A new tool for pricing used IT equipment

Making sense of the used electronics market

An electronics recycler has created an IT products database representing 9,000 manufacturers and 11 million equipment models. The products range from consumer to business equipment, such as network storage devices, routers, switches, as well as servers, PCs and office machines.

The database, called the Sage BlueBook, was launched this week in beta and will remain free to use. It will give prices based on condition, including non-working. It is but the latest option available to people and businesses trying to maximize the value of used electronics.

Sage Sustainable Electronics, based in Columbus, Ohio, created the IT equipment database after acquiring WorthMonkey, a five-year-old website that provides pricing on electronics and other items.

Robert Houghton, who co-founded Sage in 2014, was a co-founder, in 1998, of Redemtech, a recycler sold to Arrow Electronics in 2012. In building its BlueBook, Houghton said Sage wanted WorthMonkey not for its search engine, but for its historical data, which will help it forecast equipment value.

Houghton said the system scrapes data from a variety of wholesale and retail sources, including eBay and Amazon Trade-In. The "real magic," however, comes in cleaning the data to get valid model information that can be matched with transaction activity and product condition, he said. "The BlueBook tells you if the offer price is good or not," Houghton said.

Houghton sees a connection between sustainability and old electronics. "The real dream here is to eliminate the throw-away mentality for the used stuff. There is value in most used electronics," he said. Good pricing data, he reasoned, helps keep equipment in circulation.

Sage is a business that refurbishes used equipment, which includes removing data, and then sells it for its clients. Clients get the proceeds of the sale less Sage's commission. The company also offers wholesale pricing for equipment. One of the motivations of the BlueBook is to reach the small and medium-size business (SMB) market, which Houghton said is underserved.

The asset disposition market is targeted at large businesses served by a direct sales forces, Houghton said. Within a year, the BlueBook will also have an e-commerce platform, targeting smaller businesses, with asset retirement services that will enable users to not only research pricing, but to deal directly with Sage for resale.

The BlueBook will provide retail as well as wholesale prices on equipment. The wholesale price is the price at which a reseller is expected to buy the product in order to sell it to a retail customer. Sites that buy equipment directly from a seller are buying at wholesale, which can be 20% to 40% of the retail value.

Houghton hopes the BlueBook ultimately leads to more business, but it may also help consumers keep older equipment in use for a longer period.

People and businesses interested in selling used equipment have a variety of options. There are services such as Gazelle, which buys equipment, and MarkITx, which connects buyers and sellers in a sophisticated exchange.

David Daoud, an analyst at Compliance Standards, said Sage is responding to a vacuum in the electronics secondary market, particularly among SMBs.

"The transparency issue over the cost has always been a sore point for CIOs," Daoud said. There is "very little trust" in the secondary market for used electronics.

One of the problems with electronics is the velocity of price changes. For instance, an asset may have a certain value just up until the time that a new OS is released that changes hardware requirements. What will be difficult is tracking prices over time, Daoud said.

Selling or recycling used electronics is better than doing nothing. The U.S. Environmental Protection Agency has put the percentage of recycled electronics at somewhere between 30% and 40%.

If electronics, such as cell phones, are not recycled, "some get tossed into the trash, but they are more commonly put into a drawer," said Barbara Kyle, national coordinator of the Electronics TakeBack Coalition, whose members include a wide range of environmental groups, in an email.

Electronics that get tossed into a drawer or closet become too old to reuse.

"It's important to act soon after you replace a phone and not wait until it's too old and obsolete," Kyle said. "Give, or sell, the old one to an entity that will refurbish and reuse the phone and get a second and maybe a third life out of the resources that went into making that phone," she said.

Copyright © 2015 IDG Communications, Inc.

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