FreedomPop launches online store for used smartphones

Smartphone millennials
FreedomShop aims to compete with larger online retailers in the used-phone business

FreedomPop launched an online marketplace for refurbished, used smartphones for consumers in the United States, Mexico, Spain and the U.K.

The MVNO said it plans to sell more than 100 smartphone models from brands including Apple, Samsung and LG, offering a 30-day “no questions asked” money-back guarantee and a 90-day warranty against manufacturer defects. FreedomPop said it has forged partnerships with more than 200 refurbished smartphone suppliers worldwide in an effort to compete with mammoth online retailers in the used-phone business.

FreedomShop, as the new business is dubbed, launched this morning with dozens of handsets. “We have spent tens of millions of dollars building this expansive and unique supply chain, putting us in a unique position to undercut the typical resellers found on eBay or Amazon,” CEO Stephen Stokols said in a statement.

FreedomPop uses Sprint’s network in the United States and offers a free plan that includes 500 MB of data, 200 minutes of voice and 500 texts per month. The Los Angeles-based company, which has raised more than $109 million in financing, plans to launch an additional eight markets by the end of next year in Asia, Europe and Latin America.

The move marks another ambitious step for FreedomPop, which last month announced a partnership with Dish Network to offer free mobile services in Mexico. FreedomPop will run the operational aspects and power the service while Dish will provide distribution, customer service and “local expertise.” Dish will also provide an undisclosed amount of capital to get the effort off the ground.

FreedomPop uses a freemium model to entice users, then upsells them into bigger packages or other value-added services such as additional local numbers for users in foreign lands or a “safety mode” that prevents overage charges. It sells handsets as well as SIM cards enabling customers to activate their own phones.

The company clearly aims to elbow its way into a highly fragmented market where countless resellers offer smartphones through large online aggregators. By creating a streamlined and centralized business for used handsets, FreedomPop may be able to create a lucrative new revenue stream as it grows its customer base.