We can’t believe we are already 1/4 through the year! We’ve been wanting to write this post since the end of 2016 however it’s been a busy period for us and the post had to wait.
2016 was a really tough year for us, as it was for most South Africans. This post is an overview of some of the challenges we faced, some of the victories we experienced, and a bit on our plans for 2017 and onwards.
While all of this might bore the Average Joe, we hope it will give a bit of insight into the running of our company to those who are interested. It’s a company run by real people with real issues and a real mission. We’ve found that so many companies in our industry just keep closed off to anything revealing or personal, except for their price list. All the websites look the same, with the same info. A faceless entity that promises the best parts at the lowest price. Nothing sets them apart except location.
This is the beginning of a series of ongoing “behind the scenes” posts that we plan to publish. We’d love to tell the world about our team, our challenges and our victories.
If you’re only interested in one particular category, you can use the links below to jump to those sections:
Since we started Platinum Repairs in 2011 (wow, we can’t believe it was so long ago already!), we’ve tried to import the vast majority of the stock we use, especially iPhone and iPad screens. Local stock of those parts is usually of a very low quality. Obviously the exchange rate makes a big difference to us and we watch it like a hawk, to try time our shipments so that we get a good rate, which protects our margins and allows us to keep our prices down, without having to sacrifice quality.
For the majority of 2015, we enjoyed paying under R13 per USD. In the last quarter the Rand weakened a bit but was mostly still under R14/USD. Then Nenegate happened and it all fell apart. The Rand took a nose dive and our costs went up dramatically. To make things worse (and we’re still not sure why) the price of parts from the factories in China also shot up at the beginning of 2016. In some cases, this cut our margin in half.
The logical solution would be to raise prices to protect a sustainable profit margin however not everyone thinks along this line – 99% of our competitors kept their prices the same and just made far less profit, and hoped they would survive. Because there are so many iPhone repair stores out there, we had to keep our prices in line with the market and try weather the storm. We watched as repair centres around SA retrenched staff, dropped the quality of their parts to save money and dropped prices further in a desperate attempt to increase volumes. Sadly, in a few cases, they shut down or liquidated, leaving staff jobless and customers without warranty cover.
When we started, we differentiated ourselves with our on-site repair service, which our clients love, and pay a fee for, and this helped keep our foothold in the market. We aggressively increased our online advertising spend, and held on tight. We also worked on our relationships with insurance companies, brokers, and other corporates – focusing on maintaining a motivated team, and keeping up the quality of the parts used, to serve our clients as professionally and effectively as possible.
From July 2016, the exchange rate improved and we began to get a little relief. Since then, the rate has been getting better and better and it’s helping us recover from the tough periods. The prices of parts from the factories has also dropped a lot already in 2017 and we’ve been able to pass a lot of these savings on to our valued clients. We’re just hoping that our friend, Mr President, doesn’t do what we think he might do when Gordhan returns from his cancelled investor roadshow. South Africa doesn’t need more of this rubbish – we need some stability.
Platinum Repairs has always been well known for it’s on-site repair service – something that has been copied many times, but never matched. The reason many other businesses tried it, and shut the service down after a few months, is that it is a very complicated style of doing repairs, compared to running a repair centre at a fixed location. You have to buy cars, insure them, maintain them, make a plan if they break, and deal with the realities of city traffic. Technicians can typically only do 5 repairs per day, where they could do 15 in a repair centre.
We bought two automatic Hyundai i10’s in April 2014, and have put some serious mileage on them in three years. They’ve been under guarantee but have had the habit of getting stuck in one gear every now and then. Whenever this happens, our technicians end up stuck on the side of the road, waiting for a tow truck. It’s been a huge frustration – it delays our repairs, with us having to postpone repair appointments and hire cars when loan cars are not available. Thankfully, towards the end of 2016, Hyundai seems to finally find and fix the root cause of the issue, and our cars have been changing gears flawlessly since then.
