Why mobiles.co.uk offer cheap deals?

[Nokinoki]

I'm thinking about buying Samsung galaxy s9 by mobiles.co.uk. The question is can they be trusted?

The thing is that they offer Samsung Galaxy S9 64GB Black with Vodaphone for only £30 which includes unlimited text, min and 16 GB DATA. (+£125 upfront cost)

It sounds awkward to me since buying only s9 with instalments is about £25/30. Also, I wasn't able to find this, as well as some other deals on Vodaphone website.

Phone: https://www.mobiles.co.uk/samsung-galaxy-s9

Any idea why they are so cheap?

 

[chrcoluk]

they pass on "some" of the referral payments they get.

Its a bit like how you save on uswitch, and cashback sites.

Phones that come with sims you can expect to be locked. the telco is taking a punt you will topup regurly and pays off the subsidy of the phone. For contract phones its just the referral payment been shared.

 

[McPhee]

Mobiles.co.uk are owned by Dixons Carphone and have been about since the 90s. No worries with using them.

They're usually pretty keenly priced.

 

[Slyman]

I have used them for years for the whole family and never had an issue, cash back is always paid and simple to claim.

 

[Nokinoki]

Wow, thanks for replay guys!

Ok so, I still don't understand how does it work I mean networks such as o2 or Vodafone are losing money because their monthly payments are bearly covering phone price, not even including a huge data pack which often are extremely expensive. Below there is a link to Vodafone which offer the same deal but for £55 a month and £49 upfront. So why would they offer a similar deal but for less? Gowing back to my s9 example. Does mobiles.co.uk act as a "Middleman" and at the end I will assign a contract with, e.g. Vodafone and in case of any problems Vodafone will be able to help me?

Vodafone: https://www.vodafone.co.uk/brands/samsung/galaxy-s9/#Midnight_Black/64

 

[chrcoluk]

Basically these companies have a "marketing budget"

Traditionally it was just used for adverts.

Now it can be used for "customer acquisition".

This includes subsidised deals in the name of getting a new customer.

A new customer contract sometimes is a temporary deal, the expectation is you renew at "full price" come renew time. Even if its not temporary it will still be profitable for them.

You will very likely be a fully fledged Vodafone customer as well, mobiles.co.uk is just like a sales guy knocking on your door, handles the initial transaction and then is done.

 

[Nokinoki]

So based on the link below, would you take that phone? S9 unlimited SMS + min + 16GB data. Also, I have a noob question but does unlimited text messages and minutes are applied to all networks. I'm asking because when you click on more info on phones with Vodafone network, under charges outside of your allowance tab, they say SMS Anytime any network: 35p per message.

https://www.mobiles.co.uk/samsung-galaxy-s9

 

[cheesyboy]

Yeah, I've used them for about 5 phones over the last 6 years, between me and Mrs Cheesyboy.

They don't seem to do cashback deals any more, but that process was usually quite smooth - had one occasion where I had to chase it up, but otherwise fine.

Worth buying through Quidco too - I got £35 on my last phone, which came through smoothly (initially tracked at a lower rate, but corrected itself).

 

[krooton]

I worked for CPW a few years ago, the bulk of their pricing was due to purchasing power.

They would buy unlocked grey stock in bulk for good deals, then essentially sell sim-only contracts + that stock, subsidising the phone price with the commission they make from the sim-only contract sale.

 

[chrcoluk]

I just noticed the OP only has 3 posts all in this thread, I am bit wary he is just spamming for the site in question guys, his post with the link sort of seemed wrong the way it was worded which made me check his post count.

 

[Funky-Melon]

I'm not sure how their pricing works either.

I got a Note 8 on release day from them. 3GB of data, loads of minutes/texts etc and for £200 up front and £27 per month.....

Over a 2 year contract that's 27 x 24 months + £200 = £848.....The phone SIM FREE from Samsung and CPW at time of release was £869. So how am I getting the phone + tariff for 2 years for less money than the phone outright?

I sold my S6 Edge Plus at the time for £260 so ended up getting the Note with no upfront cost and less per month than the S6 was from CPW.

 

[krooton]

I'm not sure how their pricing works either.

I got a Note 8 on release day from them. 3GB of data, loads of minutes/texts etc and for £200 up front and £27 per month.....

Over a 2 year contract that's 27 x 24 months + £200 = £848.....The phone SIM FREE from Samsung and CPW at time of release was £869. So how am I getting the phone + tariff for 2 years for less money than the phone outright?

I sold my S6 Edge Plus at the time for £260 so ended up getting the Note with no upfront cost and less per month than the S6 was from CPW.

The sim-free handset has a fair bit of a markup, Note8 costs around £270 to make. They could buy in bulk at say £350 (giving Samsung a 30% profit).
So £200 upfront, means the phone cost is £150.
You contract is costs £648, of which Mobiles gets commission on. As long as the commission is above £150, Mobiles makes a profit.
The overall profit is probably not massive, so they leverage volumes, helped by their lower prices.

 

[chrcoluk]

krooton has it

The business model works like this.

The contract price itself is profitable. But to make it seem attractive to the consumer, the contract free handsets are heavily marked up to make the contract deal attractive. As a bonus any contract free sales generate massive profit per transaction.

One can argue the smart phone industry has been getting away with this for several years on what we have only started seeing on GPU prices, heavy price gouging.

It also goes some way in explaining how these new china phones achieve the prices they do, its simply because their markup is "lower".