Think of all the people that have smartphones now. In the United States, it’s over 294 million! Many of those people use phone cases to protect their phones, and they often want interesting designs. Starting a phone case business could be a great opportunity for you to be your own boss and make some money.
A phone case business sells phones of various designs, sometimes custom designs. Most phone case businesses sell online, but some sell in a retail setting, such as a kiosk in a mall.
According to Statista, the mobile phone accessories market was $28.53 billion in 2018 and is expected to grow to $74.43 billion by 2026. According to Grandview Research, the phone case sector of this market was $21.4 billion in 2018 and is expected to be $35.5 billion in 2025.
Because mobile devices are considered an essential part of daily life, and phone cases are necessary to protect them, the phone case market is not significantly impacted by economic fluctuations. The industry is expected to grow as smartphone use, and phone upgrades continue to grow.
Your target market will be people with smartphones, particularly younger demographics who are interested in custom designs.
Skills, Experience, and Education Useful in Running a Phone Case Business
There are several specific skills that you will need to open a phone case business.
- Online Sales Knowledge and SEO. Since you will probably be selling online, you need to know how online sales channels work and how to get traffic to your site.
- Experience. You will need some practice making phone cases unless you decide to partner with a manufacturer to make your cases.
- Business knowledge and experience. You will need to have at least some basic knowledge of marketing, finance/accounting, and human resources.
- People skills. You’ll need to be able to build rapport with your customers so that you retain them as customers and keep them coming back.
Costs to Start a Phone Case Business
Here are the typical costs you will face when you open a phone case business.
- Setting up a business name and corporation costs approximately $200.
- Website setup $1000 – $2000 for a professional site, potentially more to make it ideal for online selling.
- Phone case making kit $3500. Partnering with a manufacturer will be more expensive and decrease your profit margins, but you will be able to produce a higher volume.
- Initial inventory of materials $1000 – $2000
- Initial marketing such as Facebook ads or search engine optimization for your website $500 -$1000
Steps to Starting a Phone Case Business
Step 1: Write your Business Plan
After coming up with the idea, the next step in starting your custom phone case business should be to write a business plan. The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.
Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you think through all the aspects of the business and then serves as a guide as you begin.
Step 2: Name the Business
Finding the perfect phone case business name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name. Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.
Step 3: Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include a sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
Related: Comparison of Business Entities
Step 4: Select your Location
Many phone case stores will sell their cases through an online store or online marketplaces like Amazon, Etsy, or eBay. Others will rent a kiosk in a mall or other heavily trafficked area.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
While there are no licenses and permits specifically for a cell phone case business, there are some common local, state, and federal registrations a phone case business may need, which include a sales tax permit and an Employer Identification Number.
Step 6: Find Financing
Most cell phone case businesses are able to start without any outside funding, however, if a loan is needed, borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.
Step 8: Get your Marketing Plan in Place
A phone case business will need to set aside a budget to cover marketing costs on a continuous basis. Common marketing techniques for a phone case business include social media marketing on platforms like Facebook, Instagram, and Pinterest or digital advertising. Developing a website can be a significant expense, but it is necessary to have a professionally designed website to sell your cases.
Step 9: Get Insurance
A phone case business needs several types of insurance for full coverage:
General liability insurance can help protect you from third-party claims of bodily injury and property damage.
Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.
Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.
Insurance policies will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.
Step 10: Hiring Employees
You may need employees to help you run your phone case business if you want to grow large scale. Make sure that you select people with appropriate experience.
In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system for your phone case business is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
How Much Can You Potentially Make Owning a Phone Case Business?
Phone cases have high profit margins, particularly custom cases. If you sell custom cases for $60 and you sell 20 per day, you could make $438,000 in revenue per year before expenses.
Things to Consider Before Starting a Phone Case Business
Running a phone case business or any business will have its challenges. You need to be prepared and make sure that you know what you’re getting into.
Marketing and acquiring customers will be your biggest challenge and an ongoing expense. You will face a lot of competition, so your marketing will need to make you stand out, and your prices will need to be competitive. Your biggest challenge will be getting visitors to your website, which takes time, effort, and money.
There are a lot of competitors in the phone case market, so it may be hard to go up against established competitors like Otterbox. However, if you can find a specialty niche that others aren’t as focused on, you may find a loyal audience.
You will need to decide how big you want to grow your business and if partnering with a manufacturing company is right for you. You will be able to grow to a much higher volume of sales if you do, rather than just making them at home with your own machine. Another consideration is whether you will focus on making iPhone or Android cases or both. Each time a new device is released, retooling for the new phone case design will be necessary.
To save on startup costs, you can work with a distributor to print-on-demand, which will allow you to only produce inventory when a customer orders. Buying this way is going to be more expensive per case than ordering bulk, but it may be a great way to start without spending a lot of money.
Talk to other business owners for tips on starting a business and do your homework to determine costs. Research other phone case businesses to see what they offer and what prices they charge.