T-Mobile angers dealers by making drastic changes to compensation
When you walk into a T-Mobile store, you might find yourself inside a corporate-owned retail location or you might have walked into an independently-owned authorized T-Mobile retail store. The stores owned by T-Mobile are obviously under the control of the corporation while the stores owned by authorized retailers have their own policies and could feature a different selection of phones. The largest T-Mobile authorized retailer is a company called Wireless Vision which owns over 500 T-Mobile stores that serve more than 14 million customers and sell over 2 million devices each year.
According to the National Wireless Independent Dealer Association (NWIDA), T-Mobile dealers are upset at the parent company for implementing changes in their compensation. A tweet from a T-Mobile dealer with the username @jahblessdai sarcastically titled Congratulations on Reinventing Payment Terms! says that first-month dealer compensation had dropped from 100% to 60% and will now decline even more to 25%.
T-Mobile authorized retail location owned by Wireless Vision
The dealer explained that this decline is not fair to owners of independent T-Mobile locations because their expenses (such as rent, payrolls, and other operating expenses) must be paid on time and in full. As the dealer wrote, "Quirky, right? I tried explaining to my landlord and the utility companies about our innovative slow-release payment plan, suggesting we spread this month’s due over the next year. Oddly, they seemed uninterested in being avant-garde financial pioneers."
Making matters worse, these dealers will now get compensated using a 12-month retention plan. This led the same dealer to write in his tweet, "Nothing says 'We value you' quite like holding back what one has earned, essentially giving a whole new meaning to 'deferred gratification'. It’s a bold move, turning payroll into a long-term savings plan we never asked for. Who needs cash flow when you can have a financial trickle, right?" The tweet was signed, "A very concern[ed] Authorized Retailer.
The optics of this battle do not look good for T-Mobile executives all the way up to CEO Mike Sievert. Of course, we are hearing just one side of the story but it makes T-Mobile appear the same as how it used to portray its competitors in the Legere days: corporate, money-hungry, and unfair.
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