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Cashback is king

Every month, Tech Data processes an average of 75,000 traded-in mobile devices, including smartphones, tablets, smart watches and Macbooks; its tradein volumes increased by 300% last year and by 200% the year before that; and its online trade-in portal now has more than 5,000 registered resellers and more than 500 retail partners across Europe.

Even so, David Nelson, Sales Director of Trade-in Services EMEA at Tech Data, says the distributor and its partners are barely scratching the surface of the opportunities on offer.

“There’s still huge amounts of growth in mobile device trade-in and re-marketing. We have some fantastic customers and have some fantastic opportunities on the table, but we’re not even scratching the surface of the potential opportunity. In the UK, people estimate there’s around £4 billion worth of mobile phones and tablets sitting unused in people’s drawers and under their sofas that could be put back into circulation. Multiply that by the number of countries in EMEA and you’ve got a huge addressable market.”

Tech Data entered this market in 2015 when it acquired Corporate Mobile Recycling, a UK mobile phone, tablet, wearables and Mac trade-in partner, and it has been developing its capabilities ever since.

Today, it provides mobile trade-in services in 18 countries across EMEA, to vendors and to reseller and retail partners.

As an example of the former, Nelson cites the case of a Chinese handset manufacturer’s website for which Tech Data is the sole trade-in partner across EMEA: “If you go onto the website to buy a new device, there’s an option to trade-in your old device for cash-back on a new purchase or a voucher. We sit behind that. There’s no Tech Data branding or Corporate Mobile Recycling branding but we do all the logistics, grading and data wiping.”

In addition to its vendor partnerships, Tech Data has a mobile device trade-in offering for resellers and retailers, covering all mobile and tablet brands, including Apple, Samsung, One Plus, Motorola, Huawei, Oppo, Xiaomi. Realme, Sony, HTC, BQ and Nokia.

Antipolo City, Philippines – June 29, 2020: Photo of old and vintage game consoles, qwerty cellphone, smartphone, feature phone and pda or personal digital assistant inside a drawer.

“We essentially have two offerings: one that’s very much focused towards the B2B channel and one that’s very much focused towards the B2C channel because they have very different sales cycles. As consumers, we are used to entering a store, giving up our old phone, taking out a new one and walking off, whereas in the B2B channel people want their new phone before they give up their old one, because they are so reliant on their phone for business. Sometimes that sales cycle can last one month and sometimes it can last 18 months, depending on how long it takes to get the product back to us.”

To meet partners’ differing needs, Tech Data provides a variety of tools and portals that can be integrated by API into a partner’s own website, inserted into the buying workflow and, if necessary, be customised with its own branding.

These streamline the whole process, covering device valuation, using the valuation calculator and a three-question process for grading devices; the creation of real-time trade-in quotes for customers (with or without margin) based on the type of remuneration requested (voucher or cash-back); order tracking; secure shipping; and guaranteed data erasure.

“The system automatically does everything and once the customer accepts the quote and the device is delivered to us, we give our reseller the agreed value, which they can pass on to the customer as a credit, as cash-back or as a voucher for the customer to spend in-store – a popular option on the B2C side,” explains Nelson.

Tech Data only accepts working devices that it can resell and does not do any repairs or refurbishment.

“We take the product back, we clean it, we data wipe it and we pass the certifications back to our customers to prove that we have followed the right steps. We then grade the device – the majority that come back to us we would class as grade C – and either put it in a box and resell it or we put the product onto a pallet to sell. We have a huge number of different ways to exit stock right across EMEA and sometimes further afield. It really depends on the month, the time of year and the interest in the device from the partners we look to sell on to.”

Nelson points out that both the trade-in and resale parts of Tech Data’s operations are growing rapidly as the price of new devices increases, as people gain confidence in the effectiveness of the data-wiping process, as they understand the environmental benefits of giving devices a second life and as they realise that old devices still have value.

“People are often very surprised at the value of their 3 or 4-year-old devices. Unfortunately, phones are not like a fine wine and the value does depreciate quite quickly once you get to that four-year mark,” he says.

One of Nelson’s priorities for 2022 is to capitalise on these tailwinds by recruiting additional partners and by encouraging existing ones to deepen their engagement with Tech Data – he estimates that more than 40% of partners use its trade-in services regularly, with another 20% using them on a more ad hoc basis.

As part of this process, he plans to work with partners on the development of engaging marketing conversations.

“There are conversations to be had around how trade-in can be used to incentivise new device sales, maybe with people or businesses that didn’t realise they can put the value of an old product against the next purchase, or maybe with education providers that, again, may not realise that they could trade in their devices to get new devices for their staff or students. There’s lots of different opportunities. I only see this space growing.”

https://uk.techdata.com

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TechnologyReseller: 2021