With our cars being on the road all day means they are constantly exposed to traffic issues – hazards, delays and accidents. Our poor little cars have had their fair share of bumps over their short three year life span – none of them our technician’s fault, but it still means that our vehicle has to go in for days or weeks for repair, and we have to hire cars while we wait. We’ve also replaced more than our fair share of windscreens. Thankfully we have a fantastic insurance company, TuffStuff, who have given us only the best service and helped us get back on the road as soon as possible.
Technicians needed for on-site repairs:
With our on-site phone and tablet repair service, we send technicians out to our clients – to their homes and offices, and occasionally to meet at restaurants. You need a special type of technician for this – you can’t employ just any technician who can fix a phone. You need someone presentable, well-spoken and professional. Typically, repair centres employ the cheapest technicians they can find, and hide them in the back of the workshop where no one can see them or speak to them.
We try do the opposite – we look for team players who have a rare mix of technical and social skills. We employ and train technicians that are able to have a top CEO watch their every move as our technician repairs their phone or tablet right in front of them. These are the type of technician who can have a conversation with our customer’s children, while showing them the inner workings of an iPhone and petting their Persian cat that won’t stop rubbing their leg. (True story!)
We know that whenever you call a repair centre and ask about the quality of the parts, they will tell you it original, or “OEM” – assuring you that it’s a top quality product. The problem is – how would you know if they’re telling the truth or not? Unless you see and experience the fitted replacement part, it’s virtually impossible for you to know what type of part you are getting. We’ve tried to be transparent and offer two types of screens – an original quality screen that will match the original screen 100%, and a high quality option that is cheaper but still good quality. What might be surprising to you is that there can be up to 10 quality options of screens available from our suppliers for one model of iPhone – all at different price points. As an example, the cheapest iPhone 6 screen (very popular in SA) is a screen with a low quality (dim/washed out colours) LCD, a hot glued frame (that will peel off in hot weather) and a cheap glass that doesn’t have an oleophobic (anti-oil/fingerprint) coating that original iPhone screens have. These screens cost half of what a decent screen would cost. We won’t touch those with a barge pole – they do no result in building a loyal client base.
The difficulty we’ve had is that our competitors offer these cheap screens, at a low cost, and promise it’s a top quality part. We’ve had to try get close to their pricing so we remain relevant – even though our part costs are double. We all know you pay what you get for but for the majority of iPhone owners, it’s very hard to justify spending double the amount of money if two companies are telling you the same thing. We’ve stuck to our guns and due to word of mouth about the quality of the parts and service, we’ve been able to build up a fantastic base that have supported us over the years. Yes, we’ve messed up, and yes, we still have occasional issues with parts (a reality with any item produced in a factory – everything has a failure rate) but using quality parts at a lower profit margin has played out in our favour over the years. It’s a constant challenge to offer competitive prices, long warranties and good service, while keeping tabs on what is happening in our industry.
In October 2016 we were awarded second place in the annual OUTsurance Stand OUT awards. After every claim that is handled by an OUTsurance service provider, the insured client is asked to rate the service provider. If there are complaints, they are handled very seriously by OUTsurance. All the responses are collated into monthly reports that let service providers know how they doing in terms of serving clients. We came second both nationally and provincially and we’re so proud of our team. We work in a difficult market where people can’t afford to be without their phones or tablets for long, so we have to provide a fast repair, with the right parts, at the right time, every time. It’s a challenge that our team strive to accomplish every single day. That’s all our business is about in the end. When we don’t get it right, we try learn from our mistakes and improve our processes to make sure it was a once-off occurrence. Our mission for 2017 is to be first both nationally and provincially. So far, we are on track. We’ve done it before and will do it again.
It’s a privilege working with OUTsurance – they have built exceptional technology into their systems that ensure the claims are processed as quickly as possible, and are absolutely sold out on making sure their clients receive the best service.
