Where there is muck there is money
A local development contractor paid my father-in-law a lot of money to tip one hundred tons of dirt on his land. He is now selling it for twenty pounds per ton to local people for their gardens. “Where there’s muck, there’s money” is an old saying that has been used for decades in the farming fraternity.
The used mobile phone market has the same analogy. If you don’t already know that the recycling of technology is a huge international business, then you should know.
Companies like IBM have been recycling for years. They have a separate department called Global Asset Recovery Services (GARS), which has a turnover of more than USD$3 billion annually by themselves. In the early days, they leased servers and desktops to large corporate clients. When the lease expired, they took back the product. Not knowing what to do with the returns they soon realized that they could refurbish the servers and desktops and release them back into their corporate clients, acquiring a so-called “double bubble.”
Before 2008, there was increasing world-wide awareness about global warming and the effects of carbon dioxide on our ozone layer. The over-production of consumer goods and intensive farming, which we were told would have a severe and far-reaching effect on our climate within the next fifty years, also came to our attention as serious problems. We were informed that unless we changed the way we produced and distributed our consumer goods and food that humans would implode as a species.
Out of this crisis was borne the phrase “sustainability.” A worldwide directive was created to reduce carbon emissions and with this came the creation of Carbon Credits. What transpired next was the beginning of a new era in trade. All vendors, distributors, carriers and retailers have been made responsible for their global footprints, meaning that if they do not reduce their carbon emissions they will be penalized via heavy taxation. Due to this, what we now see within our industry is the promotion of used (graded and refurbished) mobile phones.
Traders, I kid you not, this business is huge. I come from a sim-free trading background of 27 years and this business is larger and more profitable than anything I have ever experienced.
Smartphones are our personal computers in every sense of the word, and offer much more than traditional computers. Historically what we had were mobile phone vendors and PC manufacturers that operated independently of each other, and they are now the same thing. Very soon there will be no need for desktops as our needs will be fulfilled with smartphones and tablets. Some of us are already experiencing this, as our desktops will be replaced by just a screen connected to our handhelds.
For years I have listened to the anxiety of the industry screaming ”it’s over” and “we will never do another deal again!” I’m telling you now that it is only just beginning, with the continuing merger of the mobile communication business with the IT business and the legislation created to combat global warming, what we have in front of us is a huge and dynamic business filled with opportunity and potential, seeding at every conjecture.
“Device buyback,” “forward logistics,” “omni-channel services,” “recycling” and “refurbish- ing” are all words that we are all beginning to hear within our business and they are all relative to trading and ultimately profit.
Worldwide, the smartphone insurance is a large and progressively growing business in this sector. The global mobile Insurance market reached USD$13.3 billion in 2015, and is on track to rise to $17.6 billion by 2019. Insurance companies prefer to purchase graded stock because this reduces their outlay costs.
As competition along with growth increases in the smartphone arena more companies, particularly online retailers, are struggling to be competitive. Retailers are purchasing graded and refurbished product to enable a competitive edge. Consumers are purchasing graded and refurbished product due to the life expectancy of the product, cost, and ongoing demand. The two largest manufacturers in this arena are Apple and Samsung. Due to the initial high purchase value of their products consumers are purchasing refurbished and graded product.
There is a also significant rise in unlatched products as opposed to contractually latched products, a result in the restructure of networks and their revenue streams.
And of course we have the trade (that’s us by the way). There are so many opportunities out there to trade this product, because we all know if we expose a demand for a product then we know it will be traded.
So come on guys, ll your boots, the time is now, we are off again, entering into a new era of trading opportunities in the technology and mobile worlds.
Go and get it guys and girls!
- Keep The Faith
- The Old Hand
- Blog: theoldhand.wordpress.com