Edition 83
Why Reuse and Refurbish Electronics?
by Sarah Cade, Co-Founder, E-Reuse Services

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In the world of Electronics Recycling, looking at material as an asset instead of a commodity can be a challenging, but profitable prospect. For organizations willing to include reuse into their process, the reward is substantial, but it doesn’t come without the need for certain diligence.

The importance of reuse, repair and refurbishing electronics can be broken down into three categories
• Increasing Revenue: as commodity prices decrease more electronic recyclers are looking towards reuse to diversify their operations, create more jobs and to recognize the most value from the equipment they collect.
• Preserving Our Resources: The New York Times published an article suggesting that rare earth metals used in electronic devices face supply risks as well as production limitations1.
• Affordable Access: according to a study done by the White House, even though more than 98% of Americans have access to Internet service, 1 in 4 does not have it at home2. So there are many that can benefit from a low cost and reliable computer.

Current State
Currently refurbishers are measured by the number of Microsoft Refurbishing partners. These are broken down into two categories. Large refurbishers are Microsoft Authorized Refurbishers of which there are about 80 worldwide. Smaller refurbishers are Microsoft Registered Refurbishers of which there are 6,500 worldwide. Other companies may contribute to the market of resale and refurbishment, but only these Microsoft partners are using genuine licenses from Microsoft to fully refurbish units. Microsoft has estimated that over 40 million Refurbished PCs will be sold in 2015 and that 24% of eBay’s sales are refurbished goods. While sale pricing starts under $100 for a refurbished computer it can also span to more than $350 per unit3. This marketplace creates significant savings when compared to new device price points.



The reuse of electronic parts and components is a larger marketplace with less complexity and support. Many organization harvest parts to be sold individually or in bulk to end users, companies or other repair and refurbishing operations. Parts harvesting has been found to significantly increase in revenues when compared to material recovery.

Projected Growth and Opportunity
According to Gartner, 233 million computers and 2.6 billion total electronic devices will be shipped worldwide in 20174. Gartner also estimates an increase in the number of devices over the next 3 years creating a larger pool of products to be repaired, refurbished and resold. Currently, refurbished products comprise only a fraction of what is shipped worldwide. As more and more devices are being released into the marketplace the stable refurbishers stand to gain greatly as these new products hit their doorstep.

Barriers to Entry
Barriers to enter into this marketplace are low. The Microsoft Refurbisher Programs are free to join and provide a low cost license fee per machine. Marketplaces like Amazon, eBay, New Egg and others are open to any vendor who meets basic qualifications. Other marketplaces such as schools, non-profits, small businesses and individuals are also opportunities. Usually the customer buys purely based on specifications of the hardware, price and value added services such as warranty and technical support, but tends to have brand loyalty if they have a good experience.

While barriers to entry may be low, sustainability, optimization and differentiators are key. Being able to obtain quality products to refurbish, putting the systems in place to manage inventory, testing hardware and parts as well as re-loading the operating systems are all key components to making a long-term successful and profitable Refurbisher. The marketplaces listed above are sensitive to consumer complaints. Customer support and back-end logistics are notable components for long-term viability.

Resolution
Invest in reliable resources to help implement effective data destruction methods, efficient inventory management, complete hardware testing and proficient imaging software tools. These will create an effective, robust and sustainable reuse and refurbishing operation that will help preserve our natural resources, provide affordable access to those in need and create more local jobs.

References
1 http://www.nytimes.com/2015/11/20/opinion/the-next-resource-shortage.html?_r=0
2 https://www.whitehouse.gov/share/heres-what-digital-divide-looks-united-states?utm_source=email&utm_medium=email&utm_content=email478-graphic&utm_campaign=connecthome
3 Sean Nicholson, Microsoft, PowerPoint Presentation at the Electronic Reuse Conference 2015 www.ereuseconference.com
4 http://www.gartner.com/newsroom/id/3088221
RLM
Sarah Cade is the Co-Founder of E-Reuse Services, Inc. She spent seven years working for her parents refurbishing company and running the Electronic Reuse Conference. Sarah travels worldwide to speak at conferences and deliver training to promote the reuse and recycling of electronic equipment. She is a member of the Responsible Recycling (R2) Technical Advisory Committee, is the Vice Chair of the Board of Directors for the Recycling Industry Operating Standard (RIOS), and is the Chair of the Young Executives Committee for the Institute of Scrap Recycling Industries (ISRI).

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