In the February 14 issue I recounted Hitendra Patel’s opinion on PayPoint’s SIM cards. He said he would have to buy in bundles with the minimum being an outlay of £200. He added that he would never be able to sell them all at his Costcutter store in Harold Hill, Essex.
Head of corporate affairs Peter Brooker says Hitendra is out by almost £190. He adds: “It is possible to buy just five SIMs under our scheme, but the cheapest order we do is £11.25 (+ VAT), with no shipping cost. The largest single bundle is a multipack of 70 for the price of 40 at £36.”
He adds that the average order size across the network is 50 SIMs across six different networks, costing less than £40 (+ VAT).
And there is more: “The difference between our deal and the traditional way retailers sold SIMs is that, with the latter, the distributor would give the retailer the SIMs for nothing and the retailer would keep whatever they sold them for (usually 80p-99p). The distributor keeps the activation and top-up fees. With our deal, the retailer makes a smaller margin on the SIM itself, but keeps the activation (first top-up) and second top-up, earning up to £4 per SIM sold plus the margin. That’s why we’re selling so many through our retailers.”