How does a1wireless.com make any money?

Factual Questions
1

Hello all,

I’ve never owned a cell phone before, but I am hopefully moving very soon to start a new job in a new city, and I’ll be moving in with a roommate who has a cell phone but no land line in his house. As a result, I’ll need to join the teeming millions of cell phone users too.

A few friends have recommended going through a website called www.a1wireless.com , where you choose your provider, your contract is actually through that provider, and you get your phone for free, shipped to you for free, and you actually get a cash rebate (quite sizeable in some cases!) They also seem to throw in home and car chargers and the little hangy earpiece thing. This seems like an amazing deal, maybe even too good to be true. I’m naturally skeptical about anything like that, but I just can’t figure out how this company benefits from the arrangements, or what’s in it for them.

I told you, three of my friends have gone through a1wireless.com already, and they got their phones FedExed the very next day after ordering, put down no money up front, and so far, so good! It sounds great for what I’ll need (once I decide on a provider and a phone), but I was wondering if anyone had any additional input, or questions I should be asking. Please keep in mind I know nothing about cell phones and contracts, but it seems like they’re offering all the standard contracts too.

2

They make money buy signing up customers for the cell phone companies. They get a certain amount of money from the phone companies. It would not seem outrageous to me that they could get a $100 to $200 per person they sign up. The phones they show don’t look that new so they could be using old stock that would be thrown out if not moved by them. Getting customers to sign up for phone service is expensive. All that advertising, mall kiosk rent etc.
The deals offered don’t seem that much better than the deals offered by the phone companies themselves. Almost all cell phones sold in the US are subsidized by the phone companies. Generally the longer contract you are willing to commit to the more free phone stuff they give you. The quoted retail prices for phones in the US are pretty high compared to countries where phones are not subsidized by the phone companies. So they are not giving you as much money as they make out.