/or a catalog that you can use to display a variety of cover designs so shoppers can browse through the options. You can also include a computer template that they can import their own photos into. Show lots of samples. It is hoped that we will soon have a source for “dummy” phones to make the sample covers look and feel like they would on an actual phone.

Testing and surveys have revealed that many people prefer a colored background with a monogram over a photograph. Photo courtesy of Condé Systems, Inc.

   Don’t be afraid to sell offsite. One dealer set up a kiosk in a local flea market mall, which typically costs between $10 and $25 per day and includes electricity. They used a small Geo Knight JP-12 heat press, which costs less than $300 and is a lightweight and portable press that doesn’t draw much current, a Ricoh SG 3110DN printer and a laptop. This little “business” had great success with sales upward of 100 units per weekend. Using the numbers I have suggested, that would yield a profit of almost $2,600 per weekend.
   Don’t limit yourself to flea markets. You can set up a personalized cell phone cover business just about anywhere. For example, buddy up with a cell phone retailer in a mall for a two-day event where you offer phone covers “made while you shop.” It doesn’t have to be a cell phone provider, however. Most any retail shop will work. Just set up a table, press, printer and your laptop computer and you’re in business!
   If you have a website, devote a prominent spot on your main page to personalized phone covers and see what happens. I don’t know anyone who has tried that yet, so you might be the first, but I have to believe it will draw attention and potential sales.
   Take your sublimation printer and press to local sporting events, home shows, open houses or anywhere else where there is a steady flow of people and you will be well on your way to tapping into this lucrative market. With the advent of smartphone credit card devices, such as the Square or Intuit GoPayment, you can accept credit cards with your phone quickly and easily. Add a small generator and you can be in business almost anywhere!
   If you are on Facebook, Twitter, Instagram or any of the other social media networks, be sure to use those outlets to talk about and promote your product. Home shows, much like an Amway or Tupperware party, is another option to consider. Invite your neighbors and friends for a couple hours of fun, food and, of course, phone cover orders.
   Don’t forget about fulfillment through other retailers. Unisub is working on a point-of-purchase (POP) display that you can set up in another retail business that will allow them to take orders for you and make a little money for themselves to boot. These concepts should work great in all kinds of stores, including hardware stores, pet stores, phone stores, baby stores, wedding stores, hair salons, school spirit stores, book stores, sporting goods stores, trophy shops, engraving shops, picture framing shops, photography studios, restaurants, military outlets, clothing stores and a host of others.

This shock-resistant case for the iPhones has its own stand. Photo courtesy of Condé Systems, Inc. Frames are available in a wide variety of colors for customers who want to add an extra splash of color. Photo courtesy of Condé Systems, Inc.

   To really get a handle on this potential goldmine of a market, we first need more people to try out what we have learned so far from the surveys and other research. All of the surveys in the world don’t equal one real-life experience. Our strength in this industry is that we share information with each other. When we do that, everyone benefits as a result.
   Second, we need an inexpensive 4-8 page flyer that we can use as a sales aide. When I interviewed the people from Universal Woods, I kept emphasizing the importance of a full-color flyer that shows designs and gives ordering information. These can be used in direct mail, at POP stands and given to people who show interest but don’t place their orders in face-to-face situations.
   A website that we can link to as if it were our own to allow people online to place orders from us would be a great sales tool to have. This is commonly done now in our industry for other products, such as awards. And, by the way, this can later be expanded to include personalized iPod, notebook and Kindle covers.
   It is amazing to me that something as small and simple as a phone cover can stir so much excitement, but it does. Distributors, manufacturers and retailers alike are all scrambling to get just a tiny piece of this huge accessories market. For dealers, this will put us one step closer to becoming the ultimate personalization business.




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