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Why it’s time to incentivise sales of Circular IT

Ashley Ross, Sales Manager at Flex IT UK, a specialist distributor of circular IT, urges vendors and channel partners to act quickly

The topic of sustainability has been gaining significant traction of late and, with it, the idea of a circular economy. As people reflect more on how they
want to behave and how they expect other companies to operate, demand for circular IT is increasing. This, combined with Government net zero and e-waste reduction targets, is adding real impetus to the market for circular IT.

However, there are still barriers that buyers and suppliers need to overcome in order to capitalise on this demand.

For example, while procurement departments are starting to include a certain level of circularity in Request For Proposal (RFP) documents, the specifics of products are often lacking. It’s simply not realistic to have an RFP for a brand- new Mercedes fleet, say, and to put in a footnote that 20% of the vehicles must be used. If you have a procurement for brand new devices with a high-tech specification, you cannot expect 20% of that to be available on the refurbished market. Circular IT is intended for different segments. Before an RFP is made, it’s crucial to determine what departments can run on circular IT.

Then, on the supply side, it’s time for the channel and vendors to start incentivising the sale of circular IT to make it more appealing for sales representatives actively to sell it. Currently, it is not viable on a personal level for a sales person to focus on selling circular hardware, due to targets being set for selling new.

circular computing

We understand that the channel and vendors are careful about committing to refurbished IT, because selling new products is still the main driver for revenue and profit. However, they need to find a way to embed circular IT into their business models, for example by providing circular discounts/ credits to customers or a guaranteed buy-back value to keep the circular cycle in motion. Customers are clearly moving in this direction and suppliers may find the train has left the station if they don’t act now.

The example I always bring up is Kodak, the inventor of the digital camera. They had all the patents sewn up, yet the board was reluctant to make use of them – ‘If we bring this to market, it will destroy our film business, where we earn all our money’. They locked their invention in a safe and didn’t do anything with it, and we all know what happened next.

If you don’t have a vision for where the market is going, you may be protecting your business today, but at the risk of leaving it massively exposed in the future.

Circular IT is already relevant, mainly due to its attractive price. However, the shift to buying it for sustainability reasons is accelerating. By building sustainable solutions today and telling the story behind them, Flex IT intends to be at the forefront of circular IT for vendors and the IT channel.

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