Employees of Wireless Advocates, a business that had been around for about 18 years, were blindsided this week when the company announced that all employees were being laid off and the company was shutting down operations.

Wireless Advocates sold phones and services for AT&T, T-Mobile and Verizon via kiosks inside Costco stores. Without any advance notice, more than 1,800 people were told on Monday that they were losing their jobs, the National Wireless Independent Dealers Association (NWIDA) reported earlier this week. 

Wireless Advocates was founded in 2004, selling wireless products and services online and in nearly 700 retail locations.

According to an audio recording obtained by the T-Mo Report, the CEO, Dan Brettler, told employees of the move early on Monday. Brettler is also CEO of Car Toys, an audio and mobile electronics retailer with stores in Washington, Oregon, Colorado and Texas.

In explaining the sudden closure, Brettler said they were up against supply chain challenges that started with Covid and never got better. In addition, 5G didn’t spur the demand that they had hoped.

Wireless Advocates also recently decided to no longer pursue business with military bases. Business there was down close to 50% and it never recovered since the start of the pandemic, he said, adding that the men and women on military bases are there to protect and not buy cell phones and TVs.  

It was Wireless Advocates’ decision to leave the military bases, he said. In contrast, Costco informed them that it did not intend to go forward with Wireless Advocates after their contract expires. That left them with no choice but to shut down, according to the audio recording. Prior attempts at diversification, including in Staples stores and a test with Walmart, did not pan out.

Important sales channel

Until this week, Costco stores that Wave Research visited as part of its store checks were taking a “tripod” approach, selling and activating AT&T, T-Mobile and Verizon postpaid services in one location within the store, said Jeff Moore, principal at Wave7 Research. Prepaid was not in the mix.

“It’s a bad time to shut down because of the holiday season,” he said, adding that the chaos will provide a bit of an opening for other stores. “This traffic has to go somewhere, and it’s going to go to carrier stores, Walmart and to Best Buy.”

It’s possible that Costco is already testing out what’s next, including working directly with the carriers. Moore said he was informed of a pilot project in Florida where T-Mobile is selling at Costco. He posted a photo on Twitter of a kiosk spotted by the San Diego firm Gap Intelligence.

“It’s clear to me that they have not given up on wireless as a category,” he said. “It’s an end but it’s also a beginning for wireless sales at Costco.”