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Reverse Logistics for Tech & Electronics Companies

5Jan, 2015
Reverse Logistics for Tech & Electronics Companies

It may surprise you to discover that reverse logistics can actually contain some advantageous revenue opportunities for companies that sell consumer-based-technologies and electronics. In fact, Barry Judge, the CMO of electronics retailer Best Buy, has been quoted as saying that “secondary market electronics sales represent an estimated $15 billion dollar market in the United States.” So if you’re business is currently not taking your reverse logistics seriously, you may well be missing out on a large potential revenue stream.

Here are some things to consider if you’re looking to improve your reverse logistics as a company dealing in tech or electronics:

There’s a Secondary Market for Used Electronics

There is a significantly sized market for many types of used electronics goods—including things you wouldn’t necessarily expect. A great example is mobile phones where, in 2010, there was around an 8% return rate for mobile phones – 96 million units total.

Refurbished mobile phones can go for 35-75% of their original value. A used mobile phone that went for, say, $150 new, could go for as much as $80 used, providing a real source of revenue. So a company that cells phones of any kind can recoup losses from returns by channeling them into a secondary market, where they still earn a profit off of the returned item.

Rare Materials Can Often be Reclaimed and Resold

Electronics manufacturing involves a number of rare materials, such as rare earth metals, which can be quite expensive. That’s why if your business sells electronics of any sort, you have the opportunity to reclaim the rare materials from your used products.. Materials like gold, silver, palladium, and copper can be recovered from cell phones, computers, and many other common household items. Once recovered, these items can be worth a lot of money.

You Can Avoid Costly Fines

Perhaps the most compelling reason of all for electronics manufacturers and retailers to implement a strong reverse logistics program is the amount of money they can save. In many countries, legislation has been increasing over time, with new laws and regulations to limit environmental damage from improper disposal of electronic goods. Believe it or not, there’s a very real chance that if your products are found in a landfill, you could face a very large fine.

You’re Doing the Customer a Favor

One great way iteration of an electronics based reverse logistics program is to offer to take care of the disposal of their old item when the order the newer version. For example, if your customer is ordering a new computer because their old clunker doesn’t work, you could pay for the shipping for them to send it into you, or you could arrange for it to be picked up during delivery. This is a huge convenience for customers, and it’s also great for you because as mentioned above, there’s that large secondary market.

To Sum It Up…

For electronics companies, reverse logistics is a double-edged sword that contains both opportunities for increased revenue, and the possibility of lost capital from fines for violating local regulations. A balanced, well-managed, and well-designed reverse logistics program can help your company reap the benefits of the markets for used electronics and used materials and parts, while avoiding the pitfalls of regulations on how these things can be disposed of. As a result of this, implementing a strong program is certainly in your best interest.

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