CeX or the Complete Electronics eXchange is a multi-award-winning and publicly acclaimed retail franchise 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 simplifies 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 are integrated with other internal systems of the operating model, ensuring that controls are in place to maximize 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 U.K. 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 as unit franchisees, area developers, and master franchisees.
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. CeX also uses sophisticated tools 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:
- An optimal selling price that is competitive in comparison to buying the same product new – the price at which the product will sell
- An optimal purchase price – the 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 the 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, multiple countries.
What kind of franchisee is CeX looking for?
The master franchisee and their team will have a desire to grow the brand via multiple outlets and the financial means to do so. They may have an existing business infrastructure that could support the development, or they will have the experience and ability to create this.
In addition, potential master franchisees must demonstrate a track record in the management of medium to large national retail businesses. If the master wishes to sub-franchise, they must have prior experience in the franchising sector.
They will need to have good local knowledge, relationships and expertise in the areas of real estate, government and labor regulations. Marketing, sales and recruitment experience, knowledge of CeX key product lines and a willingness to complete the in-store training in the U.K., Europe or Australia are essential.
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 a 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 center, loss prevention, commercial, marketing, I.T. 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, new products or services are introduced. This means 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. CeX offers a wide range of training to ensure that franchise owners and their staff are equipped with the tools for success in this part of the retail sector.
The master franchise support package
A comprehensive support package has been developed to get franchisees into business and to support the long-term growth strategy:
- Master franchise license: Territory sole rights, right to use the CeX trademarks, right to use the CeX know-how, operating methods and systems as well as the right to sub-license the same within the granted territory
- Business manuals: Electronic franchisee owner’s manual, electronic master franchisor’s manual, operations manuals, along with various online tools
- Training and opening support: Pre and post-opening store support program, store location guidance, online training for internal systems and store operations
- I.T. solution: CeX website development and presence, procurement and setup of I.T. equipment, email addresses and intranet access, business form templates and access to the CeX dedicated I.T. support department for trouble-shooting
- Store equipment advice: The global procurement and logistics team will provide support and advice on in-store and testing equipment
- Design and build support: Turnkey solution managing the design and build elements, including compliance and project management of each store
- Marketing support: The CeX dedicated marketing department is available for advice on marketing and for the production of bespoke marketing materials
- Commercial support: The CeX dedicated commercial department will review performance, manage stock turns, stock placement and add new product lines.
How in demand is CeX’s services?
The second-hand electronics market has continued to grow in revenue globally since its inception, this is mainly due to new products and services being constantly developed and released by the manufacturers. This has allowed second-hand retailers like CeX to expand and build on its offering, frequently introducing new revenue streams.
The range of stock is typically greater than that of primary retailers, including access to products that may have been discontinued through normal retail channels. 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 on overall margins something, something not typically seen 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!
This is one of many factors that is becoming increasingly more important in consumer decision-making.
Exchange what you don’t want, for something you do!
While secondhand 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 the goods with CeX.
Is CeX targeting any areas for expansion?
- CeX is currently actively seeking development partners for Western Australia, South Africa, Japan, The Philippines, Malaysia and New Zealand
- CeX is currently seeking area developers and single-unit franchisees for Portugal
- CeX is currently seeking unit franchisees for the U.K., Ireland and Spain.
Hear from CeX franchisees
“I was looking for a franchise to bring to Mexico that had real potential for growth. When I came across CeX, I knew that this was the business with the potential I was looking for. Like most of us, I have grown up in an environment filled with technology, and today technology is expanding into our lives faster than ever.”
– José Adame, master franchisee (owns 30 stores in Mexico since 2014)
“After spending time analyzing the business model and meeting with members of the CeX family, I was convinced that this was the business for me. The training and time spent in the businesses in the U.K. and Spain gave me further insight and made all the difference to the success of our business. CeX has provided the structure, and support required for us to reach our goals. In the last two years, we have seen substantial growth in our businesses and profitability.”
– Juan Casanova, master franchisee (owns 30 stores in Mexico since 2014)
“I was first introduced to franchising while working as a store manager and later an area manager in a fast-food franchise chain. When I started researching for my own franchise, I felt it important to consider the franchisor’s market experience and that they had a well-established brand. CeX had everything I was looking for and the returns meant I was quickly able to grow with the business.
– Gabriel Moreno, area developer (owns 24 stores in the U.K since 2011)
Terms and conditions
A 10-year agreement with a renewal option, subject to compliance with the franchise agreement and where applicable to the development agreement.
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.