CeX, or the Complete Electronics eXchange, is a multi-award-winning and publicly acclaimed retail business that trades in a focused yet complementary product range of second-hand technology, gadgets, and digital entertainment products.
CeX has developed a set of bespoke computer tools that simplify the process of buying and selling, along with a best-in-class website that enables customers to get up-to-the-minute prices for their goods. These bespoke tools integrate with the other internal systems of the operating model, ensuring that controls are in place to maximise the performance of the business.
Since opening the first store in central London in 1992, CeX has continued to build upon the success of its operating model and has expanded its network of stores from the UK into Spain, Ireland, Poland, the Netherlands, Portugal, Mexico, Italy, India and Australia.
Today CeX operates over 600 stores across these countries, with roughly half of the stores being franchised. A CeX franchise is backed up by over 30 years of experience and development with opportunities for franchise partners to roll out the CeX retail brand in these territories as unit franchisees or area developers as well as master franchise opportunities across the globe.
How does the CeX business model work?
The CeX business model is based on buying and selling from the same source: its customers. To succeed in such a business and overcome stock shortages or surpluses, the franchise constantly looks at product supply and demand curves and adjusts its prices according to its experience and using the sophisticated tools it has developed over the last 30 years.
This enables CeX to limit potential depreciation of the stock and also enables the business to achieve two optimal positions on all of the products:
1. An optimal selling price that is competitive in comparison to buying the same product new – a price at which the product will sell
2. An optimal purchase price – a price at which customers are willing to supply the product.
CeX franchisees will own and manage their own CeX store. The role will encompass a number of day-to-day activities, including running the store, recruiting, managing and motivating the team of staff, building and maintaining relationships with customers, and growing the business overall.
CeX has built comprehensive systems to manage these processes along with training and development tools. CeX support center experts are available to help at every step of the way if assistance is needed with launching a new CeX franchise or expanding and growing an existing location.
CeX encourages its franchisees to develop their business further, with many of its franchisees operating multiple locations and, in some cases, in multiple countries.
What kind of training and support does CeX offer its franchisees?
Pre-assessment: a three-day in-store discovery experience and assessment process.
On successful application, this is then followed up with a four- (unit franchisees) or six-stage (master franchisees) comprehensive training program, which is supported with access to online training tools, manuals and assessments.
- Sales assistant: in-store placement and online training/competency program
- Supervisor: in-store and online training/competency program
- Store management: in-store and online training/competency program
Advanced store management and administration: The candidate spends several days working and training in one of the brand’s logistics centers and head offices. They will spend time with all of the following departments: customer services, e-commerce, customer returns centre, loss prevention, commercial, marketing, IT development and support, and human resources.
Operations management and franchise management: Franchisees will spend several weeks working with an operations manager, visiting stores, conducting reports, and setting development plans for those stores. The candidate will then spend two weeks working with a franchise manager, visiting franchised stores, reviewing performance and setting development plans.
Sub-franchisee management: After the store pilot phase but before the launch of the master franchise agreement, a sub-franchisee management training program is available covering process, management, recording, recruitment, and various other elements of the sub-franchising process. As systems are improved or new products or services are introduced, new training guides are prepared and issued within the systems to ensure that all franchisees and staff are working using the same systems and processes.
Financial information
The initial capital required for a master franchise is US$1.2m, which includes license fees and the setup and stock for three stores. Further capital will be required to open more units in line with the mutually agreed development schedule. A typical unit franchise costs between £150,000 and £250,000 depending on size and layout, with a typical return on investment in two and a half years.
Why is a CeX franchise a good investment?
The second-hand electronics market continues to grow in revenue globally, and in an uncertain world, being in charge of your own supply chain offers rare protection against the vast majority of market forces.
CeX has continuously expanded and built on its offering, frequently introducing new revenue streams. It carries a range of stock that is typically greater than that of primary retailers, including access to products that may have been discontinued through normal retail channels.
And while new items devalue instantly when opened or soiled, second-hand items can be sold again for a similar value. Meaning no-quibble warranties are offered with little effect to overall margins, something that is not typically done in the primary retail space.
CeX makes a proposition to consumers that leaves them with no reason to buy new. The following are key to the CeX marketing strategy:
Better value for money and better for the planet!
These factors are becoming increasingly more important in consumer decision-making.
Exchange what you don’t want for something you do!
While second-hand trading is one of the oldest business models on the planet, it is still a unique selling proposition within most malls and high streets.
CeX buys your stuff the same day for cash at published prices
There is no need for customers to wait for their money as they typically would if they listed the item on a selling website, and there are no arguments or haggling when exchanging goods with CeX.
Is CeX targeting any areas for expansion?
Following the success of its master franchisee in Malaysia, CeX is looking to develop the brand in the ASEAN region while continuing to look at other markets globally.
Terms and conditions
A 10-year agreement with a renewal option, subject to compliance with the development agreement.