In February 2014 we moved away from an office in Hyde Park Corner Shopping Centre, into a reputable retail shopping mall in Rivonia. We did it on a tight budget and a lot of blood, sweat and tears went into building our new repair centre and doing the shop fitting for our waiting and welcome areas. It was an exciting move and it represented a major expansion for the business, however it wasn’t all good news:
- Safety: Over the three years we were in the store, we had multiple instances of groups of people watching our store, trying to distract our staff in order to steal and checking if we had CCTV cameras. It seems we were regularly being checked out for a possibly robbery. Various other repair centres in Johannesburg have been robbed, and it’s an absolute disaster – clients and staff are traumatized, and at major personal risk, should it happen while the store is open. There’s also the risk of private information getting into the hands of criminals, huge financial loss, as well as a loss of morale and any feeling of security. Insurers are also now very nervous of giving cover to any businesses that deal in cellphones. We are thankful to report that we never had a single violent incident at the store. The only incident was a phone being snatched from a staff member outside the store. The thought of what could happen always hung over us and it made us look at possibly moving out of retail. Retail isn’t core to our business and we don’t want to take unnecessary risks.
- Cost: Shopfitting, and rent in a retail centre is incredibly expensive. We thought the move from an office into a shopping centre would bring foot traffic that would at least make up the difference in increased expenses. We were wrong. Our rental costs multiplied by 6, and we had to absorb that increase without a big bump in sales. On top of that there’s the cost of parking for our staff and increased maintenance costs due to the nature of being in a retail store.
Thankfully we had negotiated a three year lease with our landlord, down from their standard five year contract. At the end of February 2017 we made the move back into an office, where our costs are lower and there is 24 hour manned security with access control. We feel much safer and our clients and their devices are much safer too. In a volatile economy, with retail businesses under pressure, we believe this is a key move that will allow us to provide better service to our clients, and help us keep our costs and prices lower, which protecting our margins that will ensure the long term survival of the company. We are planning on opening multiple offices around the country.
We’ve been watching the retail sector of our industry closely, and have seen many of the stores close their doors in 2016. 5 years ago it was a different story – there were only a few companies specialising in iPhone and iPad repairs – now every shopping centre seems to have at least two. We feel it’s a dangerous place to be right now and we are taking precautions.
Towards the end of 2016 we had the absolute privilege of being appointed to the repair panels of these two prestigious companies. It such a pleasure to work with companies like these – they really go out of their way to treat their clients and their suppliers fairly.
In October 2016 our Pretoria franchise opened. Up until then, we had services all of our clients from our head office in Rivonia. You can imagine the logistical nightmare – like a technician needing complete an iPad mini repair in Joburg CBD, and then get to northern Pretoria for an urgent iPhone 6s repair. The distance killed our output – two repairs could have been done in the time it takes to get from Joburg to Pretoria in traffic. Our Pretoria franchise has two mobile technicians, based near Menlyn, and can get to clients in a fraction of the time it used to take us. The team there has been doing exceptionally and we are excited to see how the company will grow in that area.
February 2017 saw us sending our longest standing, and most well known technician, Tatenda, to open up a branch for us in Cape Town. He’s well known amongst our clients for his expert knowledge and huge smile. Affectionally known as “Mr T”, we really miss him in Joburg but Cape Town is a key area for us, and we needed to send one of our best. Mr T has been doing on-site repairs there for a month now and is enjoying it greatly. This is great news for our business – in the past, clients had to courier their devices to us, and even under ideal circumstances, they would be without their device for a minimum of two days. Now, we can repair their device in the comfort of their home or office – usually in under and hour! We are looking to add a second mobile technician there within six months. With this expansion, we now have teams in Johannesburg, Pretoria, Cape Town, Port Elizabeth, Klerksdorp and Potchefstroom. Once Cape Town is up and running well, we will be looking at expanding into Durban.
The rest of 2017:
We are excited about the rest of 2017 and still believe it’s going to be a good year for South Africa. We are hoping our country’s leadership maintain stability and that companies can start expanding again, employing the unemployed, and bringing hope to our nation.